The idea of strategy is simple; it's your plan of action and a decision-making framework to achieve your vision.
Even though it's simple, developing and executing a strategy is hard.
I have learned a great deal about winning strategies, losing strategies and taking on too much. I love ideas and trying new things, but when the opportunities in front of you are endless, this combination can be dangerous. Having been accused of liking shiny objects -- a label I hate, probably because there is some truth to it - I have figured out the value of focus.
When I came to StoneAge almost 15 years ago, the strategy was simple but effective. I executed this strategy successfully during my first few years as CEO. Still, I could see that the desire for automation and robotics was going to disrupt our industry. To stay relevant, we would have to change.
At the end of 2013, my fourth year as CEO, we decided to broaden our product offerings and develop automated equipment for industrial cleaning applications. I immediately got myself into trouble. Why? Because I tried to use the old strategy with a much more complex and service-intensive product line.
Being a new and young CEO, I didn't really "get" strategy. I didn't know how to analyze business models, nor did I understand the ramifications of undisciplined planning. I equated strategy with ideas, ambition and visionary leadership. At the time, I had no idea how to formulate an effective, cohesive strategy.
My journey is one to learn from. While we were successful in the end, we made many mistakes along the way. Here is what I learned:
- Create a vision of where you want to go: Having a vision is foundational in creating success. A clear, well-articulated vision gives you direction and a larger purpose. It gives you the inspiration to work hard and be disciplined. A vision allows you to create your definition of success and set proper expectations for what you want to accomplish.
- Describe the problem you are trying to solve: As Richard Rumeltstate wrote in his book, "Good Strategy Bad Strategy: The Difference and Why It Matters," "The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions on dealing with those factors."
You must diagnose the situation before you formulate a plan. It's hard to distill a vision and problem statement into a few sentences, but it's the only way to create a simple plan everyone can follow.
- Tie your vision to the day-to-day: A high-level vision is the starting point, but you have to tie it to the day-to-day work that people do. I once had an employee tell me, "Strategy is a management thing. My team does the real work." This is how most people feel about strategy, and it's a problem. Every person on your team needs to understand the strategy and how the work he or she does ties to it.
- Create and segment initiatives: I dislike annual planning meetings; they can be a waste of time. A strategy is constantly evolving, and there is no endgame. We set major initiatives and then short-term goals for each segment. Some might be short-term and others are multiyear initiatives, and the executive team reviews our progress biweekly and adjusts our plan as we go. Your strategic planning process should be a rolling one.
- Executive management commitments: Every major initiative should have an executive-level sponsor. Biweekly, each sponsor updates the executive team on progress and commits to the next steps. All issues should be on the table, including roadblocks, constraints, mistakes and communication breakdowns. This takes trust, commitment and open, candid dialog. But if done right, you can quickly solve problems and adjust before getting off track.
- Annual planning: Despite my feelings on annual planning, we do have a yearly one-day planning session, but it's more of a team-building activity than a full-blown, sit-at-a-whiteboard-and-plan kind of session. We talk about the big picture and debate what we got right during the year, what we got wrong and we make tweaks for the following year.
Many leaders confuse operational leadership with strategic leadership. Don't make this mistake.
For more information, contact Kerry Siggins at kerry.siggins@stoneagetools.com. To read her blog, visit www.kerrysiggins.com/blog.
