This article is the fourth installment in “how to improve your story telling chops.” The leader’s goal is communicating the strategic initiative as a story, not as a sterile collection of projects.
Lessons from All the President’s Men
The now-famous phrase “follow the money” entered the vernacular in a scene in the 1976 movie, “All The President’s Men,” which chronicled the connection of a burglary – and its coverup – to the resignation US President Richard Nixon. The protagonists of this story are two Washington Post Newspaper reporters, Bob Woodward and Carl Bernstein. Starting with a burglary at Democratic Headquarters at the Watergate hotel, the reporters find evidence of possible involvement by White House staff in either the crime itself or a conspiracy to cover up the crime.
Woodward and Bernstein would need clear proof before they could publish their story. In one pivotal scene, Woodward is meeting with a mysterious source, code-named Deep Throat, who helps them separate the important from the trivial. Here is dialogue and a scene from the movie…
“Follow the money” was a sense-making rule that helped to identify a strategic pattern. With it, Woodward and Bernstein could better understand the movement of money and link the White House’s to the covering up of the Watergate break-in. (This practice now has a fancy name: “forensic accounting.”) As we know, President Nixon resigned in the face of likely impeachment.
In strategy, we often encounter substantial detail (a.k.a, noise). It was a signal that helped reporters cut through the noise of less-important details.
Money Talks: Why the Follow-the-Money Story is Relevant to Strategic Initiatives
The always-important accounting concept of “cash flow” is another way to say, “follow the money.” For-profit organizations raise money from external sources such as debt and equity offerings and internal sources such as sales and investments. Not-for-profit organizations gain funds from debt, gifts, grants, and endowments. Government organizations secure funds from debt, taxes and pass throughs. In each of these types, there are frequently extensive contractual term and conditions that apply to the funding.
Some program managers think that finance and accounting is irrelevant and boring, but it is all part of the strategic initiative back story. They can improve their odds of success if they are…..
Prepared with Answers to these Questions
The follow-the-money principle suggests these questions:
- Where did the funding for your strategic initiative come from?
Stated more specifically, do you know which executive(s) provided funding, and in what proportion? Do you know the reasons and promises?
- How will your investors measure the strategic initiative’s performance?
Imagine a future conversation with an investor who is asking you, “Did I get my money’s worth?” You are thinking strategically when you think about the definition and measurement of success.
- Are there strings attached?
There are often legal and contractual expectations.
An Example: Funding Strategy for the Common Good
In a recent experience, the CIO was providing all of the funding for a major software deployment. The program manager recognized that the software would alter basic processes and policy, and launched a low-key campaign to educate executives. Here, the Program Manager was functioning as an internal entrepreneur.
Because the entire business would benefit from this investment, other executives had to step up with funding to support costs of the program.
The resulting fund is termed “Stratex” (for strategic expenditures, and distinguished from capital expenditures and operating expenditures). The term helps executives distinguish operational expenses (“run the business”) from strategic expenses (“change the business”) to assure that the organization is investing for the future. Stratex becomes the funding for strategic initiatives.
As the story continued, the company decided to designated the program as a strategic initiative and expanded the scope so that there was full consideration of the changes to process, policy and people.
Importantly, each of the business units that fund StratEx are now considered as investors. They want a return on their investment. It is the program manager’s job to deliver the benefits to those “investors.”
Do you agree that it is useful to know the “follow the money” story?
- Advice for Strategic Initiative Charters (leadingstrategicinitiatives.wordpress.com)