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The Value of Strategy

"Strategy spans all business functions and determines how effective the interaction is between them, making it the management practice with the greatest potential to improve the fortunes of a business. In fact, strategy could transform business as a whole and thus entire economies."

Paul Barnett, Founder

Monday
Dec022013

Advancing the Professional Practice of Strategy

When I first started examining the difference between strategy and other professions such as finance and law, I was just starting my role as Executive Officer of the Strategic Planning Society. That was in January 2011. I began by doing a classic gap analysis, and it quickly became clear that strategy, or strategic management as I now prefer to call it, is a management practice that is a long way from becoming a profession.

 

My research, and the thoughts it generated, were later published in the Society's magazine (articles available upon request), along with articles that we commissioned from a number of thinkers on the subject. The purpose of the magazine was to provide some context to a conference I organised on behalf of the Society, Developing Strategy as a Profession, held at Said Business School in March 2012.

 

It was clear from the conference that there was strong international interest in the idea that strategy needs to become a profession. We had participants from places as diverse as Australia, Brazil, Turkey and Dubai. It was also clear from the gap analysis that the process would take a decade at least. Indeed, the scale of the challenge was to prove paralysing for a group of volunteer trustees of an organisation that had been in long-term decline, and had to deal with the more immediate financial crisis the organisation was facing, due to the loss of its largest source of revenue (even though we had started to get to grips with the problem and were starting to generate healthy growth in membership income).

 

The lack of resources I could deal with; the organisational paralysis I could not. To my mind, the task of evolving strategic management as a profession was clearly urgent and needed to be led by a strong professional body. If the Strategic Planning Society were to perform that role, I concluded, it needed a greater sense of urgency and a much more entrepreneurial mindset. It was clearly time for me to move on, and I did so on good terms at the end of 2012

 

My next move was to established the Strategic Management Bureau as a for-profit organisation to work with senior strategy professionals. And also to provide practical support, such as event management, to the Strategic Planning Society in the hope that doing so might improve its fortunes and and lead to it becoming a strong professional body. Soon afterwards, I attended the Society's Extraordinary General Meeting and heard their future plans. What I heard was all high-level, blue-sky thinking and evidence of a very corporate mindset, but still no sense of urgency. My conclusion was to wish them well, but move on.

 

To be honest, I had already take a clean piece of paper and considered what I would do differently from the Strategic Planning Society if I wanted to establish a body capable of advancing the professional practice of strategic management. My conclusion was that there was nothing about the Strategic Planning Society I would wish to copy. Their Extraordinary General Meeting just confirmed this, and helped me make up my mind to put my own plans into action by establishing the Strategic Management Forum.

 

In a year and a half I think I have achieved more than I could have in six years if I have stayed with the Strategic Planning Society, but my sense of urgency is strong and of course I wish I could have done even more. In the past year and a half we have:

  • Produced a website and various initiative-focused micro sites

  • Published a monthly newsletter

  • Run a programme of events with KPMG on Better Business Reporting

  • Published inspirational daily emails which we call Strategy Snacks

  • Grown a private LinkedIn community to more than 3,000 members, with very lively discussions provoked by our Strategy Snacks

  • Attracted nearly 40 Founder Members (potential board members), representing the community we wish to serve and the global mindset we wish to adopt. They are very senior strategists from all sectors and from developed, developing and emerging nations

  • Launched our Chief Strategists Club and run the Inaugural Dinner with Rita McGrath as our first guest speaker. She challenged the ideas of Michael Porter that have dominated strategic thinking for more than 30 years. The event inspired a good discussion with heads of strategy from companies including Rolls-Royce, Linklaters, Marks & Spencer, the Co-operative Group, MasterCard and Standard Life

  • Run Strategy Social networking events in London, New York and Phoenix

  • Organised a memorable event entitled An Evening with Roger Martin (formerly a senior partner of Michael Porter's Agency Monitor; long-term adviser to A G Lafley, CEO of Procter & Gamble; and recently Dean of Rottman Business School)

  • Made the case that strategic management needs to advance as a profession using the professionalisation of medicine and surgery as an analogy. See this Strategy Snack

  • Established a Book Club that offers a 30% discount on management books from several leading publishers (free to members of the Strategic Management Forum)

  • Established an informal strategic partnership with Thinkers50, referred to as the "Oscars of Management Thinking".

  • Begun discussions to create a first joint study group with a leading business school

  • Recruited a CEO of Events and attracted the support of a number of other senior advisers

Our plans for 2014 will be outlined in more detail in January, but this newsletter already contains details of future events including An Evening with Navi Radjou and our Women in Strategic Management Club launch in February.

 

2014 will also see the publication of books I will author. They will cover the concepts of Congruent Strategy and Reputation as Strategy – to be introduced in a speech at the London Futurists conference Anticipating 2025, which will take place in London in March 2014.

 

In 2014, we plan to host many more Strategy Socials around the world, and begin the establishment of our international branch network. Join us and play a leading role in advancing the professional practice of strategic management, for the benefit of your company or organisation, of the economy, and of society as a whole.

 

Written by Paul Barnett, Founder & CEO, Strategic Management Forum

Monday
Dec022013

Book of the Month - December

Jugaad Innovation is this month's Book of the Month. The author won this year's Thinkers50 Innovation Award (see below) and will be speaking at our first major event of 2014, on 30th January.

The book addresses the question: "how do you drive innovation and growth as the global business landscape becomes increasingly unpredictable and diverse?". And it argues that "western corporations can no longer just rely on the old formula that sustained innovation and growth for decades".

"Jugaad Innovation argues that the West must look to places like India, China and Africa for a new bottom-up approach to frugal and flexible innovation".

It introduces six principles which are already being adopted by some forward-thinking western firms.

Cover price £18.99

FREE if you join the Strategic Management Forum in December 2013.

FREE signed copy if you attend our An Evening with Navi Radjou event on 30th January in London. 

Tuesday
Nov262013

Can the use of Key Performance Indicators be improved?

 

In yesterday's Strategy Snack I talked about the idea that it is important to keep score and draw the finish line. In today's Strategy Snack I will cover the next issue raised by Jeroen De Flander in The Execution Shortcut. The issue, as he puts it, is that “a finish line tells us when our strategy is successfully completed”, but “it doesn't tell us how to win”. So “we need a set of signposts that point us towards the finish line”.

 

He goes on to discuss the important difference between lag indicators and lead indicators. To illustrate the point, he refers to marathon running by professional athletes who compete to win. For the majority of marathon runners, by the time you get the data – your time at the finish line – the result has happened. It is a lag indicator of performance. On the other hand, the professional runners seek to predict their finish line success. They do this by using what is called the Yasso 800.

 

Bart Yasso discovered that “the time it takes you to run 800-meter (2 laps) repeats in minutes and seconds works out to be your marathon finish time in hours and minutes”. By the time you get the data (your Yasso 800 time), the result (your marathon success) still has to happen. As De Flander notes, “the great thing about lead indicators is that they offer direction on how to improve performance. They offer the possibility to predict success and make decisions to positively influence success” (the author's emphasis).

 

So the Yasso 800 illustrates what is meant by a lead indicator. The measurement leads to the result. De Flander concludes that “like marathon runners, travellers also need a limited set of lead indicators – signposts – that predict success at the finish line. This feedback mechanism helps them make the right decisions along the way”. And he admits that “finding the right set is something of an art that requires trial and error to get right”. He also warns us to “remove old signposts”, suggesting that this is easier said than done because we get addicted to the indicators we become used to.

 

Further warnings follow. They are that we need to evaluate the added value of an indicator by asking “what important decisions does this measure help us make?”, and to “distinguish between the information needs of the coach and those of the players” to avoid information overload. He suggests that the coaching dashboard is the easy part and that our “focus should be on the players' scoreboard”. He adds: “we need to build a simple dashboard for our travellers – a dashboard that visualizes the finish line and the signposts, the lead indicators that predict success at the finish line”.

 

This last point is interesting given that what we are talking about are often referred to as Key Performance Indicators, or KPIs. De Flander makes good points – they should be the right indicators: ones that are relevant to different levels or functions in the organisation, or, ideally, personal ones that are in sync with the higher level KPIs. This can then help achieve alignment and, if the rationale is made explicit, can ensure that everyone knows the part they play in achieving the bigger goals - sometimes referred to as the line of sight.

 

Written by Paul Barnett, Founder & CEO, Strategic Management Bureau

Discuss in the LinkedIn Group: Can the use of Key Performance Indicators be improved?