Strategy and Potential: Charting the Course
‘If I cannot rule by red gowns, I will by red coats.’
—Thomas Cromwell
‘Divide and rule, the politician cries
Unite and lead, is watchword of the wise.’
—Louis XII
‘The greatest enemy of a good plan is the dream of a perfect plan.’
—Karl von Klauswitz
12.1 Overview
The selection, development, and retention of people with high potential will all affect the long-term survival of the organisation. The success or failure of plans depends entirely on the potential of people in the organisation. How curious and conscientious are the managers and employees? Will they be open to radically changing a company’s mission and objectives? What about the values of those within the company? Will they match up with the plan? If the strategic objectives are changing, do the employees have the experience necessary to meet the new objectives? If not do they need to be trained or replaced?
This book has divided potential up into key attributes, key traits, specific actions, hands-on development, individual relationships, and understanding the context of each individual. They are all important, critical pieces to the puzzle of potential.
This chapter will review some of the themes in strategic planning, and discuss the relevance to strategy throughout. This chapter is not intended to comprehensively cover strategy and strategic planning. The purpose of this chapter is not to explain how to ‘do’ strategic planning or strategy. That would take an entire book, and indeed there are many out there. Mintzberg’s (1994) book The Rise and Fall of Strategic Planning is highly recommended for those interested in a thorough yet straightforward and sometimes amusingly flippant review of strategic planning.
There are two key issues in this chapter:
The first issue is about the importance of having an organisational strategy regarding High Flyers. The idea of spotting people with potential is important; make finding people with the right types of potential a strategic priority. If it is strategic, then this leads to planning and thinking about the resources and processes necessary to attract, select, develop, and retain High Flyers. It also means thinking about the type of potential you are looking for. Planning what but also planning who.
The second issue is selecting those with a strategic ability. A great deal about senior executive leadership is about the development of strategy in the face of tough opposition. Having a sound, practical, innovative business strategy with clear values, and getting people to follow the plan is one of the most important activities of successful senior managers and leaders. A leader must have the potential to be strategic, and this involves a particular combination of characteristics.
As organisations grow and people become more successful, these demands can become more frequent and more challenging. Greater success brings greater demands, each vying for precious time. What used to be simple becomes more challenging to fit into busy schedules. Day-to-day issues constantly eat up precious time. Unhappy clients or customers or friends, interested business partners, uncertain social, political or funding circumstances, regulatory and legal concerns, employee vacancies, ambitious employees or employee conflict. There are any number of these day-to-day operational issues. They will always be there, they are urgent, and they need to be dealt with. If there is any sort of business or work going on, there will be a constant onslaught of these small tasks that can bog down the most productive person or the greatest leader.
It is quite probable that many parts of the organisation have their own departmental strategy: the R&D strategy; the marketing strategy; the HR strategy. This begs two questions:
• First, what is the overall, integrated strategy for the organisation?
• Second, who is responsible for recruiting and developing High Flyers and those with high potential?
Too often that part of the puzzle sits both everywhere and nowhere. In most organisations it is pushed away to the HR department.
In this area it is important to distinguish between really being strategic as to being tactical. The strategy of the organisation determines tactical objectives such as what needs to be done and what the next steps are. This has important implications for answering the question, potential to do what?, when looking at individual potential and performance in the organisation. Inevitably each person must be accountable for their own work and performance. Ideally the high-level leader should be clear-thinking strategists with a clear and logical plan for the future. Leaders must be able to convince others to implement strategy. Hogan (2009) has distinguished between four types of thinkers set out below:
1. The Strategic Thinker: one with a clear strategy and effective operations (high conscientiousness, high ambiguity acceptance);
2. The Operational Thinker: the one who, through experience, runs efficient operations but needs instruction and direction (typically low ambiguity acceptance, high conscientiousness);
3. The Day Dreamer: the one with impressive strategies but not related to current realities (high curiosity, low conscientiousness);
4. The Crisis Thinker: the one who with little strategy and few effective operations moves from crisis to crisis (possibly high reactivity to stress, low conscientiousness).
The naturally strategic thinker has a wider timeframe, a broader canvas, and is interested in both means and ends, and the processes involved in making things happen as planned.
12.2 What is strategy?
Strategy is most typically defined either as a plan or a pattern (Mintzberg, 1994). As a plan, strategy is defined as an idea or direction to be pursued in the future. In the sense of a plan, planning is typically a formal procedure combined with specified results. A pattern, unlike a plan, is a theme that emerges from patterns of behaviours. Whereas a plan is preconceived, a pattern is noticed after or during a process.
Most simply then, strategy can be subdivided into two categories (although in reality the distinction is never this simple):
Top-down Strategy (deliberate): These are the plans, visions, and objectives that start with the CEO or leader. Henry Mintzberg (1994) ironically describes these strategies as ‘immaculately conceived’ because they are supposed to emerge entirely from a single person fully formed. This is the leader’s grand strategy that is intended to direct all efforts and processes in the organisation.
Bottom-up Strategy (emergent): These are the patterns that emerge. A relatively healthy organisation will continue to pursue actions that are successful, and eventually actions emerge as pattern, things are done in a certain way, certain goals are pursued fairly consistently because they appear to be working.
The strategic thinkers are planners who imagine and guide the direction, the crisis thinkers watch helplessly as plans emerge. Most see planning as a purely top-down process, with the CEO playing the role of grand strategist, setting out an overall vision with specific objectives. Yet, it is extremely rare and not particularly desirable for strategy to be entirely bottom-up or top-down, ‘one suggests no learning, the other no control’ (Mintzberg, 1994, p.25).
One of the original schools of thought on strategic planning, ‘The Design School’, is the epitome of top-down planning, but generally a useful overview of strategy in seven key points is:
1. Controlled and conscious. The first key point is that strategy is a process of human reasoning. Essentially, it is top-down, and the result of logical thought, planning, and problem solving. Strategy is about creating a plan within the environment, not about trying every possible approach, then using what appears to work the best. Strategy emerges from clear thinking, intention, and planning. This is important: the strategist should control the process, but not be too controlling.
2. Role of key strategist. One person is the strategist. In a company this is the CEO or highest level leader. The key strategist sets the direction and is the designer of strategy. This is the person who sets the plans, the outlines, the direction and develops a strategy that others set about to accomplish. There can be an emphasis on social or corporate responsibility in this role (although sometimes it is omitted). The organisational values should largely shape the strategy, which in turn influences organisational culture. Strategy, plans, culture and values do come from the top. A core set of values can guide the organisation even when strategies change and emerge: beware the leader who values their own power and control.
3. Fully formed. Strategies should emerge from the leader, or that key strategist, fully formed. They of course should be duly considered, pondered upon, controlled, and conscious. They are not to be taken rashly, but once a strategy is developed it should be complete, coherent, and conceptualised. This is not a vague idea that takes shape through its implementation, it is pre-determined and success can be measured (as well as failure). Plans must be clear and coherent, but that does not mean they should be unresponsive to new or changing circumstances.
4. Simple and informal conception. This is (fortunately) related to the point above. Because the strategy needs to be fully formed, it is ultimately an act of judgement by the key strategist. Strategy formation is not a long, drawn-out process with formalised planning with vetoes, chances for committees to modify or dilute the strategy. The strategist must be open to information and listening to different opinions, but must ultimately have the confidence and courage to choose a direction.
5. Unique and creative. Success is dependent on a unique vision; it places the organisation at a unique advantage, with a strategy that sets it apart. It provides the path to success that matches both the current position of the company and the external environment. There is no strategy that can be transplanted between companies, and copying others’ strategies is not a great strategy. That careful and deliberate reasoning, problem solving, and expert judgement of the key strategist must lead to something creative, innovative, that charts a distinctive and well-planned course. The level of creativity is very dependent on the industry.
6. Explicit, clear, and simple. Quite simply, other people need to understand the strategy. It needs to be something that others can understand within a few pages of reading or a quick conversation. If a strategy cannot be easily explained, it’s unlikely others who are responsible for carrying out the key aspects of the strategy will know what to do. If, after careful deliberation, the master strategist cannot figure out how to explain the strategy clearly to others, it indicates either a poor strategy or a poor strategist. The clarity and simplicity is equally important so that the strategy can be tested and evaluated. There must be ways of testing progress and success. The good leader is also a good researcher, constantly asking what will work, and who is best to do it?
7. Implementation is essential. The final point is the most important. Without implementation the strategy is pointless. It does not matter how brilliant, well planned, or well communicated the strategy is, if no one actually does it. There are limitless reasons a strategy ends up not being implemented: lack of available skills or resources, poor communication, unconvincing leaders, unexpected external condition, or sometimes, simply no-one bothers. Be cautious about hiring people for strategic positions who constantly have good ideas that never go anywhere.
12.3 A Realistic Model of Strategy
All good strategy inevitably involves both bottom-up and top-down strategy which goes through a few key stages:
Intended Strategy
Intended strategy is the plan conceived of by the CEO, leadership team, leader, or planner. It has all or most of the key elements from the ‘Design School’, so it is fully formed, communicable, and doable. It is centralised, and is the top-down strategy.
Emergent Strategy
Emergent strategy evolves as a result of the most successful behaviour in an organisation. Intelligent people naturally learn what works and what does not; what gets the individual rewards and what does not. The emergent strategy is essentially the product of group learning and intelligence – it is about adapting to improve performance or output in the organisation. The emergent strategy is reactive, and may be adaptive. However, ‘toxic triangle environments’ (as discussed in Chapter 7) or unfavourable circumstances can lead to toxic emergent strategies. For example, systems that reward self-preserving behaviour instead of good performance may find inward-serving strategies emerge.
Deliberate Strategy
Deliberate strategy is strategy that was intended, but is not entirely visible in practice yet. It comes out of the initial interaction between intended and emergent strategy. The patterns of behaviour that emerge are, at least partially, intended.
Realised Strategy
Realised strategy is the pattern of behaviour that actually ends up happening. The realised strategy may be either entirely intended, or entirely emergent, but is usually a combination of the two. Most processes involve an interaction. A strategic vision is developed by leaders, and the realities of the work influence the way the work is carried out, and the outcomes.
Mintzberg (1994) says, of realised strategy:
‘The important question thus becomes: must realized strategy always be intended? There is a simple way to find out: just ask those people who happily described their (realized) strategy over the past years five years what their intended strategies were five years earlier. A few may claim that their intentions were perfectly realized. Suspect their honesty. A few may claim that their realizations had nothing to do with their intentions. Suspect their behaviour.’
Figure 12.1 A Realistic and Simple Model of Strategy Adapted from Mintzberg (1994)
Think back to all of the topics we’ve covered in past chapters and how they will influence strategy both from the top, and from the bottom. What kind of leader is in charge of this strategy? Is he or she conscientious? Is strategic planning going to be clearly formulated, goal-directed, well-thought out at times? Or will it be an ad hoc process that is done at the last minute, bit by bit? What about the values of the leader and leadership team. Values, of course, will influence the values in the plan. Does the leader have ‘dark side’ traits? How much of the vision is about the success of the organisation, and how much is about the leader’s own glorification, excitement, or destructive impulses? Of some key traits, characteristics and values which would you want in a leader? In a technician? What are the similarities and differences?
12.4 How Does Strategy Relate to Potential?
If strategy describes the overall planning or patterns of behaviour in an organisation, the potential of those in the organisation contribute directly to both.
Strategy Shapes Potential
Good strategy links directly to measurable objectives, and requires organisational values and goals. The objectives of a non-profit may be very different from a for-profit company even in the same occupation and industry. For example, a chemist at a large pharmaceutical company and at a research university likely need the same skill set, but fits into a very different organisation with a clearly different strategy.
The values of an organisation shape who ‘fits’ and what potential is valuable. The objectives that flow from strategy should, at least partially, answer the question potential to do what? What characteristics, skills, and competencies does the person need to achieve the goals? But without a strategy, it is impossible to answer that question potential to do what? What is most important? Making the most money? The highest margins? Delivering the best service? Having the most satisfied customers or clients? Survival? Aggressive growth? Philanthropism? The strategy shapes this, and thus, who is the highest potential in that organisation, given a particular strategy.
Someone with a key set of skills and characteristics may have all the required skills to succeed in that occupation – they may be high potential. But, they may be very high potential in one strategic context and low potential in another.
Potential Shapes Strategy
The potential of the people in the organisation will always affect strategy. In the simplest sense, this is because the upper limits of those working at the company, and the circumstances outside may restrict strategy. Poor performers cannot implement more efficient or demanding tasks. Furthermore, even top performers are limited by their company situation or competitors.
It would be irrational for a private health care provider with a single clinic to set the strategic goal of becoming the largest, highest capacity provider of medical care in the UK within five years. The external conditions, competitors, public attitudes, and realistic growth make this extremely implausible. A possible (although not easy) goal might be to have the highest customer satisfaction ratings for medical care in the country. In many ways this is more suited to a small company. And this strategy would shape the conceptualisation of potential.
To implement this strategy, one needs people with excellent customer service ability and bedside manner, not just medical skills. Expert IT technicians would probably be needed, to ensure an easy-to-use, accessible website was available, and possibly an online system of bookings, records, and perhaps more. A successful strategy needs to be built on strong foundations of knowledge. An environmental scan should provide this.
12.5 Environmental Scans and the External Context
The Strategy frames what is important and sets the tone. Strategy is complex and challenging, so the environmental scan is background research and reporting. The environmental scan identifies what information is important and relevant to the strategy and how the information and results can inform the planning process. While strategy is forward looking, the environmental scan grounds the strategy in past and present situations, along with current internal and external forecasts. It describes what is happening now, to help the strategist(s) decide what should happen.
Clare and Nyhan (2001) describe four key elements of an environmental scan. First three key aspects are part of the internal environment which describes everything within the bounds and the control of the organisation. The external environment is everything else that is outside of the organisation’s control, but influences it such as social and economic trends, regulator environment, public opinion, and technological change.
Resources are essentially input. What funding, income, and people are already available to help the organisation achieve its objectives? What resources are unavailable or missing?
Management governs the allocation and use of resources; how funds are spent, people directed. What structures are in place in the organisation?
Output is the products, services and outcomes of the organisation. A car manufacturer outputs cars, whereas a university’s output is not material, for example research, publications, and graduates.
One popular way of structuring the environmental scan is to organise the themes into Strengths, Weaknesses, Opportunities and Threats (SWOT), which are internal or external, positive or negative as shown in Figure 12.2, below.
Figure 12.2. SWOT Analysis
Strengths are internal and helpful. Strengths provide advantages to the organisation. A strong development and retention plan would provide internal advantages, for example:
• Advantages of proposition
• Capabilities
• Competitive advantages
• Unique selling points
• Resources, assets, people
• Experience, knowledge, data
• Financial reserves, likely returns
• Marketing: reach, distribution, awareness,
• Innovative aspects
• Location and geography
• Price, value, quality,
• Accreditations, qualifications, certifications
• Processes, systems, IT, communications
• Cultural, attitudinal, behavioural
• Management cover, succession
Weaknesses are internal and harmful. Weaknesses place the organisation at a disadvantage. Unnecessarily high turnover rates of top talent would be a weakness, for example:
• Disadvantages of proposition
• Gaps in capabilities
• Lack of competitive strength
• Reputation, presence and reach
• Financials
• Vulnerabilities
• Timescales, deadlines, pressures
• Cashflow, start-up cash drain
• Continuity, supply chain robustness
• Effects on core activities, distraction
• Reliability of data, plan predictability
• Morale, commitment leadership
• Accreditations, etc.
• Processes, systems, IT, communications
• Cultural, attitudinal, behavioural,
• Management cover, succession
Opportunities are external and helpful. They can be used to the advantage by the organisation, if they are identified. Potential new markets, new revenue or new funding sources can be opportunities, for example:
• Market developments
• Competitor vulnerabilities
• Industry or lifestyle trends
• Technology development and innovation
• Global influences
• New markets
• Niche target markets
• Geographical, import, export
• New unique selling points
• Tactics: surprise, major contracts, etc.
• Business and product development
• Information and research
• Partnerships, agencies, distribution
• Volumes, production, economies
• Seasonal, weather, fashion influences
Threats are external and harmful. They could, potentially, damage the organisation or hamper its objectives. Labour force shortages can be a threat, for example:
• Political effects
• Legislative effects
• Environmental effects
• IT development
• Competitor intentions
• Market demand
• New technologies, services, ideas
• Vital contracts and partners
• Sustaining internal capabilities
• Obstacles
• Insurmountable weaknesses
• Loss of key staff
• Sustainable financial backing
• Economy: home and abroad
• Seasonality, weather
The SWOT can quite easily be applied to the organisation’s plans for high potential, and to individuals. What strengths do the people in the company have? What potential do they have to improve performance, learn new skills, and move into more demanding positions? What about the weaknesses? Are the limitations from staff or the systems? Are there high potential people that are not developing or who leave the company? How is the labour force affecting supply of workers? Where are you looking for those with high potential? Other companies? Job seekers? Universities? Clubs or social groups?
Another variation is PEST (Political, Economic, Social and Technological), which breaks down Opportunities and Strengths into four factors. The key for strategic planning is to identify the most important and relevant factors which will have the greatest impact on strategy. The important piece for high potential is to look at the system, and what is inhibiting or enhancing potential.
These can then be referred to when planning. The strategic plan should be informed by these Strengths, Weaknesses, Opportunities, and Threats. Take the size of the business for example: is a small business, with ten employees, a strength or a weakness? It can be either.
Large organisations may have the advantage of more resources, personnel, or time to devote to assessment, hiring, standardised development programmes, and other talent management. This may take the form of internal processes, sub-contracting the work to others like assessment centres or headhunters. Organisational size can refer to number of employees, amount of revenue, social influence, or geographical size.
Initially, this may appear to provide a competitive disadvantage to smaller organisations. A small business is unlikely to have the resources, or the capacity to draw on large multinational talent pools, to outsource recruitment and development, or to purchase comprehensive assessment materials (along with the necessary expertise). Yet small firms can be more adaptable and may be able to develop more personalised, in-depth evaluations of employee potential or development. They may be more able to focus on individual retention and personalised development opportunities. Larger companies that rely on external evaluations of employee potential may seem more informal, smaller companies may have a greater opportunity for leaders to get to know people working with/for them.
Strategy will, inevitably, be different for companies of different sizes, and size is even relative between industries. How many employees? How many customers/clients? Turnover? Profit? What about non-profits and public services? ‘Why is a raven like a writing desk?’ asks the Hatter. When pressed, ‘I haven’t the slightest idea’, he responds.
It is essential to include the potential of people in the environmental scan, as well as the strategic plan. Potential mediates probability of success. An environmental scan should explicitly refer to the potential capabilities of people and groups within the organisation. Look for groups that are stretched beyond their abilities, those that are at just the right level, and those that could improve the performance of the organisation, or with proper development would improve the performance of the organisation.
12.6 Non-profits and For-profits (and Public Services)
Non-profit organisations are typically viewed as community-based, grassroots, or charitable organisations. Really, non-profits are organisations where the profits remain in the organisation, instead of being distributed to owners, shareholders, etc. Non-profits (as well as profit-making companies) are increasingly being used to provide the services that government used to be responsible for.
So what are the benefits of non-profits, and what do people believe are the benefits of non-profits? These questions have implications for strategy. The size, direction and values of the organisation apply directly into strategy and planning. MacFarlane and Roach (1999) researched the key themes of non-profit organisations and their findings are shown in Figure 12.3. They found that there are many advantages to non-profit organisations including strong connections to communities and their clients, so they are better able to adapt and react quickly. They may have advantages attracting committed staff because they attract people who are committed to the cause, and join wanting to ‘help’. They can be cheaper because profits are not required, and volunteers reduce labour costs.
Many non-profits are smaller, and specialised for certain tasks and certain communities, so they can excel and adapt, and are not necessarily focused on growth or expansion. There are, of course, disadvantages that for-profit businesses may not face. Volunteers, although willing and eager to help, may not always be trained or qualified, and it may be difficult to provide proper or standardised training. They may be more dependent on the good-will of others, and require donors, volunteers or funding to function. Some argue that lack of a profit motive reduces efficiency. Others would argue a profit motive does not create the highest levels of performance or efficiency. MacFarlane and Roach (1999) then describe the organisational ‘traits’ of effective non-profits, and we have organised them into the three key strategic elements.
These three themes are equally applicable to for-profit organisations. All should have sustainable financial and service (or sales) structures. There are very few difference between the actual process of strategic planning in for-profit and non-profit companies; the key difference is in the outcomes. Rogers, Finley and Galloway (2001) outline the key differences which affect strategy for non-profits.
Figure 12.3. Key Strategies of Effective Non-profits Adapted from MacFarlane & Roach (1999)
The Board
In for-profit companies, the board are typically owners of the company and tend to be (but are not necessarily) more actively involved in running the company. Non-profit boards tend to be made up of key stakeholders, or people with the right skills, knowledge, or connections for the organisation. Non-profit boards should represent the diversity of their client base as well as having a broad range of skills and job descriptions aligned with the organisation’s purpose. For non-profit boards, sophisticated selection is crucial. Select people who have the potential (and the time) to perform their role.
Customers
For-profit companies have customers, and the relationship is usually relatively simple; customers purchase products or services. But the relationship can be more complex for non-profits. Non-profits have ‘clients’ which may receive products or services, or may receive funding. For-profit companies tend to want customers to return, whereas non-profits, such as those delivering (un)employment services, may not want to see clients regularly returning.
Stakeholders
In for-profit companies the concept of stakeholders is simple: those who have a direct stake or interest in the company such as customers, employees, owners or shareholders. For non-profits the distinction may be less clear, because funders, political organisations, communities and other people or groups may have a direct interest in the organisation or their results. Many non-profits have stakeholders who are not directly involved in operations, but have an interest in the process or the results of the non-profit. For example local employers have a keen interest in the results of non-profit employment centres whose objective it is to help unemployed people return to work. The interests of stakeholders shape how employee potential is defined.
Volunteers and Donors
Non-profits typically rely on voluntary labour or financial contributions to the organisation. Spotting, managing, and developing talented volunteers is different from employees. Although there are unpaid intern positions in for-profit companies, these are still very different from volunteer positions in non-profits. This is particularly relevant to values. Despite the interest, engagement, and satisfaction many people derive from their work, the paycheque is still crucial. Volunteers do not need the money, but usually come in with strong and clear values. Other volunteers value the career experience and hope to improve their employability. There should be a clear description of potential to do what? What does the organisation want the volunteer to do? What does the volunteer hope to get from the experience?
Competition
The role of competition is very different in for- and non-profits. For-profits may compete for customers, employees, and compete with other companies. Non-profits may compete for funding, for donations, for skilled employees, and for media or political attention. The increasing prevalence of subcontracting public services means many non-profit and for-profit organisations are finding themselves competing against each other for funding, resources or contracts.
Thus, the strategic planning process in all organisations requires an analysis of all internal and external factors, and working with stakeholders to answer two questions: What do we want to do? (mission, vision, success criteria) and How do we want to do it? (values, objectives). Once these are clear, people can be selected, developed, and retained based on their fit.
12.7 What (Strategic) Planners Need to Do
Mintzberg (1994) suggests there are three key responsibilities of those responsible for planning strategy, only one of which is actually planning. These go beyond the actual strategy, as it exists, whether it is codified into an actual strategic plan, whether it is an informal, or an emergent strategy. The role of the strategist, who is typically the senior leader or CEO, or an expert planner who is brought in, is to move the strategy from an amorphous concept or idea into an actual plan that actually happens. When selecting a planner, find someone who can do this. When the planner is brought in, make sure the leadership team is prepared to be advocates for the plan. When developing a planner, teach and show them how to do this, and give opportunities to practice.
1. Finding (Patterns of) Strategy: The planner needs to connect the overall plan with the realities and situation of the organisation. This means tying the strategy into what is already happening, and what people have been doing. The future plan must relate to past circumstances and behaviour. People understand new ideas and plans best when they relate to their own lives and behaviour: psychologists call this the self-reference effect (Rogers, Kuiper and Kirker, 1977). People remember things better and tend to identify more closely when they can see how it connects with their own understanding. So the good strategy is not about immaculately conceiving a strategy and sending it out in the world to grow on its own. Good strategy is grounded in logic, and logically tied to any emergent or developing strategies. It must be about creating a clear connection between the past and future directions.
2. Analysing Strategy: It should not come as a surprise to readers of this book that measurement and analysis is essential. The most successful planners are excellent at measurement: all good planners must in some way be good researchers. A strategy is a plan, thus it must be possible to assess whether or not the plan works. Just as the ultimate measure of individual potential ends up being individual performance, the ultimate measure of a strategy is the performance of the organisation. Thus, it filters directly down from strategy, to individual potential, to performance. If a university’s strategy is to have the most satisfied students, who is contributing to that and who is not? Which departments are causing trouble? Which in the department are the real programmes? And if that is the key objective of the university, it helps to answer the question of potential to do what? The lecturers that will be the top researchers, leaders, or speakers may (or may not) be the ones that the students will be most ‘satisfied’ with.
3. Communicating Strategy: The strategist, particularly the senior leader as the strategist, is responsible for making sure people understand the strategy and promoting the strategy and its direction. This is not a matter of formal or rigid procedures like writing memos, reports, newsletters, or distributing new policy documents. Communicating the strategy requires informal, social processes with senior leaders and other key people in the organisation. It is a process of describing the strategy, encouraging commitment, and finding ways to tie it into specific roles, departments and individual understanding. It can also help to identify potential areas of resistance, and broaden the leader’s perspective.
This ties into the final section of the chapter, on strategic vision, and the role of a leadership position.
12.8 Traits of the Strategists
Each of the characteristics we discussed in Section 2 are relevant to strategy. While different ‘levels’ of characteristics are suited to different positions and jobs, there are particular combinations that are suited to strategic thinking.
A) Personality
The High Flying Personality Traits have a specific combination that indicates high potential strategists.
Conscientiousness: Conscientiousness means strong planning, goal-directed behaviour, and discipline. Strategic thinking is impossible without high conscientiousness. Low conscientiousness leaders are those whose organisations will be governed entirely by emergent strategy. They may be brilliant negotiators of last minute situations, of adapting to opportunities, and being decisive even when they do not know what is going on. But strategic leadership is next to impossible without high conscientiousness.
Reactivity to Stress (Adjustment): Adjustment is helpful, but also relative to the demands of the organisation and situational factors. Greater demands, more intense pressures and hostile climates demand greater adjustment (emotional stability). Leaders must take responsibility, and the brunt of responsibility and consequences, which requires emotional stability. The strategist must be able to overcome their own emotional (in)stability and focus on the values and strategy of the organisation.
Competitiveness: Competitiveness is instrumental, but in moderation. Useful (instrumental) competitiveness focuses on the success of the organisation, competitive advantage of teams, departments and the company. The moderately and adaptively competitive leader can channel their desire to succeed into realistic and conscionable objectives. The hypercompetitive leader wants to be seen as the success of the organisation, whereas the completely uncompetitive leader may have difficulty focusing on strategic advantages and pursuing opportunities.
Curiosity: Curiosity is essential for strategy: the desire to learn and explore information is foundational for the strategist. Good strategy is rooted in a rich understanding of the company, the people in it, and what is going on outside of the organisation. Continual learning informs the top-down strategy, helps to discover successful emergent strategy and to make informed decisions. It is difficult to develop a strategic understanding of any issue or company without intellectual curiosity.
Ambiguity Acceptance: The oversimplified solutions are often the most appealing and the least successful. Those with high ambiguity acceptance seek out more information, even when there are conflicting opinions. Leaders must have the capacity to listen to unpopular or dissenting opinions, and those with low ambiguity acceptance have little tolerance for vagaries or complexity. But, good strategy cannot form without understanding of complex issues. Simple, unambiguous, and insincere solutions are frequently peddled by toxic leaders.
Courage: Courage, when it is constructive and conscientious, is required for leaders and strategists. The leader as a strategist must have the courage to explain why the strategy is important, even in the face of opposition. They must have the fortitude to stand by and explain their own values.
B) Other Characteristics
All other characteristics described in Section 2 are important to the strategic.
Intelligence: If the unintelligent person does manage to blunder or bluster their way into a position as a strategist, they will not last long. The strategist needs to grasp many diverse and complex concepts, and must be able to learn quickly from experience. Intelligence as the ability to adapt to circumstances and environments is fundamental to strategic leadership. It is not just the ability to adapt personally, but to direct an entire organisation to success in a complex and highly variable world.
Experience: Potential leaders and strategists may be born with the right high potential characteristics but they will not succeed without the right kind of experience. A strategic understanding must be based in understanding and experience of systems, people and tasks. Greater depth of experience translates into more insightful strategy (when combined with the right traits).
‘Dark Side’ Traits: ‘Dark side’ traits are to be avoided at all costs. Narcissists, Machiavellians, and psychopaths will be drawn to strategic positions, and will bring their own set of values and own particular vision to the organisation. The problem with ‘dark side’ traits is that they are entirely self-serving. When large-scale strategy serves one person’s interests, derailment looms.
12.9 Values
Values are part of the strategic planning process, but values are arguably more important than the strategy. The strategy is what the person and the organisation are supposed to accomplish, but values are the reason to get up and go to work every day.
Organisational values are similar to personal values (as discussed in Chapter 6). While personal values are rooted in social background, upbringing, and culture, organisational values come from the top; either the leadership team or the leader. Strong leadership means setting a clear tone, where even if external or internal situations change, if the strategy changes there is still a core set of values guiding everyone in the organisation. They are abstract and describe what is preferable. Strong and clear organisational values usually have a clear focus: a few key ideas and priorities that guide all actions and strategy in the company.
One of the clearest, most resonating messages we heard from Lloyd Craig, our High Flying exemplar, was the importance of values. Coast Capital Savings’ values in 2008 were codified in the annual report (Coast Capital Savings, 2008) as:
‘We have a passion for innovation.
We engage in spirited teamwork.
We help our customers, community and each other.’
Lloyd described these values to me slightly differently, but it is clear his values shaped the values of the institution. In 2008 financial institutions around the world were suffering from a cascading series of bad loans and investments, repackaged and resold many times over. He says that a culture of greed can become endemic and self-perpetuating, and it all comes back to values. If you value a new house in Hawaii and a new Porsche in the garage more than your customers or selling a good product, that will come back to haunt you. If bad behaviour is allowed to continue with a sly wink and nudge, the consequences will eventually be severe (and in the case of the financial services industry, repercussions were quite severe). Leadership and corporate values are crucial. Lloyd says a good leader, informed by strong values will say:
‘We will not be responsible for selling crap to other banks, through our investment bank, to our client, be they little old ladies or companies or pension funds. When they do business with us they’re getting quality: that comes from the top.’
Many of the lessons of this book tie directly into Lloyd’s experience and character, and it is interesting to see how strongly values tie into his belief system, especially considering the continual success he brought to his work and company. He describes how early work experience and a strong mentor influenced his values. He notes his parents were always active in the community and were a source of positive and constructive values in his early life, but it really ‘sunk in’ when a mentor re-iterated the importance of values in business. Lloyd’s mentor, John Cleghorn, who later become Chairman and CEO of the Royal Bank of Canada, told Lloyd early in his career ‘We take from this community, so every day we have to give back some of what we took’. This really underlined the importance of charitable work and community involvement. It also shows how important strong and ethical leaders, mentors, and influencers can be in developing High Flyers and constructing strategy.
Values can be personal, social, cultural and corporate. In an organisation, values come from the top, and influence the corporate culture and those High Flyers in the organisation. Positive and constructive values influence behaviour, performance and development, and toxic leaders with destructive values can have an equally strong impact. Passive leaders without clear (or courageous) guiding values will allow culture and values to develop from the bottom-up: And as we discussed in Chapter 11, survival of the fittest models do not always promote desirable behaviours. Strong values affect the entire company, attract people with similar values and earn the respect, trust, and loyalty of both employees and customers.
12.10 Conclusion
It is fitting to end this chapter and book by discussing values, because evaluative judgements are the purpose of this book. Potential to do what? is not an objective question; it is a question of what possibilities and probabilities do you, your team, or your company value? What do you value in your own career?
Strategy can either be created, immaculately conceived, or it can emerge from successful patterns. But the judgements of what is a successful strategy, who is a good employee, and who is high potential will always return to the question of values. High potential will inevitably be measured by performance. And, as Lloyd says, ‘you get what you allow in your team. If you allow bad behaviour you get bad behaviour. Don’t hire people in your own image, but hire people that reflect your values.’ Find people with all the right traits, experience, high potential characteristics, and with fitting values. There may be many things about your own psychology that you cannot change. Culture may shape values, but values also affect culture, they affect groups and teams around you. Experience or achievements, successes and failures, derailment, demotions, promotions or prizes are what you get, your values define who you are.