24 June 2011
Creating Strategy Middle Up
The age of top-down strategy is long
gone. This doesn't fit with the guiding principles of modern,
empowered business cultures as it tends to disempower and
demotivate the people who are our greatest asset. Strategy is now
developed 'middle-up', often involving cross-functional teams of
managers, subject experts, and the handful of wise old heads that
often sit quietly hidden away in every organisation. This, in
theory, shouldn't be a problem. Indeed, since the people that
live-and-breathe the business everyday know the strategic levers
better than anyone, this should be the ideal way to create
breakthrough thinking. All we need to do is liberate this latent
power within the organisation to beat the pants off the competition
(and, at the same time, save a fortune in high powered
consultants).
The problem is that this middle-up,
consultative process for creating strategy is prone to severe
pitfalls if managed poorly. Without structure, process and clear
deliverables, this can end up as 'strategy by committee'. One board
member of a leading airline recently expressed her frustration and
horror at this modern, workshop-based approach, bemoaning the
'death of individual thought'. Furthermore, since strategy
naturally destabilises the status quo and challenges territories,
organisational politics can often interfere and create unhelpful
tension and even strategic paralysis.
However, the prize from getting this
right is so big that middle-up strategy needs its own definition of
best practice. This approach is too good to miss. It not only taps
directly into the best source of rich and vibrant thinking, but it
automatically creates a motivated and unified implementation team.
And anyway, the best alternative is to use expensive consultants
whom the in-house team will just end up resenting and whose outputs
they will almost certainly
disown.
There are golden rules that can help
make a success of this empowered strategy approach. Here are seven
important ones.
Plan a structured 'journey of
discovery': It's no good just scheduling a strategy
workshop and expecting this to lead to innovative, joined-up
thinking. Developing strategy this way should be a structured
'journey of discovery' for the project team. Designing the journey
is the first crucial task. There are natural phases and milestones
in the journey, and different types of activities to ensure the
right blend of workshop, individual thought and background
analysis. Carefully planned workshops typically form the
backbone, with supporting analysis filling out the flesh. The
project needs to start with divergent, creative thinking and move
steadily towards more convergent, analytical thinking. The journey
needs to cover exploratory pilots, decision points that help distil
new strategic principles, and practical planning sessions so that
everyone understands how to make it all happen.
Create a 'burning
platform': Launching major strategy projects with
cross-functional teams requires a sense of urgency - the so-called
'burning platform'. The term originates from the oil industry (i.e.
a burning off-shore oil platform) and refers to the urgent need to
move from an uncomfortable position. In business terms, this
demands a clear articulation of exactly why we need to change in a
simple and compelling fashion. This might also paint a disturbing
picture of what might happen if we just let the status quo drift
while the competition forge ahead. Without the burning platform,
time-starved managers will not be motivated to get involved.
Get everyone on the same
page: When a major strategy project is launched, it is
amazing how quickly key participants develop different ideas of
what it is all about. Some will want this to fix their own pet
problems, some will have wildly over-ambitious views of what this
can achieve, others will just get the wrong end of the stick.
Creating a clear project charter is the obvious way to get everyone
on the same page as they become engaged. This may be a written
document or, more likely, a short presentation to guide a personal
briefing. This can be followed up with workshop techniques such as
roadmapping - simple but powerful visualisation approaches that
help liberate, structure and distil the accumulated wisdom of the
team.
Predict winners and
losers: As soon as the project is launched and the team is
engaged, the likely winners and losers will start to become
apparent. The problem is that at least some of the big potential
losers will be on the team that is shaping the strategy and, as the
saying goes, turkeys rarely vote for Christmas. The strategy leader
needs to be considering this right from the project inception as
this can create a negative influence or even de-rail the project
completely. The key point is that individual roles will almost
certainly change during the course of a major strategy programme.
If you want to take everyone with you, you need to facilitate a
change in every individual's position and contribution that aligns
with the emerging picture.
Blend experience, gut feel and
facts: Developing innovative strategy requires a balance
of 'hard' data analysis and 'softer' inputs such as the collective
judgment and experience of the management team. Many organisations
go to one or other extreme. Intensive strategy workshops are the
perfect means for combining hard and soft inputs in a balanced way.
But this means careful preparation of meaningful data pitched at
the right level - it's easy to try to 'boil the ocean' of possible
data. It also means preparing each workshop in full detail, using
appropriate visualisation and analysis tools, and making sure that
every activity leads to a useful outcome and a clear set of
strategic insights.
Expose the really breakthrough
thinking: Strategy development can tend to polarise around
two extremes - constraint-driven improvements on today or sexy blue
sky thinking on what might be possible. The former can lack
ambition and the latter is often unrealistic. Both of these
are useful calibration points, but the best answer lies somewhere
between the two. Breakthrough strategy refers to that elusive
middle ground - the point that represents new, visionary thinking
that is also practical and do-able. Getting to breakthrough
requires particular workshop approaches, constant iteration and
dogged determination.
Move seamlessly from planning
to doing: A common problem in traditional approaches to
strategy development is that, even when the final strategy has been
agreed, there is huge inertia that delays the launch of
implementation. There are various ways of ensuring that the
transition from 'planning' to 'doing' is seamless. One crucial
issue is seeding implementation champions into the process early
on. These may not be the clearest thinkers on the team, but they
may be the barrier-smashing enthusiasts who will make it happen.
Another important step is to define pilot implementation projects
and not be afraid to launch these even before the overall strategy
is complete. Strategy shouldn't be developed in an ivory tower and
there is a lot to be said for learning by doing.
But can we demonstrate that
middle-up strategy works?: One leading
multi-national recently used this consultative, workshop-based
approach to develop an innovative strategy across a large, complex
organisation. This $5bn global leader with 15,000 staff had grown
significantly by acquisition over the preceding 10 years, leaving a
latent need for integration. The imperative was to develop a
unified, global strategy that would optimise the operational
network to reduce cost and provide a platform for growth in the
major emerging markets.
This company was made up of three
autonomous regional businesses (Americas, Europe, Asia)
co-ordinated across four global product lines. The dynamics and
tensions within the complex matrix of responsibilities was a key
feature of the project. The strategy process involved running a set
of pilot strategy workshops within each global product business,
followed by a set of aggregation workshops organised by geographic
region, then culminating in a finalisation workshop covering the
whole business. All this was interspersed with significant
exploratory and then validating analysis. The strategy development
process involved 110 senior and middle managers and took around 12
months. These managers, of course, had to run the business at the
same time (although special backfill support was organised to
free-up some of their busy schedules).
The outcome of this intense and dynamic
process was a multi-faceted strategy that was truly both global and
local, and that could naturally be implemented by regional teams
with consistency regarding globally standardised products and
processes. It provided the blueprint for a $250m
transformation programme which required a Wall Street rights issue
to fund. Five years on, the project has created $55m in repeating
annual savings for the company, has helped to reinvigorate its lead
in technology, and has forged market-leading positions in Asia,
South America and Europe.
So it can be demonstrated that
middle-up strategy not only works, but can produce stunning
results. It fits the modern business culture, it intimately
involves the people who know the business best, it automatically
primes and motivates implementation champions, and it gets results.
It is far preferable to top-down decree or simply outsourcing
strategy to external consultants. Running effective
middle-up strategy may have just become a critical success factor
in 21st century businesses.
About the
Author
Paul Christodoulou has over 20
years experience as a strategy leader working in international
business. His career has seen him working in senior management
roles, heading up global strategic projects covering manufacturing,
marketing, M&A and post-M&A integration. Originally an
engineer, Paul switched to strategy after completing his MBA at
INSEAD which was supported by the Sainsbury Management Fellowship.
SMF was established in 1987 by Lord Sainsbury who believes talented
engineers make a valuable contribution to the senior management of
an organisation.
Paul is currently working for the
University of Cambridge Institute for Manufacturing managing
collaborations with partner companies aimed at putting university
research into practice in the general area of global strategy
(ifm.eng.ac.uk). Paul also runs a strategy consultancy Strajectory
which provides innovative and practical strategy support to
businesses of all sizes (strajectory.co.uk). Paul's recent book
"Strategy Workshop Toolkit: How to Herd Wild Cats and Create
Breakthrough Strategies" is available through online
booksellers.
