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The 7 Deadly Sins Of Corporate Strategy

Written by: Marcos R. Dreher, Executive Contributor

Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.

 

As the legendary Dr. House MD would say: “everybody lies!”. Yes, it is hard but true: in different shapes and formats, lies permeate the lives of many of us if not of all of us. If this is the case in our private lives, why should it be different in the business world? Can businesses lie? Quoting Macbeth: “When our actions do not, our fears do make us traitors.” To be bluntly clear, the worst lie in the business world, I know of, is when we lie to ourselves! We ask what we want to hear, we understand what suits us, and we create a make-believe world where we firmly believe that our market and our customers are really into our products. Yet, when the rubber hits the road (end of the quarter), and the sales don’t come, the whole story is reshaped, and the finger pointing starts…

Don’t get me wrong, failing is also a success (especially when you learn from it), but every so often in the course of our careers, we have to face ego-boosted product managers, CEOs, CMOs, and you name it…that will not accept that their vision lacked real strategy and their product lacked real innovation. in the end, most of these people were so close to the wall (their mindset) that the only thing they could see was a shining brick (the immediate solution they envisioned) and not the beautiful castle in front of them (the value-adding element that the customer is eager to pay for).


I have worked with some of the largest companies in the market and definitely with the brightest people I could encounter in my career. Together, we groomed concept ideas into customer-centric market solutions. I have enjoyed many successes in my career and am proud to see some of the products I help to create on shelves all over the world. I thought of myself as a strategic genius! Nevertheless, after my stint at Harvard Business School, it became clear to me that I was a fake, an impostor who had succumbed to the very same sins I am here pointing out. Corporate strategy can be sliced and diced to different tastes; this is no news, but when you are in a classroom with the brightest there is, and the famous Harvard cold calling starts, that’s when you realize how little you know and how right was Peter Drucker when he coined that culture eats strategy for breakfast. Most people tend to take this quote and say that he meant strategy is irrelevant. This is wrong. He rather wanted to emphasize that a powerful and empowering culture was a surer route to organizational success.


During most of my career, I acted as “the king’s hand,” serving companies in strategic intelligence and corporate strategy development by bringing the naked truth to the boardroom. I have been known as a non-political and straightforward advisor who is not afraid to state things as they are in order to move the needle. I will not lie, this has cost me my job here and there, but I stand by my principles. My function has never been to butter up upper management but to be the voice of reason in an ego-driven chaotic corporate environment. To be the voice of the customer.


One of the things I have always done when starting any new project was place everything into perspective. I start from the end and then move back to the start. As a trained psychologist, I understand quite well the impact of emotions, anxiety and bias in our internal decision-making process; and for any company, product development, or strategy to work, these feelings need to be placed in check. Starting from the end, from the ultimate expected response, starting from the customer and moving backward to the planning, has helped teams to keep those feelings in check by bringing as much objectivity to the project as possible and reducing the level of subjectivity in the decision-making process.


In the large scheme of great successes, we will always read that “the vision” brought us here, that “the innovative thought leadership” was crucial for our development and that “strategic thinking” was a sine qua non-route that led us to the podium. Albeit this might be true, we, the “outsiders,” have only a peak at their success after it happened. Everyone is smarter after the fact, but as they say, “it takes a village to raise a kid,” and this kid is your product. The village is the entire company. Therefore, without much ado, let me guide you down the road of redemption! Let me help you raise this kid by pointing out the seven deadly sins of corporate strategy I have perceived in most boardrooms, with the hope that you will eventually repent those sins and see the light (your customers) at the end of your tunnel (market).


1. Execution is not the same as strategy


You might have the brightest vision, the most honorable mission, and the best structured strategic road map… you might have the best strategic design ever, yet this is all you have: Strategic design. Frequently, companies tend to mix their fantastic strategic design with what we call execution. We need to make clear that we are talking apples and bananas here.


As it goes, you will probably have talked to a handful of your stakeholders and collected what they believed to be key criteria and what they believe to be the decisive factors that will move a customer to purchase your product. Factors that will entice suppliers to partner with you, or even factors that will improve your employer branding and will bring the brightest talents to your company. Your flawless strategic design will have detailed your market positioning, and your pricing strategy and perhaps include your product development pipeline. I hope you get my drift… this design is mostly developed in an insulated environment with a handful of stakeholders and then delivered to a team to execute. Your corporate strategy lacks organizational-level thinking from the start. You handle the strategy booklet to the team, and they rush to execute, but they do not really understand where the company is heading as a whole. The famous leading and lagging elements are not clearly set from the organizational point of view.


We want to make 100 million dollars in 3 years is not a strategy. I know you know this but believe me when I say there are still loads of companies thinking in this way. When you give your strategy booklet to a team, you are basically telling them what they need to do. This will generate a list of actions that will pile over other actions they already had to start with and to make things worse, some companies love to micromanage their execution teams, slowing down their progress, and when execution fails, we say that strategy failed.


Execution is not a strategy, and both need to be tackled from the beginning order to succeed! Keep it in mind that strategic execution operates at an individual level and strategic design at an organizational level. Your first sin will be to have mistaken individual actions for strategy.


2. The problem in execution resides in people and not in the strategy itself


I have often been faced with an interesting situation: The company has really innovative products, yet these are not reaching the peak they should and it is becoming an uphill battle to execute the strategy they had in mind. No wonder it is known that it is ten times harder to get people to execute a strategy than to plan it. The situation I am often faced with is not that the company lacks strategic thinking but rather that it lacks strategic acting.


The first thing I hear is that they have communicated the strategy, they worked with the communication department and made great slides that were shared throughout the company. Yet it needs to be clear that not only does strategy communication not equal execution, but that communication alone is not enough. Communication is about knowing something; execution is about doing something. Between these two elements, there is a gap, and in the middle of it – floating in the limbo, we have the people. These people, who will be on the doing side of the business, need to be aligned, and the people on the knowing side of it need to make sure that this happens.


Again, drawing on my psychological background, it is natural that people scatter. It is natural that we lose focus… we were not created to sustain high levels of concentration (only if our lives depended on it). Therefore, to make sure that the strategy execution happens, companies need to focus on the people.


Who are the people in the organization that could be regarded as high impact? influencers, if you may! Who are the people that are essential for the company to achieve the goal? These are the people who must have the broadest, deepest and intrinsic understanding of what the strategy is all about and the impacts on the company as a whole.


These key busy bees will be adjusting the laser of the organization and be focused on overcoming forward-moving impediments in order to gain momentum and bring the whole execution team behind them. And you are in for a surprise if you think this is a one-time ordeal, you need to enable your executive team to collect real data from the boots on the ground and share them upwards to adjust and balance the strategy as a whole along with the execution plans, in a regular basis.


Your second sin is not considering the human element of your strategic design. Execution will happen only when cross-functional collaboration occurs, when people feel heard and accepted when they realize that their voices contribute to the overall success of the company. Only then will execution happen.


3. You have to build a bridge to cross the strategy execution gap


By now, you must have gotten the idea of the storyline I am painting. Everything revolves around corporate strategic design and execution, and everything in between them is the knowledge and the doing. As a matter of fact is: that the gap between knowing and doing is much harder to cross than we thinking of. The chasm it creates can bring a company to its knees.


For all those involved in the corporate strategic design, please make sure that you all understand what the company identity is, what are the different value propositions of your offers, and what diverse capabilities you possess. If you are able to do that, then you have won half the battle. Move forward and focus on what makes you a winner. Break down your corporate strategy into clear, practical deliverables and learn how to empower people to cascade these deliverables throughout the organization.


Mission, vision, and all that are very important elements in the strategic design, but you need to step out of its shadow and turn to translate the strategy into your company's everyday processes, taking into consideration the capabilities. This will fast forward the cascading of deliverables and facilitate the key people to communicate, align and bring a cross-functional execution roadmap.


In the beginning, I cited Peter Drucker's famous “culture eats strategy for breakfast” quote. Well, to build the bridge between strategy design and execution, it is crucial that the company concentrate on the unique cultural factors that will fuel success. Prioritization is key, and understanding how company cultural-wide beliefs work will be essential in sequencing the execution activities.


The bridge between the planning and execution is a long one, the valley in between is deep, but with the right planning and the right understanding, this bridge will be as solid to cross as the Hoover dam. Air-tight, pragmatical and future-shaped!


4. Your frontline people have no idea of what your strategy is


Right now, stop what you are doing. Let’s play truth or dare. Pick up the phone and call the salesman or any of the frontline people that have direct ‒ and daily interaction with your customer, and ask them if they understand your corporate strategy. I dare you.


Frontline people are seldom ‒ if ever, asked to contribute to company-wide corporate strategy. And this is a mistake. They are asked to execute something developed by someone they probably do not know, and the strategy designer often fails to understand the reality of the business itself. It replicates the famous “whose job is it anyway? the story”: There was an important job to be done, and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that because it was Everybody’s job. Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn’t do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have.


To be successful, companies need to start taking their strategy creation out of the boardroom and engage all of the company, not at the end of the process but rather at the beginning and during the process. it is a bold move indeed, and not all are ready for it.


in the meantime, to ensure your frontline people are aware of what the strategy is, ensure that the communication (the knowing) incorporates at least the different viewpoints, be open for criticism, and for God’s sake, do not dictate what they have to do. Over defining the specifics of how to execute your strategy will create a backlash and paralysis. The bridge between planning and execution will implode, and your people will fall into the endless valley of “I don’t care.”


They should care, and for such, you should use values that resonate with your frontline, as this will guide execution decisions. Create a collaborative environment where your frontline people will be able to share their views as well and contribute if they buy your story. Benjamin Franklin rightfully said: “Tell me, and I forget. Teach me, and I remember. Involve me, and I learn.”


5. Your corporate strategy lacks purpose


A business exists because it provides a service or product that everybody wants and is willing to pay for at a cost that will enable them to sustain growth. Yet, the most successful businesses, the ones who consistently report sustainable growth, have something extra: they place a purpose at the heart of the corporate strategy.


In the era of social media, global corporate scandals and greedy CEOs fall as heavy as a nail in the water. Companies often revisit and reshape their value proposition to ensure that it is still shining. This usually happens when a new trend emerges, or they want to build trust, or even more when they need to focus on pain points.


Purpose-driven strategies are those that clearly state what the company stands for. It is the wind beneath the wings which will lift and drive the impetus for action. The purpose is what your employees will stand by, your customers will love, and your partners will trust.


Having a clear, purpose-driven strategy will unify your organization, especially when we are dealing with matrixed organizations and highly complex ecosystems. The clearer the purpose, the easier it will be to unify the organization. Yet, we know that unity without motivation is just a block of stone. make sure that people understand it, believe it, and trust the purpose, this is the only way they will be motivated enough to execute it.


Overall, the organization needs to have a broader lens when looking inside itself. Identity is a key element, and crucial questions need to be addressed, such as:

What the firm’s identity is undoubtedly found to be?

  • What the corporation claims the corporate brand to be?

  • What the corporate brand is seen to be?

  • What the corporate brand promises to be?

  • What the corporate brand culture is found to be?

  • What the corporate brand needs to be?

  • What senior managers wish the corporate brand to be?

6. Your corporate strategy lacks creativity


Well, unless you have been hiding under a rock for the last 50 years, the name Elon Musk should be known. In check-mate movement, he redefined space travel. I dare to say he turned space travel into the next blue ocean product.


But for most companies, such check-mate moves are seldom in between, and this is so because your corporate strategy development is clued to parameters and assumptions that most like no longer apply to the real world. Companies are afraid to dare, and without daring, we don’t have the tectonic movements in business we wished for.


When designing your corporate strategy, start by revisiting the assumptions underlining the conventional thinking of your company; and then flip this upside down and prove some of these assumptions wrong by deliberately disturbing the status quo of your work pattern in order to break fossilized assumptions.

The assumptions I am referring to are engrained in your everyday process and present in all your processes. Therefore, changing this will require some strong boardroom muscle, but being able to defy boundaries and expand organizational purposes is what will keep the juice flowing and get people hyper-excited in executing the strategy.


Looking into the start services and products, understand the value stream map, and recombine those to increase the added value in a manner that your customer wants and needs it ‒ even though he might not know it yet (again, referring to the cameras in mobile phones). This, of course, means that the boundaries you are moving in will need to be reshaped, the limitations and liabilities will need to be turned into opportunities, and context will come into place, delivering a new understanding of your most pressing problems.


The speed that your corporate strategy is developed and executed is intrinsically linked to the level of creating your team is empowered to have. I mentioned at the beginning of the article that for the most part of my career, I acted as “the hand of the king,” as such, I have always been the one who posed the uncomfortable question and pushed the boardroom to think outside of their cocoons.


Being creative and understanding how to deploy creativity will grant you a spot under the sun.


7. You developed a one-time corporate strategy hypothesis

I lost count of how many times I have heard this: “yes, but we defined this before launching the product. This should have worked” (3 years ago). The hypothesis you develop in the initial phase is valid, but as anything in the universe, it ages.


At every development stage, your corporate strategy needs to be placed against the wall, it needs to be checked if it still holds water or if it is leaking anywhere. your corporate strategy hypothesis needs to be constantly adjusted. Considering this a one-time deal will be the death of any company. Changes are happening at the speed of light. Consumers have more and more power over choice, and their behavior and decision-making patterns are changing by the second.


The deadly sin of stagnation and fossilized corporate strategy needs to be avoided at all costs. Ensure that your teams review it at least in a quarterly manner whether or not it is still valid and adapt when not.


Corporate strategy design and implementation are not for the faint of heart, but in my view, it is one of the most rewarding experiences in professional life. Having worked on both sides of the Ailes (knowing and doing), I had the chance to capitalize and learn from the mistakes I made in my career, changing and adapting the course of action and opening myself to very different ‒ and often contradictory viewpoints.


If you want to know more, or shoot the breeze and exchange experiences, reach out!


Follow me on LinkedIn for more info!

 

Marcos R. Dreher, Executive Contributor Brainz Magazine

Marcos R. Dreher is an accomplished senior executive specializing in corporate strategy, marketing, and strategic intelligence. He has first-hand experience spanning different industries and business models paired with the ability to transfer methodologies and solutions from incubation to global go-to-market roadmaps. With an extensive international experience and fluency in six languages, he brings a robust mentoring toolbox developed across an extensive international experience and fine-tuned by a degree in Psychology, an MBA in General Management and Marketing, and a specialization in strategic marketing management at Harvard Business School.

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