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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
- Veröffentlichungsjahr: 2023
Master the four disciplines of Strategic fitness essential to executive performance In Strategic, New York Times and Wall Street Journal bestselling author Rich Horwath delivers an incisive roadmap to help leaders at all levels think, plan, and act strategically to navigate every business challenge they face. The book offers business leaders a proven framework--the Strategic Fitness System--containing dozens of tools, techniques, and checklists to confidently master every area of the business, from designing market-winning strategies to shaping the organization's culture. The practical content will help executives in any industry improve what research has shown to be the most important leadership factor to an organization's future success--Strategic competence--and use this skill to transform complexity to clarity in charting their Strategic direction. The book features: * A common language for strategy and business planning * Practical tools for developing the four dimensions of executive fitness key to advancing the company's growth: strategy, leadership, organization, and communication * Techniques for designing enduring competitive advantage and frameworks for creating innovative new value for customers * Methods for evolving the business model to transform the trajectory of the business * The Strategic Quotient (SQ)--a validated assessment of an executive's Strategic thinking, planning, and execution With practical tools and dozens of real-world examples, readers of Strategic will immediately be able to set direction, create advantage, and achieve executive excellence. Be more than tactical--be Strategic.
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Dedication
Introduction
Navigate Your Business
Being Strategic
The Unstrategic
Strategic Fitness
What's Your Strategic Quotient (SQ)?
Trail Blazes
Notes
PART I: Strategy Fitness
CHAPTER 1: Strategy
Strategy Is Not …
GOST Framework
Strategy Defined
When to Change Strategy
3A Strategic Framework
Strategy Development
Designing a StrategyPrint
Trail Blazes
Notes
CHAPTER 2: Resource Allocation
Reallocation of Resources
Discipline to Focus
Making Trade‐offs
Trail Blazes
Notes
CHAPTER 3: Decision Making
Creating Decision Trees
Avoiding Decision Traps
Determining Decision Rights
Delegation: Lead at Your Level
Trail Blazes
Notes
CHAPTER 4: Competition
Assessing the Competition
Competitive Positioning
Learning to Differentiate
Understanding Competitive Advantage
Trail Blazes
Notes
PART II: Leadership Fitness
CHAPTER 5: Leadership
Situational Awareness
Emotional Intelligence
Leadership Philosophy
Trail Blazes
Notes
CHAPTER 6: Personal Performance
Three Principles of Preparation
Energy Management
Executive Presence
Trail Blazes
Notes
CHAPTER 7: Mental Toughness
Seven Saboteurs of the Mind
Mental Training Techniques
Nonjudgmental Observation
Breaking the Judgment Habit
Trail Blazes
Notes
CHAPTER 8: Time and Calendar
Eliminating Time Traps
Three Ways to Monotask
Optimizing Email
Trail Blazes
Notes
PART III: Organization Fitness
CHAPTER 9: Organizational Foundation
Organizational Structures
Purpose
Mission
Vision
Values
Culture
Internal Obstacles
Trail Blazes
Notes
CHAPTER 10: Business Model
Evolving Your Business Model
Creating a Value Proposition
Mapping a Value Chain
Designing the Future State
Trail Blazes
Notes
CHAPTER 11: Talent and Succession
Talent Scorecard
Five Talent Traps
Succession Planning
Trail Blazes
Notes
CHAPTER 12: Innovation
Insight
Solving Challenges
Biomimicry
Domain Jumping
Catalyzing Questions
Trail Blazes
Notes
PART IV: Communication Fitness
CHAPTER 13: Strategy Conversations
Dialogue
Discussion
Direction
Trail Blazes
Notes
CHAPTER 14: Collaboration
Enhancing Collaboration
Facilitation Framework
Trail Blazes
Notes
CHAPTER 15: Customers
Internal Customers
One‐on‐Ones
Managing Up and Laterally
External Customers
Board of Directors
Trail Blazes
Notes
CHAPTER 16: Meetings
Strategic Meeting Framework
Strategic Approach to Meetings
Trail Blazes
Notes
Close
Are You Tactical or Strategic?
What's Your SQ?
The Strategic Fitness System
About the Author
Index
End User License Agreement
List of Tables
Introduction
Table l.1 Primary and Secondary Dimensions of the Strategic Quotient.
Table l.2 SQ Assessment Sample.
Chapter 10
Table 10.1 Downstream Growth Grid.
Chapter 11
Table 11.1 Talent Scorecard.
Table 11.2 Difference Maker Roles.
Table 11.3 Quantitative Candidate Comparison.
Chapter 15
Table 15.1 Customer Assessment.
Table 15.2 Customer Goal Assessment.
List of Illustrations
Introduction
Figure I.1 Strategic Fitness System.
Chapter 1
Figure 1.1 GOST Framework.
Figure 1.2 The 3A Strategic Framework.
Chapter 3
Figure 3.1 Decision Tree Construct.
Figure 3.2 Decision Tree Example.
Figure 3.3 Delegation Action Plan.
Chapter 5
Figure 5.1 Contextual Radar.
Chapter 8
Figure 8.1 Time Investment Graph.
Chapter 10
Figure 10.1 Value Chain: Healthcare Industry.
Figure 10.2 Value Chain: Uber.
Figure 10.3 Scenarios and Contingency Plans Example.
Chapter 13
Figure 13.1 Strategy Conversation Gear.
Figure 13.2 Strategy Conversation Framework.
Chapter 15
Figure 15.1 Customer Goal Matrix.
Chapter 16
Figure 16.1 Strategic Meeting Framework.
Guide
Cover Page
Title Page
Copyright
Dedication
Table of Contents
Begin Reading
CLOSE
Are You Tactical or Strategic?
About the Author
Index
Wiley End User License Agreement
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From the New York Times and Wall Street Journal Bestselling Author on Strategic Thinking
STRATEGIC
THE SKILL TO SET DIRECTION, CREATE ADVANTAGE, AND ACHIEVE EXECUTIVE EXCELLENCE
RICH HORWATH
Copyright © 2024 by Rich Horwath. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per‐copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750‐8400, fax (978) 750‐4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748‐6011, fax (201) 748‐6008, or online at http://www.wiley.com/go/permission.
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Library of Congress Cataloging‐in‐Publication Data is Available:
ISBN 9781394215331 (Cloth)
ISBN 9781394215348 (ePub)
ISBN 9781394215355 (ePDF)
Cover Design: Wiley
Cover Images: Compass Rose © warmworld / Adobe Stock; Contour Map © Olga Kurbatova / Getty Images
Author Photo: © Aaron Gang
To the leaders I have been blessed to work with, learn from, and laugh with—your insights form the foundation of this story.
INTRODUCTION
“Cloudy weather, cloudy.”
The Lockheed Electra plane flew through the overcast sky under a blanket of rain, having already traveled more than 22,000 miles of the planned 29,000‐mile journey.
“KHAQQ calling Itasca. We must be on you, but we cannot see you. Fuel is running low. Been unable to reach you by radio. We are flying at 1,000 feet.”
The U.S. Coast Guard cutter Itasca was stationed just offshore of Howland Island, a whisper of land 1.5 miles long by .5 miles wide in the South Pacific, approximately 2,000 miles southwest of Hawaii.
“KHAQQ calling Itasca. We received your signals but unable to get a minimum. Please take bearing on us and answer 3105 with voice.”
The U.S. Coast Guard cutter Itasca attempted to get a bearing on the transmission and failed.
“KHAQQ to Itasca, we are on the line 157 337, will repeat message, we will repeat this on 6210 KCS. Wait. We are running north and south.”1
Silence.
The two pilots aboard the aircraft were never heard from again.
Or were they?
A day later in Rock Springs, Wyoming, 16‐year old Dana Randolph was tuned in to a shortwave band of his parent's radio and reported hearing a woman say, “This is Amelia Earhart. Ship on reef south of the equator. Station KHAQQ.”2
The same day in St. Petersburg, Florida, 15‐year‐old Betty Klenck was also tuned into her family's radio shortwave band. She reported hearing a woman, sounding in distress, say, “This is Amelia Earhart.”3
The most extensive air and sea search in naval history, covering 250,000 square miles of ocean, found … nothing.
On May 20, 1937, Amelia Earhart departed from Oakland, California, with Fred Noonan, in an attempt to become the first woman to fly around the world. Over the course of more than six weeks, they followed a route that included 28 stops in exotic locales such as Caripito, Venezuela; Natal, Brazil; Asaab, Ethiopia; Bangkok, Thailand; Bandoeng, Java (Indonesia); Darwin, Australia; and Lae Papau, New Guinea. They were scheduled to stop on Howland Island to refuel and complete the trip by flying to Honolulu and then returning to Oakland, California. Just prior to her final flight from New Guinea, Earhart said, “Not much more than a month ago, I was on the other shore of the Pacific, looking westward. This evening, I looked eastward over the Pacific. In those fast‐moving days, which have intervened, the whole width of the world has passed behind us, except this broad ocean. I shall be glad when we have the hazards of its navigation behind us.”4
Those last words, “the hazards of its navigation,” are eerily prophetic. What few people know is that shortly before her fateful trip, she received the following letter from world‐renowned navigation author, inventor, and instructor P.V.H. Weems:5
May 14, 1937
MISS AMELIA EARHART
c/o G.P. Putnam
2 W. 45th ST. NEW YORK, N.Y.
Dear Miss Earhart:
In case you could find time to come to Annapolis for a few weeks intensive work in celestial navigation, I believe you would be well re‐paid for the efforts. I have just had Miss Amy Johnson here for two weeks. She did beautiful work and seems to be more than pleased with the results.
As I see the picture, both of you ladies are in the flying game of your life‐time work. Aside from piloting, about which there is no question of your both having a great deal of ability, the only important contribution you can make to a flight is the ability to see the direct course as not to miss the objective.
As both of you know a great deal about dead‐reckoning and radio, I recommend that you make a special effort to perfect yourself, not only in radio including the Morse Code, but also in celestial navigation, since radio and celestial navigation afford the only means for fixing your position above the cloud or over the water ….
I further believe you would save a great deal of expense and perhaps worry by practicing until you could lay out your own charts and do your own navigation all the way through. You can then take any reasonably dependable co‐pilot with you and be sure of hitting your objective. In addition, it would give you a great deal more confidence and you could keep your plans more confidential when necessary …
Yours sincerely,
P.V.H. WEEMS.
Amelia Earhart's disappearance remains a mystery to this day. Several theories have emerged as to what happened to her: she crash‐landed on the remote Gardner Island and died a castaway there; she landed in the Japanese‐held Marshall Islands where she was taken prisoner and transferred to the island of Saipan. Another theory holds that she was then released from the Japanese island and repatriated to the United States under an assumed name. The U.S. government's official explanation was that the plane ran out of fuel and fell into the ocean.6 While no proof of Earhart's true fate has been confirmed, and each of these theories has been disputed, what is indisputable is that she will be remembered as a courageous visionary with an indomitable spirit.
Earhart was a pioneer and trailblazer in aviation and a fearless role model for men and women alike. Her long list of achievements includes being the first woman to fly across the Atlantic Ocean, the first woman to fly solo across the Atlantic, the first woman to fly solo nonstop coast to coast, setting numerous speed records in domestic and international flights, published author, and recipient of awards including the National Geographic Society's gold medal from President Herbert Hoover, and the Distinguished Flying Cross awarded by the U.S. Congress.7 However, floating out there like the insidious cloud cover on that fateful day, the question remains: Would Amelia Earhart have completed her amazing journey around the world if she had taken P.V.H. Weems's offer to enhance her navigational skills?
Navigate Your Business
To navigate is to direct or manage something on its course—in other words, to control the movement from one place to another.8 To navigate means to determine one's position and direction and make a way over or through. Historically, the field of navigation is most prominent in air, sea, and space as the primary skill in successfully guiding planes, ships, and rockets to their intended destinations. More recently, the term “navigate” has been used in an array of contextual landscapes including politics, relationships, ecosystems, and business.
As Earhart's story demonstrates, the ability to navigate is critical to success. In Earhart's era, it was estimated that 50% of aircraft accidents were due to bad navigation. Navigational authority P.V.H. Weems noted, “Many flyers are really lost a good part of the time.”9
Today, research indicates that “human error contributes to 80% of navigational accidents and that in many cases essential information that could have prevented the accident was available to but not used by those responsible for the navigation of the vessels concerned.”10 The business corollary of this issue is exemplified in a 10‐year study of 103 companies that found that strategic blunders—the inability to navigate an organization's course—were the cause of the greatest loss of shareholder value a whopping 81% of the time.11
Whether you are navigating a vehicle or a business, it's imperative that you're able to effectively determine your current position and then set direction. A study of 250,000 executives showed that setting strategic direction is the most important role of a leader and the number‐one factor that improved organizational health.12 Despite the importance of leaders’ ability to set direction, research by Gallup over the past 30 years with more than 10 million managers found only 22% of employees strongly agreed that the leaders of their organization have set clear direction for the business.13
During my strategic executive coaching work the past 20 years, the issue of how to best navigate the business has become a recurring theme for many highly effective leaders, as the following direct quotations demonstrate:
“One issue I'm wrestling with is how best to navigate that with the team.”
“There are just some things that I don't know how to, I don't know how to navigate them.”
“That's what I want healthcare to be like. That's what my family wants. Yes, it's fragmented. It's confusing to know how to navigate it, and how are we going to solve that?”
“As our market becomes even more competitive with nontraditional players entering, I'm just trying to constructively navigate.”
When Disney brought back Bob Iger for his second stint as CEO, his return was described this way in the Wall Street Journal: “Walt Disney Co. has brought back the CEO responsible for its pivot to streaming. As he returns, Robert Iger has to navigate a competitive landscape that is far more challenging than when he left less than three years ago.”14
The navigational role of a leader was further described by Hilton CEO Chris Nassetta in the following manner: “I have a philosophy in life, and that is keeping a steady hand on the wheel. Have a plan and work the plan and adapt the plan. The plan needs to change. Let me use driving vernacular. I don't take every exit, but I will change lanes and I will take exits that really make sense. My longevity has been the ability to just sort of filter noise out and know when to take an exit occasionally, when to change lanes, but not doing it so often that everyone around you is rattled and they can't see what tomorrow is going to be.”15
The essential meta‐skill of a leader is to navigate their business with a thorough understanding of their current situation, vision to see the future destination, and the ability to create the path to reach it. When you have the knowledge, tools, and skills to navigate your business, it produces both competence and confidence. How then do you acquire, maintain, and grow the ability to successfully navigate your business, moving from your current position, over and through obstacles, to reach your goals?
It requires you to be strategic.
Being Strategic
The primary definition of the term “strategic,” according to Merriam‐Webster's dictionary, is: “of, relating to, or marked by strategy.”16 Since that's about as helpful as an umbrella in a hurricane, I'd like to share the following definition:
Strategic: Possessing insight that leads to advantage.
We can break this definition of strategic down into its two core elements: insight and advantage. An insight is when you combine two or more pieces of information or data in a unique way to come up with a new approach, new offering, or new solution that moves the business forward. Simply put, an insight is a learning that leads to new value. Advantage is inherently an element of strategy. It commonly refers to a desired end in the form of gain, profit, benefit, or position of superiority.
When we use this definition of strategic, it helps us clarify what is and is not strategic. A person or plan can be strategic because both have the potential to possess insight that leads to advantage. The word “strategic” is plastered in front of a lot of other words to make them sound important, but their meanings don't hold up. Phrases such as “strategic objective” or “strategic imperative” are examples of terms that sound proper but don't pass the test of being able to house and leverage learnings. Eliminate the overuse of the term “strategic” and you'll clarify and simplify communication among your team.
Here's something you'll never hear in business: “Let's promote her to a senior leadership role … she's highly tactical.” One of the greatest compliments a person can receive is to be referred to as “strategic.” A survey of 10,000 senior executives asked them to select the leadership behaviors most critical to their organization's future success and they chose “strategic” 97% of the time.17 Additional research with 60,000 managers and executives “found that a strategic approach to leadership was, on average, 10 times more important to the perception of effectiveness than other behaviors studied. It was twice as important as communication (the second most important behavior) and almost 50 times more important than hands‐on tactical behaviors.”18
Business leaders, academicians, and boards of directors echo these findings:
“To me, the single most important skill needed for any CEO today is strategic acuity.”
—Indra Nooyi, former CEO, Pepsi19
“After two decades of observation, it is clear that mastery of strategy is not an innate skill. Most great CEOs learn how to become better strategic thinkers.”
—David Yoffie, professor, Harvard Business School, and Michael Cusumano, professor, MIT Sloan School of Management20
“The #1 trait of active CEOs that makes them attractive board candidates is strategic expertise.”
—Corporate Board of Directors Survey21
“The No. 1 capability boards are looking for in a CEO: strategic capability.”
—Cathy Anterasian, Senior Partner, Spencer Stuart.22
As the research and thought leaders demonstrate, the importance of being strategic is universal. After all, who doesn't want to be seen as providing new value that leads to benefits, gains, or profits for their organization? For instance, label someone what many perceive as the opposite of strategic—tactical—and it won't be taken as a compliment. Another descriptor for the purely tactical is “unstrategic.”
The Unstrategic
In recent years, zombies have amassed in quantity and popularity, securing a place for the undead in the supernatural landscape. The zombie's doppelgänger in the business arena is the unstrategic. The unstrategic are those individuals unable to raise themselves from their tactical tombs to contribute to the business at a higher strategic level. You wouldn't tolerate a zombie attempting to eat Mark from finance during the staff meeting, yet the unstrategic can cause a similar—albeit less mortal—outcome for your team. Which of these three sins of the unstrategic are being committed in your organization?
Wandering aimlessly.
The undead wander the landscape aimlessly, attracted by loud noises and bright lights. The unstrategic lack direction, which causes them to latch onto each and every new shiny opportunity that pops up. Fundamentally, they lack priorities and the appropriate filters to keep them focused. As Cal Henderson, co‐founder of Slack, said, “What are the things that are the most strategically important, and am I allocating my time to them correctly? Am I spending the right percentage of my time on them? It's easy to get lost in the weeds.”
23
In my experience, facilitating strategy sessions with executive leadership teams to shape strategic direction, I've found it important to address two obvious but often obscured questions: 1) What are you trying to achieve? 2) How will you achieve it? Look at your most recent plan. Are these two questions answered immediately up front in the first slide or two? If not, there's a good chance the answers are buried in Excel spreadsheets or colorful graphs, and not known or recognized by the team. Research shows that when teams believe their leader is competent in setting good strategic direction, they are 40% more committed to successfully executing the strategy.24
Doing everything.
The undead lack the discipline to select just one victim—they try to eat everyone. The unstrategic lack the discipline to say no. They try to be all things to all customers, both internally and externally. When Mary Barra took the reigns as CEO of General Motors, she compared her new approach with that of the previous leaders by saying, “We're here to win. We aren't going to win by being all things to all people everywhere. It's not the right strategy.”
25
The dirty secret of being strategic is that you have to say no to people, both internally and externally. Managers need to be deliberately unresponsive to some types of customers so that they can be highly responsive to others where they can provide maximum appreciable value. The necessary role of trade‐offs in strategy is to intentionally make some customers unhappy by focusing resources in areas destined to provide the most value to the customers most willing to pay for it. If you fail to prioritize what's important, then nothing is important.
Killing meetings.
The undead continually utter gibberish due to their severely diminished brain activity. The unstrategic kill strategy meetings by taking conversations down rabbit holes, preventing progress, and causing widespread frustration among the other members of the group. Research has shown that executives spend an average of 21.5 hours per week in meetings, and a frightening 83% of executives said that these meetings are an unproductive use of time.
26
Why? It's often due to one or two members of the group who are unstrategic, taking the team off‐topic until people lose interest and become numb to the epic waste of time.
As a facilitator who has led hundreds of strategy sessions, I'd recommend several ways to address this issue. An effective preventative step is to educate the team on the difference between strategy and tactics, with examples of each. This helps people better understand which topics are strategic and which are tactical, enabling them to contribute appropriately. Another technique is to establish a “Tactical Parking Lot.” Playing off the parking lot flipchart concept, the tactical parking lot allows the facilitator to quickly move any rabbit‐hole tactical comments to the flipchart, resuming the group's strategic‐level conversation.
Strategic Fitness
Consider your business for a moment: What are the predominant market trends and patterns and the resulting impact on your business? How have customers’ thinking and actions changed during the past year? What type of nontraditional competitors are entering your market and what have your traditional competitors been doing to take your customers? Does your culture support your initiatives and are each and every functional group's strategies aligned? Do these answers make you want to reach for a bottle of aspirin? Wine? Scotch?
You're not alone.
A Gartner survey of 75 human resource leaders on how their managers were coping with their business found 68% reporting that they were overwhelmed. And only 14% of those companies have developed a plan to help their managers overcome the challenges of navigating their business.27 Running a business today can be likened to trying to put together a jigsaw puzzle where the sizes and shapes of the pieces are constantly changing, and oh, by the way, you don't have all the pieces, either.
A magnetic compass typically contains a small, magnetized needle and always points north due to its attraction to a large magnetic deposit near the North Pole. When you consider the many different instruments used in navigation, the magnetic compass is arguably the simplest and most reliable. Based on more than 25 years of helping executive leadership teams develop their strategic capabilities to set direction, create advantage, and achieve their goals, I created the Strategic Fitness System, as represented by a compass (Figure I.1) to help leaders navigate their business and enhance their executive performance.
Figure I.1 Strategic Fitness System.
There are four areas of strategic fitness that contribute to navigation and development: Strategy, Leadership, Organization, and Communication.
Strategy Fitness
refers to your ability to understand and develop strategy, set direction, allocate resources, make decisions, and create competitive advantage.
Leadership Fitness
is built on a leader's philosophy, personal performance, mental training, and ability to master time and calendar.
Organization Fitness
is determined by one's ability to create the appropriate business structure, evolve the business model, develop talent while planning for succession, and innovate.
Communication Fitness
revolves around the facilitation of conversations, effective collaboration, bringing value to customers, and leading productive meetings.
While simple in structure, each area contains dozens of tools, techniques, and checklists to give you a methodical and comprehensive approach to mastering your business. The result: the ability to think, plan, and act strategically to successfully navigate your business.
What's Your Strategic Quotient (SQ)?
To navigate means to determine one's position and direction and make a way over or through. It may be helpful as part of this journey to determine your current position as it relates to your strategic capabilities. One option I've designed to assist in this process is the Strategic Quotient Assessment. The Strategic Quotient (SQ) is a measure of a person's strategic capabilities as exhibited through their mindset and behaviors.
The SQ is based on the 3A Framework of the three critical disciplines for being strategic. These three disciplines are:
Acumen (Thinking): The generation of insights to create new value
Allocation (Planning): Focusing resources through strategic trade‐offs
Action (Acting): Prioritizing and executing initiatives
The SQ is used to identify opportunities for development of a person's strategic capabilities, and, following a targeted intervention, to determine whether the individual understands and applies the disciplines of Acumen, Allocation, and Action. A person's score on the SQ may indicate the likelihood they can successfully apply and demonstrate these strategic capabilities. Table I.1 identifies the foundational elements of the Strategic Quotient.
Table l.1 Primary and Secondary Dimensions of the Strategic Quotient.
ACUMEN(Thinking)
ALLOCATION(Planning)
ACTION(Acting)
Context
Resource Allocation
Collaboration
Insight
Decision Making
Execution
Innovation
Competition
Personal Performance
The SQ Assessment is comprised of 50 statements to determine the performance level of how one thinks, plans, and acts strategically. Table I.2 contains sample statements from the SQ Assessment.
For additional information on taking the assessment and discovering your SQ score, visit www.StrategySkills.com.
As you move through the book, you'll find several additional techniques to facilitate your understanding and application of the material:
Rocket Burn:
Due to the lack of atmosphere, a spacecraft coasts for the majority of its journey. Therefore, astronauts navigate at a few critical moments by setting their trajectory with precise burns of the rocket engines during the voyage. The rocket burns in this book will provide you with quick tips and techniques to successfully navigate your business and calibrate your learning trajectory.
Off Course:
To navigate is to manage something along its course. In navigating a ship or plane, challenges in the form of weather conditions, other crafts, and human error can hinder one from reaching their destination. In these sections, we'll identify issues to be aware of and mitigate in order to enhance your ability to navigate the business.
Trail Blazes:
Experienced hikers will recognize the term “blaze” as the most common type of trail marking to help guide one's adventure. Blazes are typically in the form of paint or carvings on trees along the trail. You'll discover a trail blaze page at the end of each chapter containing a summary of insights to ensure you're on the right path.
Ready? 3 … 2 … 1 … liftoff!
Table l.2 SQ Assessment Sample.
Never
Rarely
Sometimes
Often
Always
I record my assessment of the current business situation
I meet with colleagues from other areas to align on strategy
I update my business plan with new insights
I take time at the completion of projects to record key learnings
I schedule time in my calendar to think about the future of my business
Trail Blazes
To navigate means to determine one's position and direction and make a way over or through.
A study of 250,000 executives showed that setting strategic direction is the most important role of a leader and the number‐one factor that improved organizational health.
Strategic: Possessing insight that leads to advantage.
A survey of 10,000 senior executives asked them to select the leadership behaviors most critical to their organization's future success and they chose “strategic” 97% of the time.
The Unstrategic:
Wandering Aimlessly
Doing Everything
Killing Meetings
Four areas of Strategic Fitness:
Strategy Fitness
Leadership Fitness
Organization Fitness
Communication Fitness
The Strategic Quotient (SQ) is a measure of a person's strategic capabilities as exhibited through their mindset and behaviors.
The SQ is based on the 3A Framework of the three critical disciplines for being strategic. These three disciplines are:
Acumen (Thinking): The generation of insights to create new value
Allocation (Planning): Focusing resources through strategic trade‐offs
Action (Acting): Prioritizing and executing initiatives
Notes
1
. Richard Pyle, “Amelia Earhart case leaps to life in diary,”
Los Angeles Times
, April 1, 2007.
2
. Ibid.
3
. Ibid.
4
.
AmeliaEarhart.com
, accessed December 6, 2022.
5
. National Museum of American History, Smithsonian Institution,
timeandnavigation.si.edu
, accessed December 6, 2022.
6
.
History.com
, accessed December 6, 2022.
7
.
AmeliaEarhart.com
, accessed December 6, 2022.
8
.
Dictionary.com
, “navigate,” accessed December 7, 2022.
9
. Andrew Johnston, Roger Connor, Carlene Stephens, and Paul Ceruzzi,
Time and Navigation: The Untold Story of Getting from Here to There
(Washington, D.C.: Smithsonian Books, 2015).
10
. ANNEX 25:
Guidelines for Voyage Planning
, International Maritime Organization Resolution A.893(21), November 25, 1999.
11
. Christopher Dann, “The Lesson of Lost Value,”
strategy + business
, issue 69.
12
. Chris Gagnon, Elizabeth John, and Rob Theunissen, “Organizational Health: A Fast Track to Performance Improvement,”
McKinsey Quarterly
, September 17, 2017.
13
. Jim Clifton and Jim Harter,
It’s the Manager
(New York: Gallup Press, 2019).
14
. Sarah Krouse, “Robert Iger Returns to Disney Facing Radically Different Landscape,”
Wall Street Journal
, November 22, 2022.
15
. Chip Cutter, “Hilton’s CEO Sees a New Golden Age for Travel,”
Wall Street Journal
, December 19, 2022.
16
.
Merriam‐Webster’s Dictionary
, “strategic,”
merriam-webster.com
, accessed December 7, 2022.
17
. Robert Kabacoff, “Develop Strategic Thinkers Throughout Your Organization,”
Harvard Business Review
, February 7, 2014.
18
. Ibid.
19
. Patricia Sellers, “The Queen of Pop,”
Fortune
, September 28, 2009.
20
. David Yoffie and Michael Cusumano,
Strategy Rules
(New York: HarperCollins Books, 2015).
21
. “Corporate Board of Directors Survey,”
Chief Executive
magazine, November–December 2011.
22
. Brook Manville, “Want to Be a CEO? Five Essential Qualities Boards Look For,”
Forbes
, April 10, 2016.
23
. Cal Henderson, “It’s Easy to Get Lost in the Weeds,” Fast Company, December 2018–January 2019.
24
. James Kouzes and Barry Posner, Great Leadership Creates Great Workplaces (San Francisco: Jossey‐Bass, 2013).
25
. David Welch, “At Mary Barra’s GM, It’s Profit Before All Else,” Businessweek, May 18, 2017.
26
. Dorie Clark, “Pointless Meetings Are the Worst. You Can Avoid Them,” Wall Street Journal, May 7–8, 2022.
27
. Scott Anthony, Paul Cobban, Rahul Nair, and Natalie Painchaud, “Breaking Down the Barriers to Innovation,”
Harvard Business Review
, November–December 2019.
PART IStrategy Fitness
“Once we reach a certain level of expertise at a given discipline and our knowledge is expansive, the critical issue becomes: How is all this stuff navigated and put to use? I believe the answers to this question are the gateway to the most esoteric levels of elite performance.”
—Josh Waitzkin, U.S. Junior Chess Champion, martial arts champion, and author
The distance around the earth is divided into 360 units called degrees. We can measure longitude from 0 to 180 degrees both east and west. Latitude is measured north and south from 0 to 90 degrees, from the equator. One degree is comprised of 60 units called minutes, and each minute is broken into 60 seconds. Wherever we are, we have 360 directions to select from to travel to a destination of our choice. While 360 potential directions may seem like a dizzying array of choices, there's great power in knowing that you always have different options to choose from.
CHAPTER 1Strategy
“Good strategies promote alignment among diverse groups within an organization, clarify objectives and priorities, and help focus efforts around them. In essence, they act like a map and compass. They provide direction.”
—Clayton Christensen, former professor, Harvard Business School
The concept of strategy initially sprang from the need for people to defeat their enemies. The first treatises that discuss strategy are from the Chinese during the period of 400–200 BCE. Chinese general and philosopher Sun Tzu's The Art of War, written around the fifth century BCE, has received critical acclaim as the best work on military strategy, including those that have followed it centuries later. However, unlike the later theoretical treatises, the Chinese works took the form of narratives, including poems and prose accounts. An example of this prose form of strategy can be seen in the poem by Lao Tzu, the father of Taoism:
Once grasp the great form without a form
and you will roam where you will
with no evil to fear,
calm, peaceful, at ease.
The hub of the wheel runs upon the axle.
In a jar, it is the hole that holds water.
So advantage is had
from whatever there is;
but usefulness rises
from whatever is not.1
While at first glance it may be difficult to identify an element of strategy in the poem, a key principle found here is the importance of “not,” because strategy demands trade‐offs—choosing your “nots.” The business parallel is the need for disciplined focus that comes from making strategic trade‐offs: What products will we not offer? What customers will we choose not to serve? As Meg Whitman, former CEO of companies such as eBay and Hewlett Packard Enterprise, proclaimed, “Our strategy is as much the art of exclusion as it is the art of inclusion.”2
The term “strategy” is derived indirectly from the classic and Byzantine (330 AD) Greek strategos, meaning “general,” but no Greek ever used the word. The Greek equivalent for the modern concept would have been strategike episteme (general's knowledge) or strategon sophia (general's wisdom). “Strategy” retained this narrow meaning until Count Guibert, a French military thinker, introduced the term La Strategique in 1799, in the sense that is understood today. Strategy as a term entered the English language in 1810.3
Strategy Fitness refers to your ability to develop strategy, allocate resources, make decisions, and create competitive advantage. Strategy is a prerequisite for success whenever the path to a goal is obscure. Charting a clear path to a desired destination starts with a common understanding and language for strategy. Yet research with 400 talent management executives showed less than half believe their organizations have either a universal definition (44.3%) or a common language (46%) for strategy.4 And research spanning a 25‐year period on the term “strategy” uncovered 91 different definitions!5
Strategy Is Not …
Essence (noun): the basic, real, and invariable nature of a thing.6 If there was ever one thing that needed to be returned to its “basic, real, and invariable nature,” that thing is strategy. Like a boat with no anchor flailing about in the open sea, strategy has become unmoored from its true meaning. It has become meaningless. In determining the essence of a thing, it's helpful to begin with what that thing is not. Think ABCs.
Strategy is not Aspiration. How often have you seen a vision or goal masquerading as strategy? A vision is the future aspiration, what you'd like to be in 10 or 15 years. A goal is generally what you are trying to achieve. To become the market leader or the premier provider of your secret sauce or the world's most sustainable product are noble aspirations. Just don't confuse them with strategy.
Strategy is not Best practices. If you benchmark the competition and then adopt the best practices, you have not developed strategy. You have converged with the competition, not distanced yourself from it. Strategy serves to differentiate your offerings and your company from the competition by providing superior value to customers.
Strategy is not Cautious. Find a strategy that's not last year's leftovers reheated and dolled up with some salt and pepper to make it palatable to the group going down the same path that they've been down a dozen times before. Find a strategy that isn't afraid to upset some of the customer base because it actually contains real trade‐offs that are not designed to appeal to everyone, especially the unprofitable, high‐maintenance customers you should have fired years ago. Find a strategy that doesn't bore the people expected to implement it because it contains nary a new insight. As Disney CEO Bob Iger said, “The riskiest thing we can do is just maintain the status quo.”7
Off Course: Strategy is not Aspiration, Best practices, or Cautious.
The following are examples of strategies pulled from real companies:
“Become more profitable.”
“Grow our audience.”
“Be number one in the market.”
“Execute integration and capture synergies.”
“We're trying to find the people who were customers and didn't come back. That's a major strategy.”
That last one still cracks me up. Make no mistake: bad strategy can literally kill a company. In a 25‐year study of 750 bankruptcies, the researchers found that the number‐one cause of bankruptcy was bad strategy.8 Bad strategy often begins with imprecision in applying planning terms to our business. As the Chinese philosopher Confucius noted, “The beginning of wisdom is to call things by their right name.”
A plan answers two fundamental questions:
What are you trying to achieve?
How will you achieve it?
GOST Framework
I created the GOST Framework™ (Figure 1.1) to help leaders and their teams develop a consistent approach to answering these two key questions and provide a common language for strategy.
A goal is WHAT generally you are trying to achieve, let's say reaching the top of a mountain. The objective is WHAT specifically you are trying to achieve, so in this example ascending 3,000 feet each day for four days until we reach the 12,000‐foot summit. Objectives are often described with the acronym SMART: Specific, Measurable, Achievable, Relevant, and Time‐bound.
The strategy is HOW generally you'll reach the goal and objective, in this case your general approach to reaching the top of the mountain—hiking straight up, zigzagging, or ascending a path on the opposite side. The tactics then are HOW specifically you'll achieve your goal—using ropes, pickaxes, or maybe an inflatable raft to paddle around to the other side.
Figure 1.1 GOST Framework.
Here is an example for the business application of the GOST Framework:
Goal:
Become the market leader in wearable biotechnology.
Objective:
Achieve 40% market share in the apparel category by Q4.
Strategy:
Neutralize competitor product entries through real‐time innovation.
Tactic:
Key customers contribute to product engineering platform.
Rocket Burn: The GOST Framework enables you to clearly and
consistently answer the two foundational questions at the core of a plan:
What are you trying to achieve? [Goals & Objectives]
How will you achieve it? [Strategy & Tactics]
Ozan Varol, author of the book Think Like a Rocket Scientist, reinforces these definitions when he writes, “A strategy is a plan for achieving an objective. Tactics, in contrast, are the actions you take to implement the strategy. We often lose sight of the strategy, fixate on the tactics and the tools, and become dependent on them. But tools can be the subtlest of traps. Only when you zoom out and determine the broader strategy can you walk away from a flawed tactic.”9
A common challenge is distinguishing between strategy and tactics. The complementary nature of strategy and tactics has defined their intertwined existence. In the military realm, tactics teach the use of armed forces in engagements, while strategy teaches the use of engagements to achieve the objectives of the war. The original meaning of “tactics” is “order”—literally the “ordering of formations on the battlefield.”10
However, the current use of “strategic” and “tactical” stems from World War II. “Strategic” is associated with long‐range aircraft and missiles, while “tactical” has referred to shorter‐range aircraft and missiles. The term “strategic” then became associated with the completely incidental quality of long range, which bombers might need to attack industrial targets in some geographic areas. In turn, that caused “tactical” to take on the aura of short range.
Off Course: Putting the word “strategic” in front of other planning terms such as “goals” or “objectives” adds no value and only muddies the water. Keep goals, objectives, strategies, and tactics separate.
From a business perspective, a more accurate and useful distinction than time for strategy and tactics is general versus specific. Strategy is how generally to achieve a goal while tactics are how specifically to achieve a goal. If your team struggles with the difference between strategy and tactics, perhaps the “Rule of Touch” will help. If you can reach out and physically touch some aspect of the item in question, it is most likely a tactic. Strategy, on the other hand, is abstract, like leadership or love. In his writings that became the book The Art of War, Sun Tzu described the difference between strategy and tactics this way: “All the men can see the tactics I use to conquer, but what none can see is the strategy out of which great victory is evolved.”11
Strategy Defined
Strategy can be defined as the intelligent allocation of resources through a unique system of activities to achieve a goal. Simply put, strategy is how you plan to achieve your goal. With this definition comes the caveat of competition—both direct and indirect—which will attempt to prevent you from reaching your goal. That is why plans must be fluid and strategy created and calibrated with a continuous flow of strategic thinking.
Based on strategy's definition as “the intelligent allocation of resources through a unique system of activities to achieve a goal,” let's break strategy down into its three primary components:
