Making strategies stick

Citation

Jackson, S.E. (2011), "Making strategies stick", Journal of Business Strategy, Vol. 32 No. 4. https://doi.org/10.1108/jbs.2011.28832daa.002

Making strategies stick

Article Type: Reaching for value From: Journal of Business Strategy, Volume 32, Issue 4

Stuart E. JacksonVice President of L.E.K. Consulting, Chicago, Illinois, USA and author of Where Value Hides: A New Way to Uncover Profitable Growth for Your Business (Wiley 2007).

Keywords: Strategy, Implementation, Execution, Organizations, Change, Management

The guy who plows the snow in my neighborhood bought himself a new truck last winter. It is a Cummins-powered Dodge Ram 3500 HD (Heavy Duty) pickup, onto which he mounted a Meyer MAX plow with the standard high-carbon-steel cutting edge, optional heavy-duty snow deflector, and many other desirable features.

I was very happy to see him and his new truck before dawn one morning, toward the end of the last snow season, because I could see that I was not going to get out of my driveway without his help. I complimented him on his new truck, which I had not seen before (even in the dark, I could see that it was a heck of a truck). Then I complimented him on his timely arrival. He responded to those two compliments at once.

“Well, Stuart,” he said, from his perch that appeared to be about ten feet up above me, as the oversized diesel rattled away noisily under the hood, “it’s a real nice truck, but it’s no damn good unless you drive it.”

It is the same with corporate strategies. Good strategies do not create value; it’s implementing good strategies which creates value. But unlike driving a truck, getting new business strategies successfully implemented can be really tough. I shudder to think how many strategies get devised each year – in boardrooms and windowless conference rooms – that never actually get put to use.

You might think that implementing strategy in the corporate setting should be easy. The titans in the corner offices simply lay down the plan, and the rest of the organization gets into line, right? Actually, it does not work like that. For one thing, most business leaders are resistant to getting too far out in front of their organizations in embracing change.

For another thing, people hate change – especially planned change! – and the more dramatic a departure a new strategy represents, the more likely that the organization will resist it, and even undermine it. A colleague of mine once told me about a psychology experiment that compared the respective behaviors of rats and humans in mazes. If you moved the cheese, for a while the rats would go to where the cheese used to be. Pretty quickly, though, they would use their noses to go find the cheese’s new location. Not the humans! They would keep going back to where the cheese used to be, lamenting the fact that the cheese (or the human-bait equivalent) had moved, and hoping in vain that someday the cheese would come back to where it was supposed to be.

It is easy to see the same behavior in business organizations, which resist change, despite evidence showing the world changing from the way it used to be. In the early 1990s, Blockbuster Inc. had the foresight to commission one of several studies on the future of video on demand technologies, and how these would impact traditional video rentals. The report showed how roll-out of expanded cable offerings and broadband internet would mean video downloads would start to have an impact around the year 2000, and begin to grow rapidly in the years after that. In September 2010, Blockbuster filed for bankruptcy protection, overcome by competition from online downloads, as well as kiosks and mail services. True, it was a tremendous challenge for Blockbuster to change from its successful store-based format to an online model. But in the mid-1990s, the company had unrivalled clout with all the major studios, a membership of 43 million households, and ten years’ notice to get ready for the new environment. The problem was that the phenomenal success of their original model prevented the organization from taking the drastic steps needed.

In almost every direction we look, in fact, we discover that organizational change is harder than not-change. Even when we understand intellectually that the cheese is being moved, we drag our feet and hope that things will work out as we try to keep everything “normal.”

So how do you get from an unimplemented strategy to an implemented one? And just as important, how do you make that strategy stick? I can point to six tactics that seem to help on one or both counts:

1. 1.

   Keep the strategy-development period short. You do not want to spend a year batting around alternative strategies, because during that year, you are not creating any value. I talk to my clients about the “100-day plan” and the “1,000-day plan.” The first hundred days are devoted to pulling the plan together, and the next 900 are devoted to implementing it. In the same spirit, bake the whole strategic pie before you start serving any of it up. “The most dangerous strategy,” Disraeli once remarked, “is to jump a chasm in two leaps.”

2. 2.

   Aim high, but separate aspirations from commitments. Too many organizations mix up strategic planning and the budgetary process. You absolutely want your planners to say, “We think that this strategy can deliver 20 percent growth.” You absolutely do not want your managers to say, “Uh, oh: if I embrace the goals of this plan, it’s going to be 20 percent harder for me to make my goals, and earn my bonus.” Make sure that your plan allows for “stretch aspirations” – and then put sufficient resources behind those leaders who show that kind of courage. I have seen clients walk away from exciting opportunities just because nobody was willing to sign up to the aggressive projections. On the flip side, I have a client in the retail arena who six years ago took over his company’s nascent on-line business. In an era when everybody else was asking for $30 million to build an on-line business, he presented a vision showing the full potential and asked for $300 million – and got it. Today, that on-line business is the top-performing area of the company, and arguably worth more than the rest of the business put together.

3. 3.

   Communicate it simply and directly. When it comes to communicating the strategy, assume that people can remember one line – and one line only. Sure, you will need a 40-word version for the management team and a 4,000-word version for the board, but the rest of the world needs a one-liner. I love the way the Texas Highway Commission summarizes its anti-littering strategy: “Don’t mess with Texas!” Direct Energy, which is the largest contractor organization for repair and maintenance of heating and ventilating systems in North America, came up with an equally good one: “Simple, friendly, direct.”

4. 4.

   Show the leadership commitment. Whoever is responsible for this strategic shift – the CEO, the divisional president, or whoever – needs to be the champion and cheerleader for the change. This means, first, acknowledging that things could be going better than they are at the moment, an admission that corporate leaders are often reluctant to make. Or even harder, it may mean pointing to the fact that even though things are going great right now, we have to start pointing in a new direction (think Blockbuster). A leader who is willing to commit to change, and make the case for change, is the indispensable starting point.

5. 5.

   Make some quick moves. Far too many companies work up a great, forward-looking strategy, and then do … nothing. That is a mistake: you need to back up your leadership commitment with action. One of the first things to consider is what current activities are you going to stop doing, which products should be discontinued and which existing customers you should stop serving. One of my clients had a particularly macabre way of phrasing this challenge: “You need to be willing to drown puppies, even when they’re looking up at you with their big, sad eyes.”In the mid-1990s, Apple had an astoundingly complicated product line, with some 80 models and variations of its computers, and a dreadful PDA/notebook device (the Newton) that nobody had the nerve to kill off. When Steve Jobs returned to the floundering company in 1997, he immediately began drowning puppies – starting with the Newton, and then moving into the computer lines. “We sell consumer products and professionally oriented products,” he told his colleagues. “We need a desktop offering and a portable offering in each of those two categories.” In other words, Apple would go from 80-plus products to four.

6. 6.

   Fix the organization (even if it’s not broken). Dramatic strategic departures almost always benefit from some organizational changes and new responsibilities. You need to realign the organization to fit the new strategy. Even if the new strategy could be managed without changing the organization, you should think about making some adjustments to signal the new direction.

Did you ever wonder how Teflon – to which nothing sticks – sticks to a pan? Answer: it is forced mechanically into a zillion tiny nooks and crannies that are etched into the surface of the pan. The good news is that your strategic plan is way stickier than Teflon. It will stick, if you follow the six steps outlined above to force it into all those corporate nooks and crannies.