2/10/24, 9:22 Keep Strategy Simple

Strategy

Keep Strategy Simple

by Graham Kenny

August 27, 2024

Illustration by Michelle D’Urbano

Summary. Few companies have a clear idea of where strategy making ends and
execution begins. As a result they develop strategic plans where they’re not
required and fail to develop strategic plans where they are. To help prevent this
happening to you Graham... more

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In one of my recent LinkedIn discussions about business strategy,

a commenter lamented: “Unfortunately, many of the strategic
plans we see are no more than a mish-mash collage of ‘individual
level’ rush-to-do’s, often missing out on an ‘organization-level’
cohesive and thought-through design intent.”

My correspondent had tagged an important challenge for all

companies: where does strategy making end and execution begin?
Most haven’t found a clear answer to this question and the impact
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is immense. It means that businesses develop strategic plans

where they’re not required and fail to develop strategic plans
where they are.

The reason for this failure is that they are rushing to action
without taking the time to develop a clear and easy to understand
strategy to guide their action planning. And that’s because they
haven’t realized that articulating a simple strategy is a
challenging task. As Steve Jobs once put it: “Simple can be harder
than complex: You have to work hard to get your thinking clean to
make it simple. But it’s worth it in the end because once you get
there, you can move mountains.”

There’s no one right way to make a strategy. If there were, then

we’d all know it by now. But I can offer some tips that will help
you get there.

Don’t develop strategic plans for functions.

Clive is CEO of a business I’ll call “Scrupulous,” which provides

commercial cleaning equipment, parts, and service to its business
customers. I reviewed the company’s documents in preparation
for a senior management strategic planning and performance
measurement workshop.

What struck me was the number of “strategic plans” they had.

One each for Marketing, HR, and IT. (This is not an uncommon
practice and even advocated by consultants.) And each contained
a list of actions. For example, the Marketing Strategic Plan was a
list of actions to be carried out by marketing staff, such as,
“Arrange face-to-face meetings with major accounts” and
“Research companies operating in the industry to identify

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prospects and add to [customer relationship management

system].”

Marketing is a process or, if you prefer, an activity carried out by

individuals. (The “ing” on the word tells you that.) So, if you
couple “marketing” with “strategic plan” the result is most likely
to become a list of actions carried out by individuals.

Marketing’s plan was indeed an operational one not a strategic

one. While that’s as it should be, why label it a “strategic plan”
except to make it sound more important. The practice lowers the
significance of “strategy” and “strategic plan” for members of the
organization where it is relevant and important.

Confine “strategy” to the business level.

Scrupulous lacked a strategic perspective at the business level

because executives equated “strategy” with action. Strategy
involves positioning, not action. For example, a company may
take a position on product quality — such as high end with a
premium price, or low end at a low cost.

Take this product quality position snapshot from Toyota. “We will
continuously strive to delight our customers with the outstanding
quality of our products and services.” With this and back-up
statements, Toyota draws a line in the sand by stressing the
importance it places on its products being consistently reliable. It
sees this as part of achieving a competitive advantage. We know it
follows through on this by the way it instantly recalls any models
with problems.

As another example of positioning, also from a well-known brand,

catch this glimpse of McDonalds positioning on customer service:
“For individuals looking for a quick-service restaurant with an
exceptional customer experience.” Note that it is a position of the
company not an action by an individual or an activity of a

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department. McDonalds sees this as a key ingredient to its

competitive edge.

Clive’s task is to articulate these strategic positions in statements

so that his executive team is clear about where Scrupulous stands.
Clarity at the business level about the positioning then informs
operational planning for the functions and teams.

Keep strategy and action separate.

Individual action focused on execution sits below business

strategy and falls on the shoulders of various departments or
functions (HR, finance, manufacturing/operations and
marketing). In Toyota’s case this includes actions from members
of functions such as “create and nurture people of quality by
continuous education and training” (HR) and “strengthen supply
chain by an effective traceability system” (manufacturing).

To avoid strategy becoming mere action, you need to take a

helicopter view of your organization and consider its relationship
with its key stakeholders and competitors. This idea is congruent
with the origins of “strategy” in the military. There, armies looked
at their positioning “from above,” so to speak, to assess their
strengths and weaknesses against the opposition.

From that helicopter view you see the interactions between

Scrupulous, its stakeholders and competitors. “Strategy” involves
obtaining a competitive advantage on the strategic factors that
these stakeholders value such as product quality and service for
customers. Doing so bats away the competition.

A critical change in thinking can often be affected by changing

the language used within the organization. I recommended that
Scrupulous’ executives use “customer strategy” in place of
“marketing strategy” and “employee strategy” in place of “HR
strategy,” for example. This places their minds where it should be

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for strategy — outside with stakeholders, not inside with

functions.

Mind your language.

The use of language and terms has a fundamental impact on

thought and behavior. Whenever you find yourself confused
about the boundaries between your strategy and the actions
you’re taking, it may help remember this simple aphorism: What
happens on the outside is strategy, what happens on the inside is
action.

Start by ditching terms like “marketing strategy” and “HR

strategy.” It’s a big call, I know, because it’s common practice. But
common practice doesn’t make it best practice. Replace them
with “customer strategy” and “employee strategy.” This is more
than semantics as it broadens thinking. The term “customer
strategy” is more likely to keep you focused on the customers. It
forces you to look outside to your stakeholders’ needs.

Then shelve terms like “IT strategic plan.” A plan is not a strategy.
That’s not to say that plans aren’t important — IT, HR, and all
teams and functions should have plans — but plans are
operational constructs, however you label them. If you start
calling plans strategic, you’ll be tempted to short-change the
effort you need to make to create a good strategy.

•••

I can’t guarantee that this advice will get you to the right strategy.
But it should, at least, start you on the way there, and prevent you
from making some basic mistakes. At the end of the day, the key
thing to remember is that a strategy is about identifying where
you need to go in order to satisfy your stakeholders’ needs. As
such, it is essentially an outward looking, relatively high-level
exercise. Only after you’ve figured out where you want to go
should you move to the operational challenge of figuring out the
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specific steps you’ll need to take on the inside in order to get

there.

Graham Kenny is the CEO of Strategic Factors

and author of Strategy Discovery. He is a
recognized expert in strategy and performance
measurement who helps managers, executives,
and boards create successful organizations in
the private, public, and not-for-profit sectors.
He has been a professor of management in
universities in the U.S. and Canada.

Read more on Strategy or related topic Strategy formulation

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