The four key issues with most corporate strategies
We’re not experts in the development of corporate strategy. The nature of what we do, however, means that we see a wide variety of corporate strategies across the government, NFP and commercial sectors. Having reviewed literally hundreds of strategies over the years, we’ve compiled a list of the most common issues associated with what is widely regarded as the most important of all corporate documents.
In the first instance, it’s important to look briefly at what a strategy is and why we bother developing one. The biggest problem with the way organisations think about strategy is they confuse strategy with plans (Forbes, 2017). This brings us to our most commonly identified strategy related issue…
Confusing ‘what we’re going to do’ with ‘how we’re going to do it’. Many (if not most) strategies are guilty of detailing implementation actions or plans where there should be strategic objectives. A prime example of this is ‘the people pillar’ present in many corporate strategies. There seems to be a fixation on referring directly to the workforce or ‘our people’ in these documents when, in reality, it simply isn’t necessary nor is it strategically correct. Whilst the notion of referring to the workforce in our strategy brings with it a ‘we care about our people’ flavor, what it does is delve too far into the realms of ‘implementation’. Caring about people is incredibly important, however, it is a notion best left to things like organisational values and behaviours. We must put strategy first – then develop the workforce to execute that strategy (The Differentiated Workforce, 2009).
Take the following objective as an example: ‘Develop and build a highly capable and engaged workforce’. Surprisingly these nine words exist (in roughly this order) in an alarming number of strategies. So what’s wrong here? Fundamentally, as a proposed objective, this doesn’t describe what we want to do achieve as an organisation. If you ask ‘why’ to a given objective and the answer is ‘to achieve one or more of your other objectives’ then your objective is more of an action or a response to a strategic objective rather than a strategic objective. In fact, most often, if the answer is anything other than ‘to deliver value to the customer’, ‘returns to shareholders’, ‘capital growth’, or ‘to support the realisation of our mission or purpose’ then again, its most likely what you have documented describes how you plan to implement the objective(s) and is not a strategic objective itself. Perhaps a good example of a people oriented strategic objective would go something like ‘Increase our training effectiveness ratio (revenue per dollar spent on training) by 25%’. If we asked ‘why’ to this objective then delivering ‘returns to shareholders’ and ‘capital growth’ are two obvious answers.
Most strategies are littered with ‘corporate gobbledygook’. As strategic workforce planners the first thing we do on any assignment is the strategy review. Sadly, the precursor to this strategy review is often the conversion of the strategic objectives to plain English. It’s not often we review a strategy document without reading at least one objective three times, scratching our respective heads and asking, ‘what on earth does that actually mean?’ It’s important to keep in mind that this document beats the drum to which your entire workforce will march. Why then do our executives often fail to consider the breadth of the audience during its development? The strategy should be able to be clearly understood by the entire workforce and unfortunately, is seldom written in that manner.
The socialisation of the strategy is often inadequate. I am yet to facilitate a Strategic Workforce Planning training course in which at least one person acknowledges they cannot easily access their organisation’s strategy or has no idea where it is. In fact, the number of attendees through the doors of the Workforce Planning Institute whose organisation has no strategy altogether is staggering. The strategy is the one document that ties our whole workforce together, the one common thread and the document from which every other plan, action or initiative should cascade. Why then do we so often fail to socialise it, make it impossible to find or neglect to positively reinforce it at every opportunity?
Too many ‘high level’ documents feel like a strategy. If not having a strategy is surprisingly common, organisations having too many strategic documents and/or cross over between strategic documents is all the more prevalent. As you might expect, this often causes widespread confusion. In the corporate sector, often ‘departments’ or even ‘teams’ seem to need their own strategy. This is most often a case of the naming convention gone wrong however ideally, the organisation has a strategy whilst departments such as HR, IT, Finance etc have plans that operationalise that strategy which detail how that department will support it. It is, however, inaccurate to refer to these plans as strategies. Often, employees from government departments, where the existence of documents such as white papers, policies and many other work plans is rife, complain of a lack of clarity as to which document they should be following leading to confusion, duplication and ultimately disengagement.
A strategy, regardless of the nature of the organisation, should be four things. Firstly, it needs to be strategic. It can’t afford to confuse operationalising the strategy with the strategy itself. Secondly, it needs to be clear and concise so the entire organisation can effectively follow it and therefore buy in to it. Documents written by executives, for executives will only ever captivate… executives. Thirdly, it needs to be readily accessible to the entire organisation and reinforced positively at every opportunity. Finally, avoid duplication, crossover and confusion. Your strategy shouldn’t look like a Venn diagram… there can be only one!