Tag Archive for: Value Creation

Finding Value in Your Vision

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Your vision for your career and your company should start with an articulation of the value you provide.

 

Does your vision articulate value?  It ought to.

Often, in the middle of coaching discussion with young professionals, I asked a basic question:

“What do you want to accomplish?”

The responses I receive to that question are often telling.  In some cases, I get interesting, highly functional visions of the next step in a career:

“I want to become a trusted finance leader.”

“I want to become the best project leader in the company.”

“I want to be an expert on M&A processes.”

These are visions that imply a strong value orientation.  They imply delivery of value on the way to accomplishing the vision. One cannot become a trusted finance leader without developing the skills necessary to, in fact, be a trusted finance leader.

Sometimes, though, the answer is more problematic:

“I want to get promoted.”

“I want to run a business.”

“I want to be a senior executive.”

These are visions that imply a strong status orientation.  They create ends that are status driven. One can “get promoted” under the wrong circumstances.  One can “be a senior executive” without developing the skills and capabilities necessary for the task.

Having witnessed multiple highly corrosive senior executives who were placed via the machinations of their own ambitions rather than the value they provide, I can tell you that fulfilling someone’s vision of position and status is exceptionally dangerous if that vision is not accompanied by a vision for value.

And that’s the point of this post:  Vision devoid of value is rubbish.

But, though I’ve articulated the examples above in terms of individuals’ visions for their careers, individuals aren’t even the worst offenders.  I know plenty of individuals who are great professionals but who can only articulate vision for their career as “promotion” or “a raise.”

They will be okay (if a little shortsighted).

Where the vision-devoid-of-value issue often comes up–and causes the most damage–is actually in business strategy.  We see status goals articulated as vision all the time.

“We will double the size of our company.”

“We will be number one in our market.”

“We will be a great place to work.”

These are all corporate level equivalents of “I want to be a senior executive.” They are status oriented visions.  They pass for leadership art in companies the world over.

And, they are entirely insufficient.

Shoot for specificity in the value you will provide.  Articulate a vision for that value…and then, go!

Can you articulate a value oriented vision for your career?  What about for your organization?

At WGP, our own vision statement could use some of the scrutiny I’ve suggested here.  We say our vision is to be the premier strategic advisory firm in the region.  What we really mean is to be the premier strategic advisory firm in the region because of the quality of our insights, advice, and people.  

There’s a difference.

What do you think?  How do you articulate a value-driven vision?

 

The Asymmetry of Action

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Seeking massive upside can lead you to inaction.  Watch out for “asymmetry driven inaction” in your strategic plans.

 

Sometimes you have to kiss a few frogs to find a prince.

 

In the lexicon of strategy and strategic plans, the word asymmetry is a useful one. But, it’s a dangerous one.

There is information asymmetry in negotiations.

There is asymmetry of outcomes for a strategic decision.

There is asymmetry of allocations: talent, resources, mindsets, and any other “resource” that can be allocated.

Asymmetry is everywhere. It’s the real world. We can engineer symmetry through repetition and reduction of variability, but reality is filled with imbalance, particularly in the land of business strategy.

Business strategists rarely have the luxury of making the same decision over, and over, and over, and over again. They usually have a few big decisions to make, and they have to guard them very closely.  Why?  Because the world is finite.  There are only so many customers you can piss off when trying to get your sales approach right.  There are only so many acquisitions targets you can approach with the wrong pitch before you run out of them.

True strategists face a series of one-shot games. They can learn from their shots, but each game is different. Each deal has a different flavor. In fact, if you sit in a position where you face only a continuous series of outcomes vs. a discontinuous one, you are probably not a strategist. You are a portfolio or risk manager. Those are not the same thing.  A true strategist has to account for everything before taking one shot.

And, this accounting is where the real danger of taking popular and business press too literally comes into play.

The popular press likes anecdotes, and can lead you to try to mimic anecdotes that simply don’t fit your model. And, in search of an easy “positive asymmetry,” you read an anecdote about how company X has created massive value via acquisitions.  You then go to mimic the actions of company X without understanding the strategic context or capability sets company X had to its advantage.

The academic press isn’t much better.  You read an academic study about how, on average, business transformation efforts fail.  This leads you to pooh-pooh the notion of driving big change in your organization.  “There’s too much downside.”  And, yet, the academics have only generalized from a broad set of companies without outlining the real strategic and organizational contexts at play.

So, the popular press can lead you to seek only those moments that “look” like the founding of Facebook; and the academic press can convince you that management initiative has too much downside.  You bog yourself down in “inaction” by taking both anecdotes and statistics too literally.

So what?

We all want more upside than downside. We all want massive “positive asymmetry.” It’s a natural desire. It’s analytically comfortable.  We all want certainty.  But what happens when our search for massive upside leads us to sit out the game? What happens when we choose to do nothing as a rule vs. as a strategy?

We waste time and resources. That’s what.

I once knew a senior business leader who was given a beautiful portfolio of opportunities and the sponsorship to do whatever he wanted. The problem? The guy couldn’t get out of the spreadsheet.  He couldn’t place moderate size bets that might pay off because he kept looking for bets that would only pay off.

He, therefore, did nothing. He destroyed value by stripping away valuable assets and capabilities to meet earnings targets, but never really got off the dime when it came to making possible bets.

He squandered a beautiful opportunity to grow and inspire.

Doing nothing–whether it be with your career, your business unit, or your corporation’s resources–has a cost. It has downside.

And, an easy way to do nothing is to only look for sure things–massive “positive asymmetry” in the bets you place.  In my experience, massive positive asymmetry only exists ex post.  It exists before hand only in some popular press anecdote.  The strategist who achieved it usually knows there was a struggle to get there.

They know what frog lips taste like. Go, kiss a few frogs.

What do you think? 

How To Win The Bad Times

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Winning in bad times starts during the good times.

 

It doesn’t take a much of a pessimist to suspect that the U.S. economy might be in for a reset if not for a recession in upcoming months.

I know, I know: Rates are low, the stock market is bubbly, the yield curve is normal, unemployment is at 4.6 percent, and the newspaper of record is saying that the current U.S. president is “handing a strong economy to his successor.”

In fact, things are quiet.

Too quiet.

We’ve survived for a long time on monetary stimulus pumping currency into the system, cheap debt underwriting everything from sports cars to sociology degrees, and a hefty entitlements-driven safety valve removing the discouraged unemployed from the workforce.

So, which is it?  Are we in the best of times, or the worst of times?

What do you think?

Regardless of my views on the macroeconomy (which are neither as good or as bad as I imply above…more on that some other time), I’m what you might call a micro-optimist.  That is to say that while Dickens may have described entire country economies in his tale of two cities, I actually subscribe to the notion that prosperity is exceptionally local…personal, even.

So, whether or not we as a populace face bad times, I’m a believer that you as an individual or as a business leader need not assume you are at the whim of the macroeconomy.  The best business leaders I have known are not victims of circumstance. They have through-cycle mentalities to prepare for great during bad, and to prepare for bad during great.  If bad times are looming, how do you win the bad times?

Then, if things are great, how do you have the mindset to ensure you will win during the bad times? Let me list 5 ways:

1. Ensure you win on the sales front. A rising tide lifts all boats, but it also masks a lot of foundering skiffs. If your sales efforts are doing less well in good times than they ought to be, then you have plenty to fix today. Is your sales force hitting its numbers on its talent, or on pure market beta and order taking?  If it’s the latter, then you’d better watch out when the order window line dwindles.  Go figure out how to generate and close leads in the good times.  It won’t hurt.

2. Put on your “tough times” service hat.  Yeah, I know…you are busy.  Times are good.  You may think it’s okay to ignore a few of those calls from customers or employees or potential partners because, well, you are making your numbers.  Let me tell you something:  People remember. If you want to claim that you are a high-touch servant leader, but you decide you have enough business now and don’t need to call people back after 5pm, then saddle up for a drought when the dry spell hits.  It won’t hurt you to call people back and let them know you are too busy at the moment to help.  Seriously.

3. Overinvest today in strategic marketing–to see the cracks. Without a doubt, the biggest recession excuse is “we didn’t see it coming.”  I’m not a fan of planning for recessions (or even predicting them) but am a big fan of understanding customer and end market sentiment through a hefty investment in listening. If the good times are upon you, your customers are happy, and your order book is full; it can be challenging to go ask customers or downstream buyers what they think.  It can be even more challenging to invest dollars to do so.  It won’t hurt to know whether ripples are coming.  Besides, your head in the sand–even when the sand feels good–is ignorance.

4. Take a minute out of your day to run a few scenarios. It’s an interesting facet of good times that they can cause us to stop thinking.  Still, plenty of leaders know which customers are already high risk, which facilities are already at the margin of the cost curve, and which products really aren’t cutting it.  What happens if you lose one or all?  Do you know?  What is plan b?  It won’t hurt to have a plan b.

5. Look at the market for talent.  Oooh, this one can feel scary. You as a leader should have a look at who is hiring (maybe even for you), and what kind of talent is bouncing around on the market. Have a few conversations with recruiters about where the activity is and where the softness is.  Know what kind of talent is currently in demand, and where there’s a glut. This can be both personally relevant to you (you may thank me one day, mr. or ms. executive), and professionally relevant to the quality of the team you build. Just because you aren’t hiring doesn’t mean you ignore the market for talent.  It won’t hurt.

There you have it.  5 ways to, perhaps, prepare for drought when the rain is falling.  In order to be great in bad times, you have to be great in the good times. It won’t hurt.

Go get’em.

Now, what do you think? 

 

Don’t Forget Your Change

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The focus of strategy should be on what needs to change, but too often, we leave the change behind. 

 

For those of us who still pay in cash, there is the experience of going through a modern checkout line, paying with paper money, and receiving paper money in return from the clerk, while coin-based change is chunked out by an automated machine.

Invariably, this setup requires the clerk to say “Don’t forget your change!”

Why?

Because what used to be a one-part activity (receiving change from a clerk) has now been split into two parts. This post is about not forgetting your change.

…

Allow me to outline two modes of strategic planning.

First is the mode that business owners tend to engage in–let’s just call it owner mode.  Working with owners on strategic planning tends to be very interesting and engaging for someone like me because you can dispense with the pleasantries of multi-constituency narratives and logrolling and just go straight to the spreadsheet.  Private equity firms are my favorites at this. My best private equity clients don’t want the PowerPoint; they want a well-structured and justified to-do list and a spreadsheet that outlines the costs and benefits of the action we came up with.

The same can be said for owner/operators.  A CEO client of mine who happens also to be an owner, when asked by one of his team members, “What do we need to do to start implementing the plan?,” simply said, “Why aren’t you implementing it already?”

While owners want to see justification for change, they only want so much before they put it in place: they want their change, as it were.  Private equity firms and owner/operators derive benefits from and demand near- and long-term changes in performance.

The second mode of strategic planning is manager mode; manager mode is extremely common in companies that are populated by managers who are not…you guessed it…owners.  The manager mode of strategic planning tends to be more status quo oriented, and there’s a reason for that:  current management doesn’t necessarily derive great benefit from explaining to its owners how wrong they have been over the past few years.

Face it, nobody walks into the office every day saying “Today, I’m going to do a bad job.  I’m going to misallocate resources and tamp down our sales culture with massive bureaucracy.  In fact,  I think I’ll demotivate a few people today.”

Nobody says that, not even the worst managers.  Everything happens for a reason (or at least has a story for why it happened), even current structures and processes that really make no sense. So managers tend to focus more of their time on strategic planning and justifying why they are where they are vs. why that should be blown up and rebuilt.  They entertain their boards with creative narratives. They “kill the clock” with their owners and boards so as not to confront hard things. And they build plans that are heavy on narrative but light on change, and this is especially true when it comes to the specificity of change implied in manager-driven plans.

So with those two modes of planning outlined, the enlightened strategist has to understand that effective strategic planning, especially with manager-driven strategic plans, is a two-step process: There is the step of creating the paper plan, and then there’s the step of producing the hard change that will ensure competitive endurance.

So I’ll just leave this with you:

Strategic planning from a manager’s point of view can devolve into an argument for the status quo and why change is hard, while an owner’s point of view tends to ensure a focus on change sooner, faster, and deeper. In every strategic planning exercise, there must be a moment where the planners–whether or not they are owners–put on the owner hat and test for whether recommended changes are sufficient. 

A strategic plan should envision changes to meet challenges.

Don’t forget your change.

 

The Commodity Paradox

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Why serving commodity markets could be a great opportunity to differentiate.

If you work in B2B marketing, chances are you have heard or even uttered the words ‘It’s a commodity market. We’ll never make any money’. Yet in all my years in consumer marketing, I don’t think I’ve heard the ‘c’ word once. Think about it. Grocery store shelves are creaking with products that at the base level are commodities. Take milk, for example. It doesn’t get more basic than that, yet look at all the options – different fat content, source, packaging type, shelf life, flavor. They’ve even figured out how to get milk from an almond.
While there are many differences between B2C and B2B marketing, notwithstanding the size of budgets, there are some things that B2B marketers can learn from their consumer-focused peers.

1. Know your customer
Consumer marketing companies spend millions of dollars each year keeping up with their customers. You may not have a huge research budget, but having a deep understanding of your customers/potential customers is critical if you want to differentiate your offering. It goes beyond knowing what’s important to them. The answer to that is almost always ‘price’. You need to scratch beneath the surface to truly understand their decision-making environment, motivations, experiences and pain points. They may be operating under the constraints of their organization, but the key to identifying and unlocking true value is through understanding your customers as humans versus organizations. This will allow you to develop and communicate offerings that resonate.

2. Think outside the widget
Consumer marketers also remember that there is more than one ‘P’ in the marketing mix. You may be manufacturing widgets, but your customer probably doesn’t think in terms of widgets. They are trying to get a job done and if you are armed with an understanding of their world, their challenges and what they value, you can sell them a solution to their problems instead. So if their job is to keep a production line running, you could, for example, offer ‘guaranteed up-time’ through a maintenance and repair package. If they value speed and convenience, online ordering and expedited shipping may get you ahead of the competition. Concerns over a retiring talent-base could be addressed through instant tech support for less experienced employees etc. etc. There are many levers that you can pull outside of the product itself

3. Sell the value – consistently
Once you understand your value proposition, every customer touch point should support it, consistently. McDonald’s and Starbucks both sell coffee. However, the retail environment in Starbucks probably makes you feel better about blowing $4 on a cup of joe. If you are selling the value of speed and convenience, having someone available to answer the phone promptly is probably a good idea. If you are selling technical superiority, ensure your most knowledgeable staff are in front of customers and arm them with the appropriate skills to identify the needs and sell the value accordingly. As an example, in order to compete in the over-crowded arena of IT services, IBM pulled PhD’s from their R&D team and put them on sales calls, then began to offering PhD brainpower to solve customer problems.

This is clearly not easy, otherwise there would be a lot fewer commodity markets. It takes a different mindset, a lot of confidence and an appetite to invest for long term growth, underpinned by a commitment to executional excellence. However, if you can crack the code, there are almost certainly customers out there, willing to pay premium for a product or service that makes their life easier.

So are you ready to be a Fruit Loop in a world full of Cheerios?

What are you good at?

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Just another post on playing to your strengths…

 

I am 6 foot 7 inches tall and a smidgen under 300 pounds; you might not know it to look at me, but I’m not going to be a gymnast anytime soon. While I may dream of being a dancer or a distance runner, it’s just not going to happen.

And, while businesses can certainly make pivots almost as drastic as those I outline above, far too many executives talk about them as though they are simple moves.

In our work on business strategy, I often get asked the question “How do we take our company in an entirely new direction?”

It’s a good question, and one that disciplined managers should always explore, at least periodically. But it’s also one that is fraught with blind alleys and red herrings.

Why?

Well, for one, when people ask about what they can do that’s new and different, they’re often in the throes of being seduced by merely what is popular, whether it’s what’s popular in the press or among the management team itself.

The issue is that what’s popular may never fit your strengths—if you’re a 300-pound offensive lineman, you have to ignore the wide receiver who’s getting all the accolades, or at least appreciate both him and yourself for what you both are.

So when companies need to make a significant strategic pivot, the most important thing to do is inventory company strengths, including specific value propositions, talents, expertise, or operational capabilities.

We do this aggressively in our client strategy work. Why?

Because organizations exist for a reason: They exist to deliver on a mission or set of missions that were devised sometime in the past. The organization itself has grown up around those missions, and expecting an organization that has grown up around a specific set of missions to drastically pivot away from many of those missions at once is foolish.  Well, if it’s not foolish, it’s at least naive.

I tend to simplify strategic pivots into three categories:

– Category one is a strategic pivot to a new customer base. This type of pivot requires understanding a new set of customer needs, gathering a new set of insights, and typically adjusting products to meet those needs.

– Category two involves pivoting into new technological fields. This type of pivot typically requires research, product development, and specific new skills in order to deliver on new technologies.

– Category three involves pivots to new delivery models. I typically phrase this as “new routes to market.” This type of pivot may seem easy until you’ve been in a company that has attempted to pivot from a direct sales model to a distributor sales model or vice versa.

Where the trouble starts is when management desires a pivot on multiple categories at once. Pick one category and you have your hands full; pick two and you have the recipe for being overwhelmed; pick three, and unless you’re forming a new company, you’re likely to fail. Why?

Because you have to overcome the inertia of an existing organization.

The innovation literature is rife with potential “solutions” to this multi-category pivot problem, ranging from isolated teams to internal start-ups. I won’t go there with this post, but what I will say is that you must understand whether you’re making a multi-category risk in order to know the risk you’re likely to take in the real world.

Sure, plenty of existing companies have entered new markets with new customers, new technologies, and new distribution models.  But in making that observation, we have to be careful not to ignore a significant survivorship bias–far more companies, I would argue, have failed at multi-category pivots like those described.  So, you’d better watch out!

The good news is, in the business world, a lineman can sometimes become a ballerina–it’s just important for leadership to know what it takes to be successful before starting.

I would love your thoughts on this topic. Please engage below.

The Most Important (and Annoying) Business Skill

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You have to know the numbers. 

 

It’s always the people who say “now, wait just a minute.”

You probably know them… they are the numbers people.  They take the arm waving, visionary ideas…hit the pause button…and ask the quantitative question.

It might be financial:  How can we justify those kinds of margins?

It might be operational:  How can you assume we can produce that many widgets with only our bare hands?

It might be organizational:  What number of sales people are required to meet those projections?

But the question is placed.  And, if it’s not, you want it to be.  The numbers are important for a reason…they form the most testable type of hypothesis.

A season of advice…

This is the time of year where I inevitably get the chance to talk to younger people starting out their careers.  They might be finishing up college and looking for a job, or just referred my way for ideas and guidance.  If that gives you a shiver, then let me put you at ease:  My advice is simple.

It’s this:

Use your early career to learn the numbers.  Learn how the basic financial statements work, and how things like margins and asset turns determine the performance of a firm.  Learn to model them.  Get smart on the quantitative drivers of markets. Understand how to represent a product’s quality and positioning in terms of market share and margin.  Know the numbers.

I give this advice for one reason:  The strongest executives I know, whether they are sales oriented, ops oriented, or otherwise, understand finance and quantitative drivers of business.  They understand that the numbers show progress.  And, unfortunately, it can be tough to get training on the numbers later in one’s career.  A lot of executive fake it, of course, but people who know can see it.

Learn the numbers early so that you can go through the rest of your career without the fear of being found out.

But, if you take my advice…

Knowing the numbers will saddle you with one annoying habit.  It’s the “wait just a minute” habit that I started this post with.

You will, in some circumstances, become the “annoying” presence who always attempts to ground the conversation in quantitative reasoning.

The New York Times recently published an article about how much more creative the accounting in public companies has become.  As companies insist on more and more non-GAAP representations of their operations, the need for people to know the difference heightens.

But, when you know the difference, it can make for some uncomfortable discussions with your less quantitatively grounded brethren.  One of my favorite examples, albeit a sad one in historical context, is when Enron CEO Jeff Skilling famously called an analyst an “asshole” for questioning accounting standards.  The annoying “asshole” was, in retrospect, exactly right.

More than sales, more than marketing, more than anything else, know the numbers.

Okay, then know sales. Sales is important next.

As always, I’d love your thoughts on this one.

 

It’s All Moneyball…

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The search for value is the key to strategy.

 

Michael Lewis’s Moneyball never did provide the answer to the question of where value is in our own lives, but it certainly inspired us to look.

Remember Moneyball?

It was a book by Michael Lewis… a guy who has made a career out of taking mundane subjects (like bond trading, high frequency stock trading, left tackles, and baseball scouting) and making them imminently interesting by melding fantastic stories around the topics.  You may have recently seen one of his works come to the big screen in The Big Short.

Moneyball was Lewis’ take on the search for value and the need to avoid “conventional” wisdom…especially when one faces constraints that conventional thinkers do not.  the story was simple: The Oakland A’s were an anomaly.  They won more games than they were supposed to when their payroll was factored in.  That’s right… dollars in, wins out was considered to be the metric.  Why?  Because all scouts were assumed to be looking at the same components of talent: a traditional view of the “tools” that ballplayers had been evaluated on for years.

Only something happened…someone, somewhere realized that the value of a ballplayers in terms of the game itself wasn’t necessarily correlated with the old school way of looking at things.  Turns out that players who were unorthodox when measured by traditional metrics but really effective at doing things that got them on base more often were actually undervalued by those who scouted and paid ballplayers.

In other words, a key trait was undervalued in the market, and a team like the Oakland A’s that would focus on that trait could find valuable ballplayers with a lower pricetag.  That translated to wins for fewer dollars.

This insight is brilliant for anyone in business: When everybody else is paying for traits, it’s good to try to pay for results.

This is true for my friends who pay up for educational pedigrees that don’t translate to results.

It’s also true for my friends who go after market trends because they are “hot.”  Anytime there is a clear stampede to something, ask yourself why. Is there value left in the equation?

In a world of hype and conventional wisdom, have the patience to seek value.

What do you think?

Craig Long: SHOW ME THE MONEY!!!

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Here’s a link to a great post on LinkedIn Pulse by a former colleague and all around great guy, Craig Long.

YOUR LINK

Craig provides some great insight into what it takes for operational programs to bridge the gap from operational impact to financial impact.

Good reading for all!

Geoff

It Ain’t What You Put Into It That Counts

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A foolish focus on the inputs can endanger your strategy, company, and career.

 

Have you ever heard someone say something like,  “I’ve worked 75 hours this week.” (Of course you have.)

Have you ever heard a manager or business leader expound on the dollars spent on something?  “We’ve spent ten million dollars on implementing this effort.”

Have you ever seen an approach to business strategy that focused solely on the available inputs?  “We have two factories, the strategy has to focus on those.”

Worse, have you ever witnessed an approach to strategy that only focused on organization, infrastructure, or edifices?  “Let’s build it and then figure it out.”

I’m betting you’ve seen at least one of these.

And really, what’s wrong with focusing on how much work you’ve done, or the money you’ve spent, or the assets you have in place today, or the capital you could deploy tomorrow? Here’s what:  They are all inputs.

A strategy, whether for wars, countries, companies, or individual careers, is about ends, outcomes, objectives.  A strategy without an objective is a dance.  It can be beautiful, but it is ultimately just a play…kabuki at its finest.

When “being strategic” means focusing on the hours you’ve worked or the dollars you’ve spent, you’ve probably already lost the battle.  Why?

For the professional individual, a focus on how many hours you’ve spent doing your job is frankly just silly.  I have a healthy respect for people who work hard; I really appreciate it.  However, if a person works an 80-hour work week when a smarter person would work only 50 and get the same result, why is the input of 80 hours relevant?  When people start to focus on time, particularly in knowledge work roles (we aren’t talking the factory floor here, folks), the organization will suffer.  It usually signals a transition in the conversation from the “responsibilities” of a role–generate an output that has value–to the “rights” of the individuals–work a reasonable work day.  The conversation for an individual ought to be about the product of the work, not the time spent doing it.

A wise senior leader of a global consultancy I know well once told me, “If you can’t consistently do this job in 60 hours a week, you may not be smart enough for the job in the first place.”  That’s a pretty interesting perspective.  A true pro focuses on the outputs of their work and negotiates the resources to ensure the right output at a reasonable input of their own resources.

For companies and senior leaders, the problem is a little different.  Business strategy is about deploying resources to achieve an objective.  Some senior leaders are exceptionally good at these sorts of things without even thinking about it, but some, frankly, are not.  The ones who are not good at it tend to use strategic planning as a reductionist exercise to meet “non-strategic” objectives–budget numbers, financial incentives, etc.–that in all reality don’t tie to the health of the company as a whole. A focus on inputs at a company level usually comes in the form of binding constraints that aren’t really constraints at all.

Instead of asking the question, “What would it take to win that account from that competitor?”, they say, “How can Ralph from accounting take on this new sales role and try to get some wins?”  When hunting elephants, bring enough gun.

To wit, managers use only the talent and capabilities they have today in thinking about their business strategies.  They focus only on the financial resources they have at this moment to achieve their objectives.  They allow themselves to focus on optimizing their existing pie charts of businesses, assets, resources, talent, etc. vs. thinking about what the future pie can look like.  In other words, they focus on the inputs.

So what?  

For yourself, watch out for a creeping sense of martyrdom about how much you put into your job; instead, focus on what’s coming out of it.  Shift the focus to results attained and only then zoom in on what it would take to sustain them.

For your company?  This is tougher.  First, management teams have to articulate practical business objectives for a strategy to be real.  “Take hill 1221 from the enemy” is a strategic objective; “cover 2500 meters and burn only 5,000 gallons of fuel” is not.  Yet we allow companies to run on goals and metrics (or budgets) that look like the latter, and in some cases, they operate with management not even knowing what hill to take.

All this is to say that it’s healthy to ask yourself whether you are too focused on the inputs of your strategy and not enough on the outputs.  It is not, however, to say that constraints don’t matter; constraints are important, and they should be reflected in any strategy.  To use my analogy above, a strategy that says “Take hill 1221 from the enemy using only a cigarette lighter, five rubber bands, and a Daisy bb gun” is what I would call a good start toward revising your objectives.

On hill 1221, that might get you killed.  In your company, such ignorance of constraints might just get you fired.  It’s the strategist’s job (and we are all strategists at some level) to balance strategic objectives with degree of difficulty and possible resources (not resources on hand…important distinction, that).

A foolish focus on the inputs can endanger your strategy, company, and career.

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