Avoiding the pitfalls of complex strategy

Avoiding the pitfalls of complex strategy

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We have all been part of it, the strategic planning exercises that run across hours, days and even weeks while a strategy and a set of supporting items are established.

The energy is high in the early phases of planning and there may even me some excitement around making a difference, setting some exciting targets and collectively growing as a result.

But, by the end of this process the emphasis shifts to just wrapping it up, finalising the confusing choices between phrasing, metrics and the subsets that will provide more specific direction to a specific area of the business.

Those that carry the torch for the implementation of the agreed strategy know the challenges the next 12 months present. The selling and re-selling the strategy to the workforce who were not a part of its construction, the reporting and governance changes that come from modified KPIs and new responsibilities, the embedding of the strategic wording into company branding, employee performance plans and even contractual agreements. It’s a tough gig and it can be particular tough if the strategy fails the simplicity test.

By simple, I mean can it be explained in a sentence and does it clearly connect to the vision statement that it supports? Does it make sense for each person at every level of your organisation and critically, will it provide a level of comfort for your shareholders and customers?

An organisational strategy must be clever. It must demonstrate the collective IQ that has contributed to it and it needs to differentiate you from your competitors.

Here’s the biggest and most important question: can your people easily understand how it guides their daily activities and similarly, how they contribute to its achievement by doing a good job?

The key point here is that an overly complex strategy is not only hard to understand and relate your work to, but it also can be constraining. By constraining I mean that it may remove the opportunity to pursue emerging opportunities, or it may be too difficult for employees to use as an empowering force that helps drive their own team activities.

Eisenhardt and Sull make a good point in their Harvard Business Review article: “Strategy as simple rules”. This article looks at how making your strategy a set of simple rules provides both the guidance required and the flexibility to quickly jump on the opportunity of the day that was not evident at their strategic planning day five months ago. Furthermore, a set of simple rules is infinitely easier to apply at the coalface than trying to interpret a generic strategy, which, through each person’s unique lense, can result in a number of different outcomes.

The best example provided in this article is that of Yahoo!, who despite not appearing to have a stated strategy, have found success through application of simple rules that have helped them to be flexible while retaining a common approach to their work.

In its infancy, Yahoo! was a flat company with an entrepreneurial workforce that needed to be flexible and the best form of direction was simple rules. But, that does not mean a more hierarchical company cannot benefit from a simple strategy that is outlined by something as simple as a set of rules.

So, when considering your next strategic planning exercise, see if you can’t inform that with some research on what sort of initiatives your people have responded well to. Perhaps, if this is blended with your vision and approach, you can create a set of empowering directives that can be your strategy.

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Benjamin Smith