Tag Archives: strategy

Stand well back – strategic thinking for success

This is a follow-up post to: Think about it – 8 ways to enhance your thinking

January is a great time to do some strategic thinking [but then so is any time!].

To think strategically, you need to stand back, look at the big picture, see the business as a whole and take the medium to longer-term perspective. You need the wide-angle rather than the telephoto lens.

Successful Strategies

Robert Grant suggests that successful strategies are based on four key elements:

Elements of successful strategies

Elements of Successful Strategies

  1. Simple, clear, agreed objectives. If everyone is clear about what you are trying to achieve they should be able to work out how to help make it happen,
  2. A profound understanding of the competitive environment. If you understand what is going on in the world and how it may affect your business, you know who you are competing with and on what basis then you can work out what you need to do to succeed.
  3. An objective assessment of your resources and capabilities. If you understand whether you are fit enough to compete then you can work out how to exploit your advantages and set up approaches to improve where you have disadvantages.
  4. Effective Implementation. Having good ideas is of no value if you can’t put them into action. This was discussed in a couple of earlier blog posts [Turning good ideas into effective actionOne small step – from good idea to effective action .

Are you well equipped to develop and implement effective strategies? If not, what are you going to do to move forward? [If you are not moving forward, you are going backwards!]

Focus on the real issues

Most businesses need to do several things to move forward, but may find it difficult to work out what to focus on. There are many things which warrant attention and effective action requires focus on the things which really matter – developments inside or outside the business which have a significant effect on the organisation as a whole. They are likely to impact the business’s ability to meet its objectives or to compete effectively. These issues are also likely to require the application of significant amounts of money, time and effort and are often bound up in decisions which are not easy to reverse.

I like to think that most businesses will have between 3 and 7 [5 ± 2] issues of this type at any time [this matches recent thinking on the number of different things individuals can consciously focus on at the same time].

Strategic Issues and Relevant Questions

Strategic Issues and Relevant Questions

The graphic above suggests some questions you might find useful depending on the number of strategic issues you have.

Structure your issues

Many businesses think that they have many more than 7 issues to contend with. In most cases, however, this is due to a lack of structured thinking. Often it is easier to focus on the symptoms rather than the underlying disease. In these cases, structuring these issues can make it easier to see what the real issues are. This requires standing further back and taking a broader perspective.

Structuring Strategic Issues

Structuring Strategic Issues

Start with Strategic Thinking

Strategic thinking will help you to understand the underlying issues and focus your attention on what really matters. Structuring strategic issues in this way can reduce the feeling of being overwhelmed and the associated levels of stress by making it easier to see where attention should be concentrated.

Strategic thinking is a key component of pivotal thinking and needs to be spread throughout the business if you are to be successful. It is arrogant to assume that only the top people in the business can have the best ideas on how to move the business forward. In many cases, your frontline staff will have a much better understanding of what is going on in the world and what your real strengths and weaknesses are – so involve them in the process.

It is very easy to be drawn into operational thinking and focus on the details of the business – this can easily become the default thinking process.

There are many approaches to strategy and plenty of theory to structure your thoughts but the most important first step is to use effective strategic thinking.

Work at it

Effective strategic thinking needs effort and regular attention, it does not come naturally to most people and must be worked at. The strategic thinking muscle responds well to regular exercise.

Advertisements

Think about it – 8 ways to enhance your thinking

When you are faced with a critical decision in your business, you probably recognise that you will need to give it some thought but how often do you think about how you need to think about the issues involved?

That’s right! Do you think about how you need to think?

In his seminal work, Six Thinking Hats, Dr Edward de Bono highlighted the need for different modes of thinking at different points in the process and in particular the need for everyone involved to be thinking in the same way at the same time.

I’d like to build on that idea by suggesting eight key thinking styles that you should apply to any critical decision you need to make – I call this Pivotal Thinking. The key themes are outlined below and each will be explored in detail in subsequent postings.

The thinking styles are:

  1. Critical
  2. Strategic
  3. Creative
  4. Systemic
  5. Project
  6. Lateral
  7. Process
  8. Reflective

Critical Thinking

This style is particularly useful for examining information and testing assumptions. It is exemplified by the approach of Henry Fonda’s character [Juror #8] in “12 Angry Men”, probing, challenging and taking nothing for granted.

Strategic Thinking

This approach is crucial for looking at the big picture and long term. It means standing back from the detail and looking at aims, objectives, trends and capabilities. It also means looking at opportunities, threats and options from the perspective of all stakeholders.

Creative Thinking

To get ahead of your competition, avoid getting into a rut and find better answers to the challenges you face, you need to think creatively. Contrary to popular opinion, this can be helped by a structured approach which balances and sequences divergent and convergent thinking, selecting appropriate tools and techniques at each stage.

Systemic Thinking

You probably learned to think systematically at school / university but sometimes there is a need to think about the system as a whole, the interactions between the various parts and the causes and consequences of particular options. This style goes hand in glove with both strategic and creative thinking.

Project Thinking

Managing projects needs a different style of thinking to most management situations. Project thinking requires you to pay attention to the sequence of events, the flow of information and the interactions between events. It is highly relevant to the implementation of strategy and requires focus on objectives, roles and resources.

Lateral Thinking

Your closest competitors are likely to come up with similar strategies and solutions to those you arrive at through logical analysis, so it can be useful to use lateral thinking to arrive at better, non-intuitive solutions. This thinking style, invented by Dr Edward de Bono, encourages you to arrive at better solutions by attacking the issue from completely different perspectives and often through an intermediate unworkable solution.

Process Thinking

In many cases, it can be very useful to use these thinking styles in combination or in appropriate sequences. This is where process thinking comes in – a bit like the Blue Hat in Six Thinking Hats, it will help you select the right thinking style for the situation and decided on the order in which to apply them [and recycle if necessary]

Reflective Thinking

To help you learn and benefit from previous experience, it can be useful to adopt a reflective thinking style. This will allow you to look at what you have done in the past and the results you have got. If you combine it with a critical approach, you may get to the real causes of past failures and successes and develop much improved approaches.

So the next time you think you need to think about something – think first about how you need to think.

Think about it!

Logical Developments … well maybe not!

If you are looking to develop your business and call in outside help, you are likely to be told to:

  • Be clear about where you are trying to go [some form of vision or mission statement]
  • Analyse what is going on in the market / world [STEP and market analysis]
  • Examine your strengths and weaknesses [SWOT or resource analysis]
  • Produce a plan to help you get there

Different advisors will use different jargon for each of these stages but they all mean the same thing – a logical analysis of the situation, a logical assessment of your capability to compete and a logical plan for moving forward. A very logical approach.

Usually, this is sound advice, particularly  if you want to improve gradually and it is certainly better than not doing any analysis but… there is a hidden danger.

if it is logical to you, it will be logical to everyone else!

and that will make it easy to copy and hard for you to differentiate yourself.

To make a step change in your performance and open up new possibilities, you sometimes need to think differently, look at the market differently and act illogically.

Aircraft landing at Nice - Cote d'Azur

(c) Jim Yates 2011

Think about Stelios and EasyJet for example: He didn’t say… “how can I make air travel a bit cheaper?” – “He thought ..”If I can make it as cheap to fly from Liverpool to Malaga as it is to get a train from Liverpool to Edinburgh – enough people will go to Malaga for the weekend to make it profitable!” [You can insert your own choice of cities – the idea’s the same!] By doing this, he created a profitable niche in a very challenging market [and acquired a lot of imitators over time!]

It may sound logical once you get to the idea but you wouldn’t get there by logical, analytical thought processes. You might be able to construct a logic for how you got there by working backwards but you’d never get there in a logical linear fashion.

So how can you look at your product, service, market from a different angle and come up with an offering that excites new groups of customers?

Do you have the skills to help your team to come up with radical, illogical answers?

How can you encourage new ideas and more importantly stop crushing them?

Turning good ideas into effective action

Background

I’ve worked in capital projects for over 30 years. In that time, I’ve seen many examples of great ideas which ought to have been put in to action and lots of really bad ideas which have had money thrown at them. A few years ago, I co-authored a paper for the Irish Academy of Management which looked at how internal systems, policies and procedures had limited the ability of a couple of companies who were trying to enter a growing market sector and enabled another [with arguably fewer resources] to do so effectively.

I was also mindful of an interview I’d heard Michael Porter give around the time that he produced a report for the Government on UK Competitiveness. He suggested that the strategies developed by UK companies were at least as good as those dreamed up by our competitors but that our top management teams were much less able to communicate the intentions, rationale and requirements of those strategies to their middle managers.

Approach

This got me thinking and I produced a Mind Map based on the McKinsey 7S model to structure all of the issues which I thought might have a bearing on the issue.

Mind Map

Strategy Implementation Mind Map

It’s clearly a complex issue which would need a lot of research to sort out but I thought it would be worth my while doing a little digging around and I wanted to test out the LinkedIn Polls feature which someone had recommended.  So I started a poll.

In retrospect, I ought to have thought about it a bit more before diving in but…

I learned quite quickly that the structure of the poll places some significant limitations on what you can ask and how participants can respond but here is what I asked:

What is the main reason stopping businesses from implementing the good ideas they come up with?

The five options I listed were:

  1. Finance
  2. Company systems, policies and processes
  3. Organisational Culture
  4. Skills
  5. Risk Aversion / Self-Confidence

I realised that I had failed to make it clear that I was talking about ideas which were generally held to be beneficial for the business and that the final option was intended to refer to the individuals concerned rather than the businesses. You live and learn!

The poll was open to three distinct groups of people on the LinkedIn Network:

  1. My personal contacts ~ 500 at the time
  2. The Alumni of the Open University MBA programme
  3. Members of the Institute of Directors

Results

The graphic below summarises the results of the poll which drew about 350 votes and around 100 comments across the three groups.

LinkedIn Poll results

LinkedIn Poll results

Observations

I had expected that in the in current economic climate, most of the votes would be for Finance – what was surprising was that most respondents felt that cultural and organisational issues were the most predominant cause of good ideas falling by the wayside. Many commentators suggested that Company policies, systems and procedures and to some extent Risk Aversion / Self-Confidence were attributes of Culture too. Several also thoguth that Structure was a relevant issue [harking back to the 7S model].

This seems reasonable  and is worthy of investigation in a more structured research programme.

It was notable that there were comparatively few votes for Skills – what was interesting was that quite a few commentators mentioned that Communication ought to have been added to the list of options. I had in my mind at the outset that communication skills were likely to be a significant contributor [and this had been alluded to by Michael Porter]. So perhaps it was my communication skills which led to the low vote!

The comments on the poll provided some very useful insights into the issue and if you would like to see all of the comments, please drop me a request by email to jim@fulcrum-management.co.uk.

What it means for you!

It seems likely that in most businesses, there are cultural and systems barriers which get in the way of good ideas being raised by the workforce and finding their way to the top of the organisation. Similarly, there are barriers which stop the good ideas and strategies of the top team from permeating down to the workforce / implementors in a way which motivates them to take effective action. If you want to move your business forward, you will need to address both sets of barriers.

It also seems that when Finance is put forward as a reason for not taking action, it may well be just an excuse! The real issue may well be that it is just too difficult to get things done round here!

On a brighter note, it seems that where there’s a will, there’s a way – where there is a consensus for action a budget will be found!

Please let me know what you think.

5½ Ways to predict the future!

Quite a few years back, I listened to a recording of a Tom Peters seminar where he quoted one of the development team of the Apple Newton [without which we may well have never got smart phones, i-pads and related tablets] as saying “The future was predictable but no one predicted it”.

Future can’t be predicted at the level of knowing the next winning set of lottery numbers but you can tip the balance in your favour – if you think about the future and look at what is going on in the world!

Here are my tips on how to do it:

1. Expand your horizons

Spend some of your time thinking about the future on a longer time frame than you do now. Ideally, you should be thinking about what is likely to happen in the next 5-10 years not next week.

2. Look at what is going on in the world

I use a framework I called ASPIRE & INSPIRE – which looks at

  • Social
  • Political
  • Innovation
  • Regulatory and
  • Economic

drivers of change.

You’ve probably seen similar ones and may even have used them before. The key to success however is not to do what most people do – work out from your business because your view will be coloured by who and what you are. You need to work from the outside in, asking:

How each driver could affect your industry or sector, does it affect you disproportionately and how well placed are you to respond.

3. Listen to your customers – especially the awkward ones

Look at what your most demanding customers are doing – are any of them using your products and services in unusual ways, are they asking for features which others aren’t. Then ask yourself whether these are likely to become trends.

4. Scenario Plan

Often, there are relatively few options on the way an issue will pan out – you can plan for all of these. If you can plan for an outcome which your competitors have ignored and that’s what happens;  you will have an advantage over them. Most businesses don’t plan for change so you stand a pretty good chance of being ahead of the game whatever the outcome.

5. Make your own future

The late, great management thinker Peter Drucker said that the best way to predict the future was to create it. So put some effort into being different, creative and innovative – can you produce interesting and exciting products and services before the competition have realised the need?

and finally

If you are not doing any of these then you are predicting your own future – you will be overtaken by events or the competition and go the way of famous names like, Woolworths, Slazenger and  TWA – don’t forget that even Marks and Spencer and Harley Davidson both nearly got caught out by taking their eye off the ball.

But

None of this will be any use unless you take action – so get on with it!