Kathryn: I have never done that, but I’m not gone yet.
Rick: There you go. How about you, Alex?
Alex: Well, it’s summertime, so my daughter got a scooter and we’ve been doing a lot of scootering in the park.
Rick: I am actually quite jealous. My daughter got married a few weeks ago, so we’re in very different stages of our lives.
Alex: Very different.
Rick: Well, hey, I really appreciate you both being here today and I’m very excited to talk to you a bit on some of the work you’ve been doing with our clients and strategic planning and some of the shifts you’ve seen and what the best of the best are really doing when it comes to planning their strategy.
Kathryn: One of the things that’s interesting to me is how loosely the word strategy is used. So you know, when we work with our clients, we have to be very clear. Are they creating a new strategy? Are they aligning people to the strategy? Are they setting priorities so the business units and functions know what they need to do to execute the strategy? Or have they been executing the strategy for a while, run into obstacles and then need to get those out of the way to continue to get the results they want.
Rick: Is it very dependent on where we are on that continuum when it comes to doing strategy formation work?
Alex: It’s always good to revisit your strategy and particularly I think in this environment with things changing so rapidly to take a chance to actually think about the future and look at all of the different disparate trends that may be impacting our business.
So spending time refreshing on that with the people who are closest to the customers, seeing the trends in practice, fighting against the competition, can be really helpful to inform the executives on what do we actually need to refresh about our strategy? What do we need to rethink both for the coming year and also as we think about planning and what’s required to set you up for the future as well?
Rick: There was an assumption built into what you just said, Alex, that is very much in the heart of the work that you both do and may not be obvious to our audience. And that was when you said “with the people who were doing the work”.
I’ve been in a lot of strategy sessions and a lot of strategy development sessions, and the people that are actually doing the work are either three to four levels below the people that are forming the strategy, or the people that are forming the strategy are outside consultants. I’m curious in the work that you’re doing, what does that look like to have the people that are really doing the work part of the strategy development?
Kathryn: Let me reinforce something you said. It’s a pet peeve and a prior sin of mine. I grew up as a traditional strategy consultant. You know, we were smart. We got in a room. We worked with just a few executives and we came up with these brilliant strategies, right? This was in the olden days where you would put them in a binder, the binder would sit in the shelf and maybe it would get implemented, maybe it wouldn’t.
And the thing that still happens, I’m appalled, but it still happens in this day and age where you can get people together virtually. We believe that the more people engaged in the strategy process, the better off you be. It does not mean that you have 17,000 people deciding the strategy of a company.
It is still not only the role, but even the obligation of senior leaders to set the direction, probably set the goals, work with their shareholders to see what are the metrics that they most need to go at. But if you do not engage people early on in the how, they won’t understand the what. And doing that in a way that people really get it allows them to do what Alex said, which is pivot and change when conditions change.
The strategy may not change, but the conditions in which you need to implement do. So thinking about how you’re going to implement while you’re talking about what you have to do is actually a best practice in the strategy formulation area.
Alex: To say that even more simply: the most innovative strategy is not going to be helpful if your people don’t believe in it or can’t execute it. So, involving them early helps to actually raise some of those issues early on so that they can be resolved more quickly in execution.
Rick: So, I’m doing my best to put myself in, the mind of a well-intentioned, business unit head, and I’m thinking: yeah, it sounds smart from an execution standpoint, but if we’re bringing people in, when we’re still trying to figure out our direction, is that going to potentially build unnecessary fear, ambiguity, even a lack of confidence in us as a leadership team?
Kathryn: I think that’s a really good question. And I think you’ve just expressed what the fear is of many executives about including people because they believe they are obligated to have all the answers. Guess what? They’re human beings too. They can’t possibly have all the answers. And in many cases, they’re not the people who are closest to customer who are closest to the competitors who are closest to the front line and what those, realities are.
And so, by engaging those perspectives and making sure that they’re different perspectives, you actually create a plan, a strategy, and priorities that everybody feels that they own.
Alex: We were recently working with a CEO and executive team to set their next three to five year plan. And it was really all about that entrepreneurial spirit and continuing to get the next deal. And when they actually brought the next level of leaders into the conversation to think about their priorities for their next three to five years, the leaders brought up a lot of the realities and made the point to the executives that yes, we want the entrepreneurial spirit and we want to continue to opportunistically go after new growth areas. And at the same time, we can’t actually bolster and protect our core business in the way that we should to stay competitive for the future if we’re always spending time over here.
Rick: Yeah. And it’s, funny, the thing that really stuck in my head there, Alex, is: three to five years? Most people don’t know what’s happening in three to five quarters. How are we building strategies, or is it essential to build strategies, that can shift and pivot quickly?
Kathryn: It’s the reality. It’s probably been the reality since the 2000s, whether we believe it or not. We’re not saying throw out your annual budgeting process. We’re not saying throw out your long range plan. But how you’re actually going to execute and get to those business results is really about executing in the current conditions. And that’s why we believe you have to have more leaders engaged because when they’ve internalized that purpose, they can figure out the three-four-five-infinite number of ways that you can actually make that happen.
We’re talking about imbuing leaders with the intention of the strategy so every day they can wake up and say, today is the day that I’m going to help make the most powerful offering for our client. Their job (mid-level leaders, frontline leaders) is to actually figure out the most powerful manifestation of that strategy given the current conditions. I do believe you can have a purpose and even goals that persist over a three to five year period. And the number of ways that you’re going to figure out how to execute against those are going to change enormously.
Let me give you an example. We have a client that has put together, kind of a technology ecosystem from pharma to providers to pharmacists to physicians to patients. And they built this over time. They had the right applications and tools for each one of those various stakeholder groups. And now they have to put it all together, right? And so while they had a single focus maybe on a pharmacist or on a provider, they now have to look at the entire ecosystem.
They’re doing the same thing. They have exactly the same purpose. They have just upped the challenge to themselves to create a seamless technology ecosystem that really provides something very special and helps innumerable patients get medications they need faster and more cheaply. And so, what they’re trying to do, is now more possible because of technology. And they changed how they’re going to do it. They’ve not changed their purpose. They’ve not even changed who’s really going to benefit from it.
Rick: Circumstances market conditions can shift even sometimes dramatically, but the core strategy doesn’t need to necessarily pivot as quickly. But I am assuming that within any new strategy, there are shifts in ways of working that have to happen. Part of your approach is getting people involved, getting them to author their own future.
Alex: Yeah, and one of the problems that we see often is leaders go publish the strategy and tell everyone to go execute it and then say, you’re empowered to go figure it out. I’ve told you the strategy. Go figure it out. And I think we’ve seen time and time again how that doesn’t work. And we’ve seen lots of examples of executives coming back to consultants and saying, “I’ve told the strategy over and over again to my teams, we’re not seeing anything change”.
So I think there’s a little bit of a balance there. And what we’ve seen work really well is not stopping at defining the strategy, but then actually engaging people in what’s different about that strategy and making sure that everyone has the same assumptions and they’re working towards the same picture of success.
We had one client in financial services who had a new pricing transformation that was a piece of the strategy that had milestones against it, a roadmap, people were working on it. We brought them together midway through the year to actually work on what’s working well with the priorities, what’s not, and where might we need to adjust.
And the amount of people who had a different understanding of what pricing transformation meant was incredible. It really shocked the executive team who thought that it was very clear. So I think people can figure it out and it’s really important that they’re marching in the same direction and are clear on what the shift is we’re really asking them to make so that they can go execute. And then, as Kathryn said, pivot when conditions change with that same North star that they’re working towards in mind.
Kathryn: I have another example of what Alex was just talking about. I was once working with a foundation. and they had come up with a new three-pronged strategy. There was a head of strategy and a CEO, and most of the people in the organization did not feel comfortable or did not feel like they understood the strategy. So we were getting leadership team together and we created a set of conversations that they would have. And one of them was to have each one of their three major areas actually play back the strategy as if they really understood it and believed in it.
And each one of these three groups actually did a fairly spectacular job expressing it. The executives’ only response at that point was “perfect, so much better than when I said it myself”. And so they took all these people who said, we don’t understand the strategy, asked them to put it in their own words, and then got the reinforcement that yes, they actually had it. But the interesting thing for the CEO and the head of strategy is, if they don’t get it right, this is feedback to you, not to them.
Rick: That’s a great example, Kathryn. So Alex, take me just a little bit deeper into the role that culture plays in strategy execution,
Alex: Yeah, Rick, one thing that we see often is that organizations are thinking about strategy and culture as two separate things. Often how people are organized in organizations is you have, you know, the head of strategy/the strategy team, and then you have the people team or the people/culture team, and they often are tackling kind of separate things. We would actually argue that those things need to be tackled together. You can have the best strategy and initiatives in the world, but if the way that you’re working is getting in the way of that strategy, it’s not going to go anywhere.
The most classic example I’ve seen in a lot of organizations we’ve worked with is adopting an agile operating model where all of a sudden, we go from hierarchical kind of vertical organization to cross functional teams who are supposed to be empowered to work together closer to the customer.
All of a sudden, as a leader, when you go from vertical hierarchical model to an agile leader, your job is no longer to tell people what to do who are below you. It’s actually to push decisions down to the team and remove obstacles for them. That is a big shift in what you’re paid to do as a leader, right? You grew up and got promoted for telling people what to do, giving them the answers, and all of a sudden, you need to actually not do that, ask them better questions, and help them navigate the organization.
So that is a huge shift that is enabling the strategy, but it actually has to do with your culture, right? In any strategy discussion, there should be a piece of it that is around ways of working: What behaviors, what mindsets do we need to execute this well? What do we want to keep doing that’s really successful? And what are the things that are maybe getting in our way or will slow us down as we think about executing this new strategy?
Kathryn: I want to make one point about very transformational strategies. You learn more about what’s required over time. I remember working with one, SaaS technology company who did a wonderful job articulating the strategy. We worked with them to put it in a bit of a simulation, and we actually took it to their entire organization within a month.
Momentum was high. Enthusiasm was high. Understanding was exactly where it needed to be. And within six months, they realized that there were some misconceptions about what customer service looked like specifically. And so then you could go back and you could identify what mindsets needed to shift around customer success given this new strategy. It was not obvious when they first identified the strategy, but it turned out to be a very pivotal shift that they had to make they only got it after they’ve been doing it for a while.
Rick: That makes a lot of sense.
Kathryn: And one of the really important things that almost never gets done in strategy is trying to take the concepts and make them practical, executable, implementable. Strategy on a page, is an idea. It’s just an idea. Until people can play with it, shape it, start figuring out what would I have to do to do this.
So we work very hard, either through modeling an entire enterprise so people can see what levers they have to pull to make different changes happen, or just asking the kinds of questions that put people into the execution and implementation of it.
They have to envision themselves implementing this: either explaining it through their employees, or figuring out what initiatives they need to do in their business unit or function. And when you do that – when you take a concept and start making it feel more real – you raise the right reservations. You start getting smarter about what will be easy and what will be hard in making this happen.
And then, if you’re a senior team and you have to commit to the strategy, you have a much better understanding of what you’re committing to, right? It’s like committing to marriage after a first date. After you’ve dated for a long time, you actually have a better idea of what you’re committing to, right? It’s a little like that. You actually have the experience that says, okay, I can commit to this and I can commit to it even knowing this, this, this will be difficult. So I think it is more fair to leaders to help them really understand what they’re saying yes to – because otherwise, we’re kind of setting them up for failure.
Rick: What I’m hearing you say is until I have to try it on and deal with real tension, it doesn’t become real.
Kathryn: Yes. And, certainty is impossible. A lot of people like making plans and then they become confident of their plans. Now they’re implementing their plans in an uncertain future. I think the right mindset for leaders today is to put together plans, but be confident in their people to execute those plans, even in times of uncertainty.
The shift goes from confidence in the plan to confidence in the people. And if your confidence is in the people, what are you going to do to set them up for success? That’s what we’re talking about.
Rick: So I’m sure that there are some folks out there listening who have senior level responsibility for strategy development. And I’m sure that there are some folks out there listening who don’t, but really like what they heard. What’s your best advice for them? How could they start to influence their organization to rethinking how their strategies are formulated and executed?
Kathryn: There’s one thing that’s almost too simple to say, but I’m going to say it anyway. I actually believe that everybody in organization should understand how their work and how their priorities align to the overall priorities of the organization. And if you can’t actually see that direct link, you should question if that’s something you should be doing.
And the other part of that for a leader is if every person in the organization cannot see how they’re contributing to it, have they thought about the strategy as fully as they need to? It’s a two-part test, if you will, when a strategy or new priorities for a fiscal year come out is: can you see yourself in this future? Because if you cannot see yourself in the future, you have no initiative to go out and try to make things happen.
Alex: People in the organization have a very important view to share back up to the leaders of the organization on what they’re seeing. Feel ownership of taking a critical eye to what you’re seeing and playing back some of the customer insights or market shifts that you are seeing because likely you are seeing them differently than the executives in your organization are, and that information is really valuable to inform where the company should go in the future.
Rick: Great advice. Thank you both so much. And thanks for taking the time to sit down with us today and, really look forward to hearing more from you in the future.
Kathryn: Thanks, Rick.
Alex: Thank you.
Rick: Thanks for joining me today. It’s always a pleasure to bring to you our Fearless Thinkers. If you’d like to stay up to date, please subscribe. Bios for our guest and links to relevant content are always listed in the show notes. If you’d like to get in touch, please visit us at BTS.com, and thanks so much for listening!
