Q: What’s the first job in every business step change process? In my experience it’s to design a strategy that will deliver the outcomes the owners desire. Many businesses, for whatever reason, do not have a clear strategy. Terry Bramall the original owner of Keepmoat the construction group said, “If accountants were smarter they could have put our strategy on the balance sheet because it was a real asset”.
In this blog I want to focus on some of the lessons I have learned over 35 years. However, I don’t want to cover the mechanics of designing a strategy but the more difficult task of implementing one successfully. So here goes.
I have found that its helpful to start with an end game in mind e.g. to be in a financial position in X years to have options; Sale of the business, IPO, MBO, acquisition etc or £100m sales and £10m profit in X years. This provides a real focus for the strategy exercise.
Good strategies seek to balance the interests of customers, employees and investors. When these three key stakeholder’s interests are served they normally buy into and support the strategy.
It is obviously critical to get buy in from all the key people who need to help deliver the strategy. Greg Dyke when he took over at the BBC went around the organisation and held small group Q and A sessions and was prepared to answer any questions his people had on any subject. This process whilst taking a lot of time got real buy in and commitment to the strategy. Contrast Greg’s approach with a newly appointed CEO of a bank who made a 15-minute video of himself talking about his beliefs, his ideas and how his brilliant strategy would transform the bank. Q Which CEO would you get behind? If the strategy is communicated in the right way then there is usually a feeling that the business has a real purpose, its on an important journey and people become enthusiastic about being part of it.
Year 1 in the implementation process is about laying the foundations so the longer-term strategy can be achieved. The challenge is to identify the 3 priorities to be addressed in year 1. 3 things are doable 27 are not! Typically, the issues are: getting the right people in the key roles, exiting loss making products or markets, installing better controls or using a Runner to cut costs and become more efficient. Clearly the 3 issues vary from business to business. Once the 3 issues start being addressed this reinforces the positive feeling that the business is going places and it might get there. Eureka!
One challenge that all businesses looking to grow and develop seem to face is making the time to work ON the businesses; improving its processes and developing the people, as well as working IN it. A key process here is Letting go to Grow. This is people delegating parts of their role to others to allow them time and space to work ON the business. If they have got the right people on the bus, who they trust, this is not normally a problem.
A key part of delivering a strategy successfully I have found to be changing or building a culture that serves the strategy. You get culture either by design (one you want) or by default (one you don’t want!) Culture can be designed by agreeing, sharing, championing and making non-negotiable a set of values that serve the business e.g. Delighting Customers, treating people with dignity and respect, taking responsibility for results, safe working etc. If the values are shared with and explained to people in the right way the majority buy into them. The process is really helped when senior managers live buy them and act as role models.
If a strategy calls for a major transformation in part of a business’s performance, then a very powerful process is to ask: Who does this best in the world, in other words is really good at it? Then go and learn from them. When Keepmoat, was looking to radically improve its buying processes it asked the question and discovered that Asda were outstanding. So, they learned from Asda and as result dramatically improved their buying performance.
A key lesson is that strategy progress review meetings should be kept clear of board and management meetings, because current business issues will always take priority and the strategy discussions will take a back seat.
Finally, I have discovered that the businesses that I have worked with who implemented a winning strategy also had fun along the way. People enjoyed each other’s company and respected each other. There were few silos or blaming others. Most leaders were humble with few big egos, they created a hard-working family culture. As the song goes” its not what you do it’s the way that you do it that’s what gets result”