Does your organization have a plan or a strategy? Does the plan apply to the strategy you developed? Does it even matter? Leaders conflate these terms and important organizational leadership tools to the detriment of their teams. Corporate graveyards are littered with organizations that lacked strategic vision - names like Blockbuster, Circuit City, and Bombay Company, just to name a few. For the last 15 years of my military career, I studied, learned, and delved into the differences between tactical planning, operational planning, and strategy. Leaders, planners, and practitioners often misuse the terms, adding to the confusion for everyone involved. Most leaders want to believe that they provide a vision for a strategy within their organizations. They rightly understand that a strategy could enable a lasting impact on their people and organizations that could extend far beyond their tenures. Yet strategy remains elusive for many and nearly impossible for some. Why is it so difficult to implement if leaders recognize that building and communicating a strategy is important? The answer lies in commitment, patience, consistency, discipline, and effective communication. Leaders and their organizations often fail to effectively apply some or all of these elements.
In today’s globally-connected economy, intertwined with politics and information, business is fast-paced. Decisions and actions halfway around the world translate into actions and reactions for organizations that affect their ability to execute their plans, but should it affect their strategy? For example, large defense contractors anticipated international sales to US Middle East partners in 2022. Yet, President Biden’s trip to Saudi Arabia and expressed concern over some Saudi royal leaders’ behavior caused the Biden Administration to halt these large, revenue-producing sales. For these defense companies, their entire annual plan changed as the result of an acute policy change. Leaders may develop their strategy to achieve a certain outcome, but external and internal forces can derail it. The uncertain and dynamic environment leads executives to develop what they might call a short-term strategy. Such discussion should give leaders pause, as any short-term strategy is likely not a strategy at all but a campaign plan, generally desynchronized and not oriented on the long-term health of the organization.
Commitment and patience. A plan is a short-term construct to move from point A to point B. It can last hours, days, months, or even a year, but it generally does not last longer. A plan allows leaders to implement actions and change course when necessary to accomplish their objectives. For leaders to make changes to a plan, they must appropriately develop well-constructed decision points triggered by conditions or milestones that cause them to stay the course or pivot in a new direction.
In contrast, a strategy generally lasts multiple years or decades. In his book, Good to Great, Jim Collins described a multi-year process for his identified companies to build up and transform from good to great. This buildup required commitment and patience on the part of leaders, often despite naysayers and detractors.
There are multiple definitions of strategy, but the Cambridge Dictionary defines a business strategy as: “the way in which a business, government, or other organization carefully plans its actions over a period of time to improve its position and achieve what it wants.”[1] As described in Good to Great, Jim Collins asserts that companies undergoing great transformations elevate critical leaders to the CEO and President positions.[2] These senior leaders tend to develop strategies unconsciously. In almost all of his cases, he asked these leaders how they developed their strategy and what comprised it. Almost all of the senior leaders could not identify a strategy they developed. Rather, they communicated a simple vision and ruthlessly remained committed to that vision with discipline. Jim Collins pointed out that these leaders assumed significant risk, but that they felt the risk was calculated. Leaders staked their reputations, careers, and companies’ futures on these risks. These leaders’ unconscious strategies required time (at least four years) to see a transformational change to make their organizations great. Therein lies the rub. Do you and your leaders have the fortitude, courage, and commitment to see a strategy culminate over time, applying ruthless discipline in maintaining the course? For a large majority of companies and organizations, the answer is negative.
For large, publicly traded companies, this tendency to stick to a plan rather than a strategy is strong. Senior executives must answer to the immediate interests of their primary shareholders and investors. They expect equity appreciation, growth, and profit, which makes it difficult to adhere to a strategy when acute financial periods are challenging. This is not to say that executives should avoid adjusting a strategy when conditions change. However, completely altering the vision and anticipated outcome multiple times over several years creates incredible ambiguity and turmoil for internal and external stakeholders that can decrease an organization’s credibility. This reduced credibility can lead to high turnover, decreased motivation, increased frustration, a breakdown in teamwork, and jeopardizing the outcome the leadership team originally sought.
Communicating why the organization develops a strategy remains equally, if not more, important. The purpose of creating a strategy should drive toward and support the organization’s vision. While leaders may communicate a new or transformative strategy, they must explain why it produces the outcome to achieve its vision. Leaders must continuously communicate the purpose and strategy, especially with personnel turnover, so that the entire team understands and can implement it.
Military strategies provide some of the best historical examples. In prosecuting World War II, the allies developed a strategy of “Europe First,” where they would prevail on the European continent and defeat Nazi Germany before moving with full effort into the Pacific theater to defeat Japan. Allied military and civilian leaders communicated this strategy consistently and focused all of their energy on execution. Many powerful personalities and changing conditions threatened a change to this strategy, but the key decision-makers adhered to and drove it, culminating in success. During execution, the Allies adjusted when they experienced failure or changing conditions but did not change the stated approach.
Leaders are faced with changing conditions, challenges, and decisions every day, but they should spend time developing what they want their organization to be (purpose) and how they expect it to achieve its purpose (strategy). Campaigns or annual plans should synchronize with and contribute to achieving the strategy. So, does an organization really need a strategy? Ask the former CEOs of Blockbuster and Circuit City. Develop, communicate, and ruthlessly execute a clear vision to achieve and maintain an advantage over your competition.
Authored By: Matt Weinshel, Managing Director
[1] “Strategy.” STRATEGY | Definition in the Cambridge English Dictionary, https://dictionary.cambridge.org/us/dictionary/english/strategy.
[2] Collins, Jim. Good to Great: Why Some Companies Make the Leap ... and Others Don't. Random House, 2001.