If your organization is not delivering the results you expected, maybe one factor holding it back is a lack of razor-sharp precision.
Most business leaders would benefit from sharpening their strategies: employing more clear language (calling a sword a sword), more accurately defining strategic priorities and objectives. But few actually do it.
For example, most financial services companies profess to be “client-centric”, but very few actually explain what that looks like. And if you survey the organization and ask how this principle of “being client-centric” applies to practical matters, you will obtain very different answers.
There are some good reasons why business leaders do that:
- Investing in that additional effort to clarify may seem like an investment with no or negative return. For example, leaders who want the organization to invest in a certain business may find that their primary objective (obtaining the approval) is more easily and quickly achieved it they keep some room for maneuver in their proposals and are often praised for “being strategic” or “high level”. Additional specificity (like naming the businesses that will de-prioritized) may cost the buy-in of a critical stakeholder.
- That additional clarification may seem to make commitments harder to achieve. For example, if the organization’s goal is to grow its middle-market, that seems easier than growing by the same amount focusing exclusively on middle-market professional services firms. If the team misses its sales targets on one segment, they can make up in another segment. Also, some degree of vagueness allows leaders to evaluate commitments after the fact with the interpretation most favourable to them.
- The more these concepts become a shared language, the more people will assume that others interpret it in a similar way than they do. “Why discuss what it means to be client-centric’? Our organization has been ‘client-centric’ for years!”
- Precision seems incompatible with uncertainty and akin to micro-managing. It is good risk management to acknowledge that risks and uncertainties will produce a variance in any future we forecast. The more precise a plan is, the more likely it will fail.
However, obtained this way, buy-in is fickle, commitments are uninspiring and internal alignment is illusory.
For example, a client was considering a risky acquisition. The target had seen years of mismanagement and a large number of their customers were at high risk of defection. Our due diligence revealed significant risk concentrations which suggested two potential approaches to a post-merger integration plan: one in which the acquirer focused on minimizing loss of customers during the acquisition and one in which it put the lion’s share of its resources to revert the situation with the largest, most dissatisfied customers.
The second approach clearly would produce more value: the value of the largest unhappy customers more than offset all others in the portfolio. The problem is that this decision involved some hard choices: this plan would probably lead to the defection of a large number of small customers. Traditional KPIs, focused on the number of customers, would be hit hard and the president of the acquirer would be spending the following year explaining to the board and the leadership why they were losing customers they paid for and why that was a good strategy.
Adopting this approach could not succeed with a half-hearted commitment. He would need to be crystal clear about what the company would do (e.g. they would focus on the largest unhappy customers), what it would NOT do (e.g. they would NOT address the pain points of smaller customers, at least in the first year) and what he expected to happen as a result (e.g. they might lose a large number of small accounts but would preserve almost all of the critical high-value ones).
Do you want your organization to achieve legendary status? Deliver massive growth and value? You will need a razor-sharp vision, strategy and plan, one that inspire the organization with a single view of what needs to be done.
