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Book review: Good strategy / bad strategy

This review first ran in the Dec. 19th edition of The Hamilton Spectator.

Good Strategy Bad Strategy: The Difference and Why It Matters

By Richard Rumelt

Crown Business

$33

Not to put a damper on the holiday season but what’s the worst that could happen to your organization in 2012?

Maybe it’ll be the year of the exodus, with customers and clients defecting to competitors and upstarts. Maybe 2012 will be the year of disappearing margins thanks to soaring costs and sinking revenues. If you’re government funded, brace yourself for the year of fiscal restraint and budget cuts. This could also be the year that disruptive technology renders your business model obsolete. Or maybe the threat will come from within, whether it’s early onset of organizational inertia or wholesale disengagement among the rank and file.

With any luck, your strategic plan makes passing mention of the stormy weather headed your way. If you’re truly blessed, your plan marshals your organization’s greatest strengths to tackle the biggest threat you’re about to face in 2012.

But if your plan’s an unholy mess of muddled motherhood statements and an exhausting laundry list of competing projects and priorities, you’re ringing in the new year saddled with a bad strategy.

“A good strategy does more than urge us forward toward a goal or vision,” says Harvard educated author and management consultant Richard Rumelt.  “A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them. And the greater the challenge, the more a good strategy focuses and coordinates efforts to achieve a powerful competitive punch or problem-solving effect.”

Rumelt says the problem with bad strategy is that it serves up a big-picture overall direction divorced from any specific actions. There’s no competitive punch. This creates a yawning chasm between strategy and implementation. “If you accept this chasm, most strategy work becomes wheel spinning. A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component.”

Along with a failure to face the challenge at hand, bad strategy is stuffed with fluff or what Rumelt calls inflated and unnecessarily abstruse Sunday words. Fluff is used to create the illusion of high-level critical thinking. The obvious gets restated with a heavy dose of buzzwords.

Rumelt warns we’re susceptible to leading our organizations down three well-travelled paths to bad strategy.

The first is a failure to choose. Good strategy is as much about what your organization decides not to do as it is about what it chooses to do. Any coherent strategy invests resources toward some ends and away from others. To have a focused strategy, you need to make tough choices and hard calls. Egos will get bruised. Pet projects will get shelved. Fiefdoms will shrink. The refusal to choose is how you wind up with an unworkable laundry list of projects that scatter scarce resources to the wind.

“A long list of ‘things to do’ often mislabeled as ‘strategies’ or ‘objectives’ is not a strategy,” says Rumelt. “It is just a list of things to do. Such lists usually grow out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done. Rather than focus on a few important items, the group sweeps the whole day’s collection in the ‘strategic plan’. Then, in recognition that it’s a dog’s dinner, the label ‘long term’ is added so that none of them need to be done today.”

Along with an inability or unwillingness to make hard choices, a second pathway to bad strategy is the siren song of strategy templates peddled by an army of consultants and authors. These templates have organizations fill in the blanks for a unique vision of the future, a high-sounding mission, non-controversial values and some aspirational goals masquerading as strategies. “This path offers a one-size-fits-all substitute for the hard work of analysis and coordinated action,” says Rumelt.  “You will find pious statements of the obvious presented as if they were decisive insights.”

And the final common pathway to bad strategy is what Rumelt calls New Thought. It’s the mistaken belief that all you need to succeed is a positive mental attitude. You know you’re a New Thought follower if you have motivational posters on your office walls reminding you to reach for the impossible or that quitters never win and winners never quit.  

New Thought followers are also big on the absolute need for everyone in an organization to fully commit to a shared vision. But Rumelt says ascribing the success of companies like Apple “to a vision shared at all levels, rather than to pockets of outstanding competence mixed with luck, is a radical distortion of history.”

A belief that you can think your way to success is a form of psychosis says Rumelt and one that he cannot recommend as a sound approach to good strategy. “The doctrine that one can impose one’s visions and desires on the world by the force of thought alone retains a powerful appeal to many people. Its acceptance displaces critical thinking and good strategy.”

This is a brilliant and challenging book and one of the best from 2011. Rumelt is wickedly smart, pulls no punches and doesn’t suffer fools gladly. His book is also a must-read if you want to rewrite your strat plan and better prepare for the risks and opportunities headed your way in 2012. Make this a last minute addition to your holiday wish list.

 

Book review: Persuasion

This review fist ran in the Dec. 5 edition of The Hamilton Spectator.

Persuasion: A New Approach to Changing Minds

By Arlene Dickinson

Collins ($32.99)

A neighbour is up against the same challenge our family faced a few years ago. It was a challenge that put our powers of persuasion to the test.

We live in a neighbourhood where a bylaw blocks the conversion of family homes into monster houses overrun with students.

But the bylaw, with its variance application form, $1,040 fee and committee hearing, can easily unnerve, discourage and dissuade families who want to give their postwar bungalows a much needed extreme home makeover.

We loved the neighbourhood so we opted to go through the process. A neighbour on another street opposed our plans to add a second storey and got a few other folks to write letters of opposition.  

We read those letters for the first time while waiting to go into our committee hearing. Our neighbour was waiting too and brought along hired help to shoot down our plans. During our hearing, the committee asked if we’d reconsider and scale back our renovations. We were told to come back for a second meeting where a decision would be made after committee members had paid a visit to our home and talked amongst themselves.

And that’s when I decided to get persuasive.  I went door to door, getting every homeowner on our street to sign a petition supporting our proposed six figure investment in their neighbourhood. I pulled together a presentation with pictures of all the two-storey homes on surrounding streets. In my cover letter to the committee, I said our family would be on the move if the renovation wasn’t approved. We’d take up residence and pay taxes in Burlington. And I’d make a point of handing the keys over to one of the out-of-town landlords who were forever calling and writing with offers to buy our house sight unseen.

We got the green light to renovate. We spent a small fortune and put down roots. A few other neighbours with growing families have done the same.

As I discovered, there’s nothing that sharpens the power of persuasion more than a challenge to the hopes and dreams we hold for our families.

That same challenge worked wonders for author, marketing expert and Dragon’s Den co-star Arlene Dickinson.

Dickinson was 16 when she graduated from high school. She got a job instead of going on to college or university. At 19, she got married. At 27, she was raising four kids and working a string of jobs in a small town while her husband went to university. When she was 30, Dickinson had an affair that ended her marriage, got her excommunicated from the Mormon church and separated her from her children.

The family court judge told Dickinson that if she wanted full custody of her children, she’d need to get a place to live and prove she could financially support her kids.

“Shock, anguish, grief, remorse – those words don’t even begin to cover how I felt,” says Dickinson. “I remember weeping on my dad’s couch for days.”

Fortunately her father was a great persuader. “He helped me understand that this was the pivotal moment in my life, the moment that would determine what kind of future my kids had and what role I would play in it. If I gave up on myself, I was essentially giving up my kids for good.”

A stint selling ads for a Calgary TV station led to an offer to join Venture, a start-up marketing firm. Ten years after her father persuaded her to get off the couch, she became CEO. And 13 years after that, she was starring on the Dragon’s Den.

Dickinson shares her story to reinforce the importance of being authentic.  “You don’t need to tell others your life story to establish authenticity. But you do need to be honest with yourself, take responsibility for your choices and own your weaknesses as well as your strengths. When people feel they’re dealing with a real person who isn’t hiding behind excuses or a mask, who’s presenting a face to the world that’s genuine, they know they’re dealing with someone they can trust.”

And that trust is key to principled persuasion. Along with being true to yourself, you must be truthful with others. “Long term, honesty isn’t just the best policy. It’s also the most persuasive one.”

Dickinson says persuasion is a great test of character. What we’re willing to do and say and how far we’ll go to convince others speaks to our strengths and the reliability of our moral compass.

Dickinson also gets into the mechanics of effective persuasion.  Before you make your pitch for a new job, venture capital or a second storey addition for your home, you need to prepare. The will to prepare trumps the will to win when it comes to persuasion.

“At least half of what makes you persuasive occurs before you ever even open your mouth. Before you utter a word, you need to prepare, you need to rein in your ego, and you need to figure out what’s driving the other party. What’s motivating them? What do they want? How do they view the situation?”

Dickinson offers a wealth of practical advice and hard-earned wisdom on how to change minds. “Everyone has potential and is capable of realizing it. Becoming a good persuader is a great start. That’s a skill that can take you far.”

Dickinson is proof of that.