Wednesday, 11. April 2018

Hope is not a Strategy

A founder and entrepreneur of a family business in the area of the so-called «New Economy» invited me to his headquarters to obtain advice in respect to his growth strategy.

For the entire existence of the company, his sales grew steadily and robustly but there were no resources left to take the next step.

Both financially as well as measured by the structures, processes and personnel qualifications, things had not been going very smoothly at all.

After the entrepreneur outlined his situation to me, I asked him about is target vision. He made it clear that he would like to be able to delegate more. And that he wanted to create the structural prerequisites for a more professional order processing. And, last but not least, he hoped to take better advantage of their market potential compared with the competition.

Why do all that? What exactly is supposed to change? What is the purpose of all the delegating? Where do professional structures lead to? What exactly will be the result of an optimal utilization of the potential? After some initial irritation due to so many questions, the customer opened up and realized that his target vision was in reality an action plan. Where exactly these actions were supposed to lead got lost over the years and in the course of the day-to-day operations.

The differentiation between objective, strategy and solution (or action) is one of the primary factors that determine success in business. As long as the “What-for” question still delivers an answer, the essence has not been reached yet. And so the intended objective is generally not manifested anymore in actions but in values, needs or motives (e.g., satisfaction, security, success, recognition or similar themes). These values are, in turn, the motivating context in which an organization and their employees can act and ideally be intrinsically motivated. The latter will be successful if the personal goals of each individual can be brought into systemic alignment with the overall objective of the corporation. The more authoritative the objective is formulated and the more specific it is placed within its context, the sooner each team member can examine if his individual motives und needs are addressed.

In this context it is extremely important to differentiate the objective from the strategy and any actions. When a problem arises, we are all accustomed to immediately seek solutions. Simply take the following test: Ask your employee or colleague about his/her professional goals. You will get answers like, “I would like to become head of the department. I would like to work less or earn more. I would like to complete my project successfully.” All of these answers are prepackaged solutions, though, that we cling to, but that in reality are supposed to meet a more fundamental need. To lead means to ask questions, so don’t hesitate to ask: “Why would you like to achieve this?” The answers will clearly reveal new perspectives both for you as well as the employee.

In the interest of sustainability it is helpful to remind yourself again and again of the objective and validate it along the way (Is it jeopardized? Does it have to be revised?) and to align the strategy with the objective. The strategy is defined as the fundamental, long-term practice (combination of measures) of the corporation and relevant sub-areas with regard to their environment for the purpose of achieving the long-term goals (Source: Gabler Wirtschaftslexikon Online, 2018). So the strategy is about the way to achieve the objective. Based on the strategy, the binding measures can subsequently be derived: Who does what until when to allow us to stay on course und to achieve the corporate objective? This does not mean that the strategy and the objective cannot be adapted along the way. On the contrary. Leadership also includes the ability to correct the course if the adaptation is sufficiently legitimated.

The clear differentiation of corporate objective, strategy and actions will most certainly lead you to success. And concurrently you will develop a better understanding of the alignment between the corporate values as well as the motives and the needs of your employees. An ethically oriented management behavior is the natural result.

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