Mark Twain was famously quoted as saying "I didn't have time to write a short letter, so I wrote a long one instead."
The subtext of his quote is that time is the enemy of clear, concise and compelling communication. The same is true of strategy development.
One of the driving forces of business over the last two decades has been the process of deleveraging: driving down costs to make the company more profitable even when it is already profitable. The biggest expense for most companies is labour, so the primary means of deleveraging for most businesses is reducing the employee count. Fewer employees doing the same amount or even more work means that everyone has to focus on the here and now, constantly racing to keep up with the workload. What are today's initiatives and fires, and how do we deal with them?
As a result, there is no time leftover for the functions that are time-consuming but don't have an immediate impact on the day-to-day running of the business. In spite of the fact that it is accepted wisdom that all organizations need a cogent strategy in order to operate effectively, strategy development is one of the functions that falls into the "too time-consuming" bucket. This is not to say that organizations don't develop a strategy. It is just that they don't dedicate enough time to the process to get it right.
An organization's strategy is its North Star. It is what identifies, and communicates to everyone inside and outside the organization, where the company is going. It is what gives employees a sense of purpose and a clear idea of how what they are doing helps get the company to its destination. If that endpoint is not clear and relevant, everyone in the organization has the unspoken permission to do whatever they want in the mistaken belief that it is helping the company grow.
A strategy can be unclear and lack relevance for one of two reasons: The organization hasn't taken the time to get it right or it doesn't actually have a strategy. The latter problem we will address in the future blog post.
The process of strategy development has two main components: gathering the information that will inform the strategy, and thinking. Most organizations are very good at the first part of the process, with reams of data at their disposal about the company's past performance, market conditions and customer perceptions. In fact, the problem here is usually too much data.
Where the process falls down is in the thinking part. It's not that the senior leadership team can't think, it's just that they don't have the time. Like everyone else in the organization, they are so bogged down in managing their day-to-day workload, they don't have time to stop and really think about the business and where it is going. The train just keeps rumbling down the track without anything more than a superficial thought of whether it is the right track (or worse, they know it is off track but are too busy to get it back on track).
Not taking enough time to develop an effective strategy has many risks. In the worst-case scenario, the company goes bankrupt (Blockbuster, Borders, Nortel and possibly RIM in the not-too-distant future). While there are many conditions that led to the demise, or possible demise in the case of RIM, of these companies, none of them had a clear and relevant strategy for the future they faced. Taking the time to develop a clear and relevant strategy, rather than just putting out the immediate fires, would have guided these companies through the fundamental transformation they needed to survive and thrive.
For many companies, the consequences are not so dire. They are doing OK but not living up to the expectations of the board or shareholders. So out with the old CEO and in with the new, who is expected to turn around the company in the next 60 to 90 days. The new CEO implements a wave of cost-cutting and business building initiatives designed to show progress at the next quarterly meeting and the one after that, but that may or may not actually contribute to the long-term health of the company. In this common scenario in which a company and its CEO operates on a quarter to quarter basis, there is never enough time to develop a strategy.
Clichés can be annoying but they can also be instructive. The cliché "there is never enough time to get it right but always enough time to do it over" is apt for strategy development. The problem most companies face when they don't dedicate enough up front time to strategy is that fixing it takes way more time and is way more expensive when things go off the rails.