Does Your Strategic Intent Deserve Personal Effort and Commitment? Or Are You Guilty of the Seven Deadly Strategy Sins?

I've heard enough definitions of a mission statement to fill a stadium, and I bet you have too.  You might find it easier to cope with the concept of "strategic intent", which I picked up from the July/August issue of HBR, in an article by Gary Hamel and C.K. Prahalad called Strategic Intent *. 

It cleared some dust from my summer-fogged brain, and got me thinking.  It's worth reading the whole article for a number of good nuggets, but here's the part you should think about starting today:

"Strategic intent sets a target that deserves personal effort and commitment"

The authors note that the goal of "maximizing shareholder wealth" is not something we all think about in the shower, because it isn't very mobilizing.  Compare it to the examples they use of Canon ('beat Xerox') or Komatsu ('encircle Caterpillar').   

I used to work in a big company.  When I got promoted to the point where I interacted occassionally with senior executives, some real alarm bells went off for me.  I remember hearing one declare our corporate mission to be "having the best efficiency ratio in the industry". 

I knew this would not mobilize the few hundred people that worked for me.  Heck, it didn't even mobilize me.

(You don't have to be a global business to have an energizing strategic intent.  I commissioned some coffee mugs from Lucky Rabbit earlier this year; when they arrived, they announced their mission as the creation of everyday treasures.   And they are.)

The article clearly demonstrates how too much focus on the existing competitor landscape and existing company capabilities prevents reaching for real leadership.   A lot of strategy tools that we use don't help matters:

"It is not very comforting to think that the essence of Western strategic thought can be reduced to eight rules for excellence, seven S's, five competitive forces, four product life-cycle stages, three generic strategies, and innumberable two-by-two matrices." 

..."Moreover, even reasonable concepts like the product life cycle, experience curve, product portfolios, and generic strategies often have toxic side effects: They reduce the number of strategic options management is willing to consider.  They create a preference for selling businesses rather than defending them.  They yield predictable strategies that rivals easily decode"

This article was first published in 1989, but I found a surprising resonance with today's corporate dynamics ... just substitute the names of the companies they mention.

Seven Deadly Strategy Sins

The key points that captured my interest amount to a list of deadly sins, still with us long after 1989, and worth meditating upon as you face the mirror every morning:

1. Executives hope to motivate people with mission statements and corporate goals that are not motivating, not exciting, not ennobling, and often seriously dull
2. When organizations are overloaded with initiatives, executive credibility suffers along with effective execution
3. Executives need to share "reciprocal responsibility" with employees -- both the pains and the gains.  This means sharing the truth about what's going on in a meaningful way at every level of the business
4. Organizations that measure only on ROI encourage management to focus on moving the denominator (level of investment) down, not the numerator (revenue) up, leading to a cycle of downsizing that ultimately erodes value
5. Too much focus on inflexible SBU (Strategic Business Unit) organizations can favor outsourcing instead of development of core competence, resulting in less organizational learning, and ultimately less ability to compete.  (Yup, been there too.)
6. Moving managers too quickly between assignments encourages either abandonment of long term development of capabilities in the business, or attempts to jam long-term development into short time horizons, typically with acquisitions 
7. Focusing too much on the strategy hierarchy of corporate goals --> business unit strategies --> functional tactics fosters an elitist view of management and "tends to disenfranchise most of the organization".  Yes, there needs to be coherence, but not at the cost of ignoring all the brains that aren't in head office

Strategic intent:  What's yours?

PS.  You can't get people focused on building a better customer experience with a strategic intent that has some sort of feeble "shareholder wealth" mantra.  And that's why it's in this blog.

* Yes, you have to buy the article, unless you are already a subscriber.  However, there is a nice summary at this link, if you scroll down to the bottom of the page.