Introduction
Strategy has been having a wonderful run for management's money. Once, strategy was the somewhat arcane province of long-range corporate planners. Now senior managers themselves read the strategic gurus, arrange and attend seminars on strategy and generally add to the torrent of words on the subject. Many of them also take strategic action - though consultant Ben Tregoe is undoubtedly right in comparing strategy to sex: 'when all is said and done, more is said than done.'
In comparison, tactics are the opposite: plenty is done, but little is said. The implication is that strategy is the superior mental and managerial activity: tactics can safely be left to the lower orders. In fact, that notion is doubly wrong. First, the more people below board level are involved in framing strategy, the better its content and execution are likely to be. Second, no strategy can be better than its tactical execution. Yet one highly intelligent consultant, working on a book on top management's strategic role, has been rebuked by friendly advisers for confusing strategy with tactics.
The definitions make his critics' error clear. Strategy is 'any long-term plan', which will be the product of 'the art of conducting a campaign and maneuvering an army.' Tactics are 'purposeful procedure' achieved by exercising 'the science or art of maneuvering in presence of the enemy'. The two are as close as Siamese twins. Companies need the twin skills - those of the strategist, who can select the right long-term objectives and envisage the means that will reach those goals: and those of the tactician, who will deploy those means in a series of maneuvering - short, medium and long-term - to achieve.
SIXTEEN SUPER-POLICIES
The difficulty in separating the twain, though, emerges clearly from 'a compilation from latest writings and statements by Peter Drucker, Tom Peters, Gary Hamel, C. K. Prahalad, Michael Hammer, Rosabeth Moss Kanter, Richard Pascale and a few less known gurus.' The compiler is Michael J. Kami, no mean guru himself, and once chief strategic planner for both IBM and Xerox in their glory years. He believes that 'despite different styles, semantics and personalities, there's an unmistakable consensus about the new road to success for a business enterprise.' The 'key strategic policies for future success', with my commentary attached, are...
1. Forget the past. In the immortal words of Sheridan's Mrs Malaprop, which I've often quoted, 'We must not anticipate the past' - but most managements persist in the belief that the past will be the future. It won't. The past offers valuable guidance - but strategy derives far more benefit from full and proper understanding of the present - which is the explanation of Peter Drucker's remarkably accurate record as a seer.
2. Think global. With the exception of the US, no domestic market is big enough to support large strategic ambitions - and even Americans, now that boundaries are becoming meaningless, are well advised to look beyond their own shores to world markets.
3. Internal change must be drastic. Why do companies like Philips and the old IBM go through shake-up after shake-up without making enough forward progress? In Kami's words, 'One needs transformation, not reformation.' That's what you would seek in crisis: act radically now, and there won't be a crisis.
4. Base your business on knowledge and information, not things. Increasingly every business faces across the board the same challenge that confronts purchasers of IT equipment. You know that your state-of-the-art purchase will be out-of-date before the system is bedded in. Extracting value from fixed assets depends on the mobile assets of people and intellectual capital.
5. Create an information-based organization. Very few firms have taken the Great Leap Forward into the wired world. Found your strategy on a substructure of information and communication systems that meet both present and future needs - for all employees, suppliers and customers.
6. Concentrate on core competencies in your businesses. This is the Hamel-Prahalad thesis. My question is simple: 'What are we really good at?' Having established that, make sure you're not just good, but the very best at the activities that really drive your business.
7. Reduce organizational levels. Remember James Champy's ideal - an organization with three layers: top management, executive management, and all the self-managers below, aided by expertise managers. Can you justify any further layers? If not, axe them.
8. Empower your employees. Thinking Managers has many times pointed to the superior value created by devolving authority to individuals and teams which have the resources to take decisions and responsibility. It's plainly the only sensible way to manage managers: it's also by far the best way for them to manage others.
9. Provide continuous, lifelong self-improvement programmes. Sun Life, the British insurer, has an open learning facility at its Bristol headquarters. The better educated you and your people are - not just in necessary expertise, but in thinking, reading and learning skills - the better your business will be managed.
10. Manage talent. Attracting, motivating and retaining the best people you can find is fundamental. Remember, however, they are only as good as their environment, their development and their powers (see 8 above).
11. Practice global benchmarking. On all significant activities, is the company as good as or better than the best examples inside or outside the industry, anywhere in the world? If the answer isn't known, opportunities for great improvement are going begging.
12. Consider re-engineering. The word is only a newish phrase for the old essential of studying processes from start to finish with the aim of saving time and money and raising effectiveness. Drop superfluous processes and parts of processes, and redesign from scratch if that's the best solution.
13. Redefine quality standards. This applies to processes, products and services alike. However admirable performance may be, it can always be improved.
14. Create partnerships. Kami applies this principle to external relationships with 'marketeers, suppliers, distributors, subcontractors throughout the globe.' I would extend partnership internally - ensuring that people form teams and alliances within the business.
15. Compress time. The faster, the cheaper - other things being equal. Rapid decisions are generally better than delayed ones - and always better than procrastination. Shorter cycle times are money in the bank.
16. Act outside-in. Don't look at the business with the eyes of an insider. How do outsiders - above all customers and suppliers - regard the company? What would a man from Mars conclude and recommend after surveying the business with his fresh, unprejudiced eyes?
The last principle is one foundation of my consultancy work with Strategic Retail Identity: the major addition being that SRI also interviews insiders at all levels to establish the total perception of the company. But this work, while intensely revealing, isn't strategic in itself. The research sets the framework for strategy by establishing where the company is now and comparing this actuality with management's ambitions for the future.
Powerful policy recommendations spring from the results. But all Kami's 'key strategic policies' have the same stamp. The gurus are advising on what stance to adopt; but none of the sixteen points, all of which are of great value, will actually win you advantage in the marketplace. True, if you adopt the reverse policies, that advantage is virtually ruled out. Try living in the past, relying on domestic markets and avoiding revolutionary change in a production-oriented business that lacks up-to-date IT - it's a wonderful recipe for failure.
