Tag Archives: strategic leadership

Lean Management and Strategic Leadership

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Lean management and strategic leadership are irrevocably interrelated.

McKinsey defines Lean Management as having four disciplines:

  • delivering value efficiently to the customer
  • enabling people to lead and contribute to their fullest potential
  • discovering better ways of working
  • connecting strategy, goals, and meaningful purpose

We define Strategic Leadership as:

  • Strategic leadership engages people in creative thinking, planning and execution to most effectively accomplish the vision.

In these two definitions

  • “delivering value efficiently” relates to “most effective accomplishment…”
  • “enabling people to lead and contribute” relates to “engaging people”
  • “discovering better ways” relates to “creative thinking, planning and execution”
  • “connecting strategy, goals and meaningful purpose” relates to “execution to … accomplish the vision”

I know that we did not have this correlation in mind when we defined strategic leadership, but the parallels impress me. This tells me that if we want strategic leadership, we can learn a lot from those who area teaching and leading lean management.

As we start our planning cycle for the year, a couple of things that really stand out to me from lean management are:

  • planning is devolved to the front line, not Area, National and Team leaders
  • better ways of doing things are discussed, rather than extending our work from last year’s practices

I recommend the following further reading on lean management:

McKinsey’s Insight introduction article to lean management

McKinsey’s detailed paper on lean management

Leading Strategically With Information

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It is not possible to lead strategically by our definition without leading with information. That may mean that we have to collect, process and analyze a lot of data as part of our leadership. However, it may also mean that our role as leadership coaches is to ask questions that cause the team members to do the collecting, processing and analysis. In this case, our role is to ensure that the team has done this work, not necessarily to deal with the numbers ourselves.

Possible questions that we can ask to ensure that our teams are using information to lead strategically:

  • What is your goal in numerical terms? Where are you now in those terms?
  • What rate of progress are you making to date towards your goal?
  • Are you on track to meet your goal given where you are now, and the rate of progress that you are making to date?
  • What are the different alternative routes to reach your goal, and how does the rate of progress towards the goal differ for each of those alternatives?
  • Show me that you are making the most effective progress towards your goal.

Actual Results From Focusing On Strategy

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This year we saw actual positive results from focusing on our strategy.

For the first time in 3 years we have seen an increase in the number of countries with new spiritual movements launched. This is the outcome from our Mission, and directly leads us towards our Vision. I do not believe that this has happened by accident, but that it is the result of 3 years of focus on one thing by senior leadership across about 170 countries.

Key lessons I learned from this success:

  • Focus on one thing.
  • For years and years.
  • Don’t change the focus, and don’t change the rules. People can’t keep up with our ability to create change.
  • Keep it simple – both the strategy, and the process for turning the strategy into something that people can execute day to day.
  • Be consistent in messaging world-wide.
  • Review progress frequently (we aimed at bi-weekly, but we probably ended up with monthly).
  • Don’t allow your ability to think of new things to do distract you from the most important one thing.
  • Don’t let up. I had an old boss who used to say “Don’t let them grind you down!”, although he used an expletive before the object of the sentiment to reinforce the point.
  • Public accountability keeps even independent minded people focused on group goals.

I have been writing this blog now for nearly 2 years as I have been trying to figure out how to help 16,000 people spread across nearly 170 countries lead strategically. I hope that the fact that we have seen some success encourages you to stick to the strategy and use the strategic planning process to keep focused on the long term goal.

Overseeing Implementation Of Strategies

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Over the last 2 months I’ve received the national plans or national objectives from 70 different countries for our organization, along with plans from 11 regional leadership teams. This is a record for us. So, what next?

These plans vary from a summary of the philosophy of their work, to short list of objectives, through lists of key action items, to comprehensive lists of key actions with dates, resources and finances allocated. However, the important thing is not the plan, but the execution of the plan.

So, if you are a leader, how are you going to ensure that the plan gets executed?

Different teams are taking different approaches, for example:

  • Some teams have taken a “4 Disciplines of Execution” approach, with weekly reviews of lead measurements, lag measurements, and actions.
  • Other teams are holding bi-weekly reviews of progress towards targets.
  • Other teams plan to hold monthly reviews of completion of actions, and progress towards goals.
  • Other teams will review widely accessible dashboards.

The important thing is that progress is being monitored, and if insufficient progress is being made, that corrective action is taken. A long time ago I shared that I thought the hardest question that a leader can ask someone who is working with them is: Show me that you are making the most effective progress towards your goal. The implications of this being asked by a leader are that the leader will listen to an answer from time to time to see this “most effective progress”.

So, have you:

  • allocated regular time in your calendar to review progress against the plan in the coming year;
  • made this the priority in your calendar so that it does not get usurped by the urgent;
  • figured out how you are going to do this when you are travelling or otherwise away from your normal routine;
  • made sure that the team executing the plan has allocated time to review its progress with you over the coming year?

Are your Goals Outcomes or just Actions?

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Goals should be the desired result or change that you want to see effected by a strategy. Often, when reviewing plans, we see goals that describe actions that people think that they should take.

There is a very important difference between these two types of goals, If your goal is an action that you take, then when you take the action, you have achieved the goal, regardless of the results of the action. However, a better goal would be one that describes the desired result. Actions can then be taken, but if the actions are not having the desired effect, then you can change the action to one that does have the desired effect.

The process of setting goals, and measuring progress, according to the desired effects, rather than the actions taken to get those effects, is called Outcome Based Thinking. The idea is to focus measurement of progress on the Outcome rather than the action.

Typical actions that I see set as objectives in plans include:

  • arrange a conference
  • provide training
  • hold coaching sessions
  • develop new products

Better objectives that are described as outcomes might be things like:

  • 1000 new people are exposed to our messages
  • 100% of our staff are fully funded
  • 100% of our staff are working to objectives agreed in job descriptions
  • 80% of the population in a newly identified demographic group can see what we do in a locally understandable manner

The latter are descriptions of what results we want to see (the outcomes) and the former are actions that may, or may not, lead to some of those desired outcomes.

We originally defined strategic leadership as “engaging people in creative thinking, planning and execution to most effectively accomplish the vision”.

If we set action oriented objectives then we are defining how the objectives are to be met, which removes the ability of our staff to think,  plan and execute creatively. Give your staff flexibility to do their work – set objectives that allow creativity in the solution taken to achieve them.

This all sounds really simple but, in an action oriented working culture like ours, it goes against the grain, and we have to consciously work against our instincts.

A presentation that someone else created, but which I have used to explain this further, can be found here.

Really Thought Provoking Definition of Strategy

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Professor Henry Mintzberg defined strategy as “a pattern in a stream of decisions”. This helps us better understand how decisions relate to strategy. This phrase is easy to remember but it may take years to fully grasp its point. Mintzberg’s cryptic statement can be understood as an approach to decisions in two steps:

Firstly, there is the overall decision – the big choice – that guides all other decisions. To make a big choice, we need to decide who we focus on – our target client segment – and we need to decide how we offer unique value to the customers in our chosen segment. This is basic strategy stuff but, by formulating it this way, we can better understand the second part, the day-to-day decisions – the small choices – that get us closer to the finish line. When these small choices are in line with the big choice, you get a Mintzberg Pattern.

Condensed from Strategy Magazine, Issue 31 Page 31

So, we conclude that strategy is not just about deciding the important macro-direction to take, but a way of enabling all members of the organization to determine what they should or should not do. There are corollaries to this conclusion, so maybe further blog entries….

Comments welcome.

Really Useful Website of Strategic Management Tools

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The following website has a lot of really useful tools for Strategic Management / Leadership:

http://www.quickmba.com/strategy/

Everything from planning processes to analysis tools to summaries of the best theories.

Check it out.

Lead With No Data, Or Lead With Bad Data?

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What do you do if you need data to make leadership decisions, but your in-house systems don’t have perfect data?

This was a question with which the team in which I work wrestled last week.

An answer can be found here. The  bottom lines are this:

  1. Trying to make leadership decisions based upon incomplete data is probably better than trying to make them using no data at all.
  2. If you make decisions based upon imperfect data that affects the people who provided you with the data, then the people who provided the data will improve its accuracy for future decision making.

One of the most senior managers in our organization reinforced this in a story he told me last year. As a regional leader he wanted to allocate funds within the organization. He knew that the data describing the parts of the organization under his authority was not reliable. But, the data represented, was collected, and was entered into the database by the staff who worked for him. He used this (unreliable) data anyway, and allocated funds according to it. People complained. However, the completeness of the data entered into the database increased dramatically. The next year, the appropriate data was available to make good decisions that everyone knew were fair.

So, in conclusion, when leading strategically to cause an organization to most effectively accomplish a vision use the data you have rather then ignore it because it is not perfect.

What’s the Point of a SWOT Analysis?

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We’ve all completed SWOT analyses in our time. But why?

Well, the idea is that the strategic plan is actually affected by what the SWOT analysis uncovers. It’s really simple. I’ve read a lot of plans that include a SWOT analysis that highlight all sorts of interesting looking opportunities and threats, and then the strategy seems to completely ignore them.

The idea of the SWOT analysis is that it identifies:

  • Strengths – that the strategic plan then builds upon in an identifiable way.
  • Weaknesses – that the strategic plan then corrects or circumvents in an identifiable way.
  • Opportunities – that the strategic plan recognizes in an identifiable way, and then shows upon how they are capitalized.
  • Threats – that the strategic plan circumvents or mitigates in a recognizable manner.

Let’s look a couple of examples.

  1. If the SWOT analysis identifies that “lack of staff”  is a major weakness, then the strategic plan should include a line item that makes direct reference to how staff will be recruited, or how additional staff are not needed. I would certainly expect there to be a direct reference to the word “staff” and it’s level in the plan.
  2. If the SWOT analysis shows that an upcoming conference is a major opportunity, then the strategic plan should refer to that conference by name, and explain (albeit in one or two sentences possibly) how that conference would be used to achieve the maximum amount of progress towards the goal of the organization.

If a SWOT analysis is not directly used to influence the strategic plan, then don’t waste the time to generate it. Instead of having a one hour brainstorming meeting of your 6 most valuable team members, have them go do something else that will directly contribute to the goal of the organization – you’ll be 6 man hours of good stewardship ahead. However, if you use those 6 man hours to identify ways to create thousands of man hours move value, and you actually do something with those ideas then you will be leading strategically.

Rich Howarth’s view on Annual vs. Continuous Strategy Assessment

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Strategic leadership is a continuous approach to leadership. It is not annual strategic planning. In his book “Deep Dive” Rich Howarth describes the pitfalls of purely annual strategy reviews.

He puts it like this:

The inability to understand context is at the heart of numerous failures. There are three pitfalls of context to avoid if you are to be successful: (1) annual assessment, (2) relative versus absolute performance, and (3) prescription without diagnosis.

He then says the following about annual assessments:

From a business-planning perspective, context is often expressed as the “situational analysis.” The problem with this is that business planning generally happens once a year in most organizations, if that (nearly 40 percent of organizations have no formal business-planning process). This means that the majority of managers don’t have a solid understanding of the context of their business. This is like attempting to map out driving directions to a destination without knowing whence the car is leaving. It’s the “You Are Here” map at the museum minus the big red dot to indicate where you are. Niccolo Machiavelli wrote the following in The Prince: “I have often reflected that the causes of the successes or failures of men are dependent on their ability to suit their manner to the times.” And, as they say, “The times, they are a-changing”— usually more than once a year.

Howarth goes on to describe three tools that we can use to ensure that we remain connected to the context in which we are trying to set and implement a strategy. The first he describes as follows:

Strategy Tune-up Sessions Those who drive a car every day wouldn’t dream of going an entire year without a tune-up to check fluid levels, gauge tire pressure, change the oil, replace filters, etc. Nevertheless, while we regularly check our $ 35,000 automobiles, we wait a full year (and sometimes longer) to do a diagnostic check on our multimillion- or multibillion-dollar businesses. Now that makes sense! A simple solution is to conduct periodic (weekly, monthly, or quarterly) strategy tune-ups to check on the context of the business. The focus of these sessions isn’t to arrive at new conclusions; rather, it’s to openly discuss the four areas that constitute the context of the business: market, customers, competitors, and the company. The goal is to find changes in the context of the business and use the resulting insights to leverage opportunities and to blunt threats in a timely manner. Honda has used this technique (called “Nimawashi sessions” in Japan) with great success as one of the pillars of its strategic action plans.

Horwath, Rich (2009-08-01). Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources, and Taking Smart Action. Greenleaf Book Group Press.

Do you disagree with him? If so, then leave a message and tell us all.