Corporate Strategy

There are many books, articles and scholastic treatises on the art of strategy underpinned by just as many people selling all sorts of ‘solutions’ from the pragmatic to snake oil. Each with its own methods, templates and questionable processes promising the perfect outcome. So why I am writing another one? Well I’m not, rather quoting Porter from 1996 specifically around what should be left out rather than how much to stuff in.

Before I do, first let me tell you why. I’ve been working with HEDIIP and the Higher Education sector on assessing and increasing their data capability. We use corporate objectives to ‘hang’ the benefits of improving data management, and many of these can be found in the institutions published strategy. Being a somewhat cynical Enterprise Architect I tend to view these corporate strategies with a certain amount of antipathy and mistrust. And for full disclosure, I’ve written a few so really should know better.

The biggest problem for me is not what’s in them, but what fails to be left out. Many – if not most – published strategies attempt to position their world in the next 3-5 years. This is a noble if somewhat dangerous approach to a world that is being constantly disrupted with direction hard to discern even twelve months out. The response is understandably to create strategies with some wide reaching goals that are almost impossible to measure. We will see Excellence, World-Class, Collaborative and Sustainable all name checked and referenced in some ten point plan setting out the worthy future of an organisation.

This is just not helpful. No organisation can do or be all these things. The skill of any strategy is WHAT YOU LEAVE OUT. To quote Porter:

“trade-offs arise from limits on internal coordination and control. By clearly choosing to compete in one way and not another, senior management makes organizational priorities clear. Companies that try to be all things to all customers, in contrast, risk confusion in the trenches as employees attempt to make day-to-day operating decisions without a clear framework.”

That was written in 1996 and nearly 20 years later it’s still happening. This positions strategies as nothing much more than external marketing exercises. Which is a problem because we do not define any trade offs. Porter again:

“Trade-offs are essential to strategy. They create the need for choice and purposefully limit what a company offers.”

No trade offs. No choices. Everything is priority 1 so nothing has any priority. The value of distilling the corporate strategy into your daily tasks by establishing auditable choices between one thing and another is zero. As there is nothing in the strategy explaining that choice.

So if we want to change that, let’s focus on how to do it right. Porter simply tells us to leave something out.

“The essence of strategy is choosing what not to do.”

And then goes on to explain the hazards of not doing so. 

“Strategic positions should have a horizon of a decade or more, not of a single planning cycle. Conversely, frequent shifts in positioning are costly. Not only must a company reconfigure individual activities, but it must also realign entire systems. Some activities may never catch up to the vacillating strategy. The inevitable result of frequent shifts in strategy, or of failure to choose a distinct position in the first place, is “me-too” or hedged activity configurations, inconsistencies across functions, and organizational dissonance.”

 As I’ve stated above, I’m not sure if ‘a decade or more’ is attainable. But I absolutely support the changing tactics within an all encompassing strategy at best leads to confusion and at worst to disengagement.

Porter finishes with this:

“What is strategy? We can now complete the answer to this question. Strategy is creating fit among a company’s activities. The success of a strategy depends on doing many things well—not just a few—and integrating among them. If there is no fit among activities, there is no distinctive strategy and little sustainability. Management reverts to the simpler task of overseeing independent functions, and operational effectiveness determines an organization’s relative performance.”

That last sentence nails it for me. That’s what I see time and time again. It becomes – to quote Yes Minister – ‘a loose collection of closely warring tribes’ rather than a coherent kaleidoscope of functions all operating and being measured by a well articulated strategy allowing them  to make choices.

I did find a fantastic example of a well written strategy for one institution. I have yet to find many others.  This, of course, is not an issue pertaining only to Higher Education. Every sector has volumes of whiffer-whaffery passing as strategy, and each of these has many individuals entirely disenfranchised with attempting to implement it.

I do wonder how much money is invested in creating these strategies – because we all have to have one of course – and whether any analysis is done on any value they may have generated. I do not doubt the effort, goodwill and goals for writing a killer strategy but I do question the value. Because as long as effort is confused with progress, and progress confused with value you’re going get death marches that deliver little of either.

It’s easy to poke at the problem without offering any real answers. And that’s exactly what I’m doing because we seem locked in this cycle of repeating the mistakes of the last twenty years – merely shining them up with a digital polish. Still I suppose it keeps a lot of consultancies in business.