An IT program manager approached a Kaiser Permanente executive after a meeting and suggested a solution to an important business issue. That low-key, off-line conversation led to the chartering of a strategic initiative that provided millions of dollars of cost and other business benefits. (Read more here.)
It is common to hear that a strategic decision was made in a hallway conversation or on a golf course. Every strategist who has been “in the trenches” knows that the values and fears of the people in the culture are powerful moderating forces.
Thus, every good strategist understands this simple premise: strategy is a series of conversations about important business issues culminating in the commitment to act.
Why Conversations are Relevant: A Micro-Definition of Strategy
Strategies often fail because people are not convinced of the need for change, and/or they don’t take action. Thus, one practical definition of strategy is,
Strategy is a set of actions based on a set of beliefs.
This definition fits nicely with more conventional textbook ideas of strategy. Examine this logic: strategy is discussed in conversations; conversations are sense making devices; stories help people make sense; collectively, individual stories become larger narratives; organizational narratives are (in part) explanations of the organization adds value and intends to gain competitive distinction. Hint: start with the espoused high-level strategy and you have a conceptual tool for transforming vision into action!
Talking is a form of action; indeed, it is what managers do most. Effective managers use conversations as a tool for gaining agreement on problems and solutions and to making commitments to each other.
Personal Beliefs and Strategy
Strategy implementation depends upon its socialization by stakeholders.
When individuals meet to discuss strategy, they naturally bring their own mental models about the organizational situation, vision, and proposed actions. Joe may think the situation dire, and Jake may think Joe is over reacting. Susan may think there are tremendous organic growth opportunities, and Sunil may think that an acquisition is the only viable strategy. Gary wants to budget more money for new product development, but Anna wants to invest in improved workforce engagement. Each has facts and logic to support their point of view.
What is Good Strategy? A Conversational Perspective
If strategy is a set of actions based on a set of belief, next, consider this proposition: A good strategy is the right actions on the right things. The notion of something (more specifically, a belief) being right or wrong encourages us to recognize that each person carries a set of beliefs about right and wrong, and this ethical framework guides their actions.
Executives and other stakeholders have opinions as to whether the situational assessment (e.g., SWOT) is correct, whether the vision is right for the situation, and whether the proposed actions are appropriate or optimal. The conversation about strategy can now be extended to include questions like these:
- Is our strategy focusing on the right things?
- Will these proposed actions help us close our most-important performance gaps?
Making The Strategic Conversation Work
Not everyone cares about every issue; some people are passionate and some are apathetic. Not everyone has the same information about the issue. Finally, each person brings a difference set of experiences and training to the situation. Strategy implementation depends upon its socialization by stakeholders.
The good news is that executives can reach consensus. How do they do that?
They hold one-on-one conversations with each other,
where they can probe, test, and argue ideas.
Constructive Dissent Improves Strategy
Leaders can assure a more complete analysis of strategy – and reveal threats – by fostering dissenting points of view. Here are three example questions to consider:
- This is what I believe. What do you believe?
- I don’t believe this trend. What do you think?
- What contrary beliefs would upset our business model?
Strategists should keep in mind the advice of the 5th Century BC historian Herodutus, “Unless a variety of opinions are laid before us, we have not opportunity of selection, but are bound of necessity to adopt the particular view which may have been brought forward.”
Do you agree that conversation is an essential element of strategy? Doesn’t it stand to reason that conversation is a skill, and that quality of conversation may determine the quality of strategy?
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Greg: I certainly agree that strategy (defined as an actionable plan reaching for a differentiated future) is obtainable conversationally, and any strategy is going to be influenced by beliefs (conditions, principles, or events accepted without proof), but strategy as ‘actions based on beliefs’ I would put in the category of tactical vs strategic and more in the ‘system 1’ category according to Daniel Kahneman.
Thanks for your comments John.
There are many different schools of thought on strategy (According to the scholar, Henry Mintzberg, there are 10). I suspect that we are operating out of different schools. I am of the school of thought that strategy involves both intent and action upon the intent. While you are entitled to your definition, it is not one that I would use.
So, I ask you to grant me that we may both have legitimate views of strategy but are working out of different paradigms.
While Generals may create something called strategy; there are limits of understanding and effectiveness to say that everything else is merely tactics and execution. I grant you that many smart people use the word tactics because it is consistent with their school of thought. It is just that I avoid it. I think the word tactics is meaningless.
So, I think when you are using the word tactic you means something that is less grand than something that is strategic. If that is what you are saying, then yes I am at that petite level; however, it is still strategic in the sense that vital outcomes depend upon the actions of individuals. The evidence would be in the thousands of decisions made in non-formal settings that influence the direction of the enterprise.
One of the more interesting concepts in the article (IMO) is that I call my definition a “micro-definition.” I will save for a future article the discussion of the strategic narrative (strategy as a story) for a future article (however, note there are about a half-dozen articles on the blog about story telling). Strategy is a narrative might be termed a meso-definition and it is the collection of narrative that might inform the total enterprise approach to strategic management (a macro definition).
Kahneman’s system 1, as I understand it, says that people make fast and intuitive decisions. No argument from me on that declaration. They implication is that these decisions (and the thinking) that produce them, are not as good of quality as the more enlightened system 2 style. There have been a lot of times in my life, and in my observations of strategists, that they have put tremendous care into their rhetoric and conversations. Sometimes these conversations are intellectual shortcuts, but not always.
My intention is to be practical: I think that understanding “action based on your beliefs” opens the door to some powerful leadership insights. Stay tuned and I’ll explain so useful leadership insights in a future article.
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