Distillations in this newsletter: Strategy governance from the boardroom to front-line teams; Engaging middle managers in strategy; Chain of beliefs in strategy; Tesler’s Law of the Conservation of Complexity; Chesterton’s Fence.
STRATEGY DISTILLED:
A monthly concoction of insight, learning and things you might have missed for anyone who works on strategy, works with strategy or just loves strategy.
Would you rather listen to this newsletter as a podcast?
_____________________
This month …
- Strategy governance from the boardroom to front-line teams.
- Engaging middle managers in strategy.
- Snippets on strategy you may have missed: Chain of beliefs in strategy; Tesler’s Law of the Conservation of Complexity; Chesterton’s Fence.
If you enjoy reading this newsletter, don’t forget to forward it to friends or colleagues who might also find it of interest.
Was this forwarded to you? Sign-up
_____________________
Strategy governance from the boardroom to front-line teams
Many organisations think that governance is what determines the rules of engagement between the board and senior leadership teams. The meaning of the word suggests it is much broader in its scope. To ‘govern’ is to steer, to direct, to control, influence, regulate or determine another’s action or the course of events, to guide or lead in a direction or towards a destination, to administer, to be responsible for, to be held to account for and, in turn, to hold others to account for the outcome of actions undertaken. Many powerful voices in strategy, such as Henry Mintzberg, Amy Edmondson, Gary Hamel and Kim Scott, have suggested that strategy governance needs to be applied across the entire organisation.
In the Strategy Manual, I offered a practical approach to making this happen. Focus first on the executive governance of strategy – how are the board and the senior leadership team going to work together, towards strategic success, to serve the best interests of the organisation? Then focus on the working governance of strategy – how do we ensure people and teams across the entire organisation know about strategy, are committed to it and are both empowered to contribute to its success and held accountable for that contribution?
Jurriaan Kamer of The Ready nudged this thinking a step further by introducing the concept of ‘participatory governance’. Here is how he described it:
‘The default assumption in most organizations is that we don’t have the right to do anything unless we’re given permission. Over time, red tape builds up until hardly anything can be done. Only senior managers are able to act freely and make decisions on behalf of the people doing the work. Everyone else, unauthorized to solve their own problems, develops a sense of apathy and learned helplessness … But there is an alternative. Progressive organizations ensure that everyone has the freedom and autonomy to use their judgment to serve the organization’s purpose. Their default assumption is that you can do anything unless a specific policy or agreement prohibits it. In order for this to work, it must start from a position of trust. Progressive organizations distribute authority as much as possible to teams and individuals who work closest to the market or customers, where the action and the information are. Teams can then take full responsibility and true ownership for their work and their way of working. As a result, there is more organizational learning and better performance’
So, here are some provocations on strategy governance:
- Discuss it as a senior leadership team – do you all have a shared understanding of how you want to govern strategy across your organisation – and is that what you have in operation now?
- How do your middle managers and front-line teams feel about strategy governance? Do they think they are well enough informed about strategy and how they could contribute to strategic change? Are they empowered? Do they feel they are actively participating? Do they want to contribute more than they currently feel able to?
- What needs to change? What specific and meaningful first steps could be taken immediately? Who needs to inform and steer the journey towards better strategy governance? How will we know when we’ve done enough?
_____________________
Engaging middle managers in strategy
Organisations of any significant size have middle managers. They report, directly or indirectly, to senior executives and they line-manage, again directly or indirectly, front-line teams. They have the unenviable position of being ‘shot at from all directions’. Their objectives come from above: a strategic change here, a stretch target there, an efficiency gain elsewhere. And as they work out how to achieve these objectives, they feel the sands shifting beneath their feet as their front-line teams seek new, improved ways of working just to maintain current performance. The working life of a middle manager is typically demanding, multi-faceted and can feel high-pressure and stressful. Perhaps not surprisingly, many middle managers have an attitude of ‘if it ain’t broke, don’t fix it’. And this, for an executive team seeking strategic change, can look like the frozen middle slowing down the rest of the organisation.
Not surprising, then, that NOBL’s recent newsletter focused on how to win middle managers over to the need to change. The key lessons for senior executives that I took from their article were:
- Start with why. Make sure middle managers know why change is needed and how the entire organisation will benefit from (or possibly depends upon) the proposed changes.
- Listen carefully as they explain what these changes mean for them. Make sure they feel psychologically safe before they start. And make sure you are aware of the full implications of the changes – don’t let them gloss over or diminish how much impact it will have on their work.
- Help them take ownership of these changes. Maybe rehearse how they might explain these changes to their teams. Make sure you both end up with a clear understanding of the part they will play in contributing to the overall organisational change.
- Clarify what, if anything, the middle manager needs from senior leadership to make these changes happen. Approval to change standard operating procedures? Authorisation to experiment and, occasionally, to fail? Cooperation from other parts of the organisation?
- End up with explicit (ideally written and signed-off) agreements about expectations, next steps and timetables. Be clear about minimum expectations. Not every middle manager needs to become a vocal champion of change, but they must never be actively sabotaging changemaking.
_____________________
Snippets on strategy you may have missed
Chain of beliefs in strategy
In marketing there is a concept called the chain of beliefs. For a business-to-business (B2B) service, it might run something like this. I believe I have a problem in my business, and I believe this problem is damaging. I believe a certain type of service will help me resolve this problem. Of all the services I have found of this type, I believe that service X offered by company Y is well-designed and the best value-for-money. I believe that purchasing service X would be a cost-effective investment for my business. This chain-of-beliefs thinking has, in my view, a valuable role to play in strategy, too. Seldom is a strategy based on a single belief in isolation. More often it is a chain of beliefs, like this. We believe we operate in a market that will grow substantially over the next 5 years. We believe we are in a good position to capture a lot of this growth because we are already well-established in the market. We believe the key to our future success is innovation: to broaden our offerings and hence capture a bigger share of the market and to leapfrog our competitors in terms of our value proposition and hence move closer to market leadership. The advantage in thinking in this chain-of-beliefs way is that it connects your strategic aspirations to what you take to be the facts of your situation. It makes challenges to your strategic propositions much more focused – which part of the chain do you dispute? It also provides a much more structured way to present strategy-as-hypothesis.
Tesler’s Law of the Conservation of Complexity
Many strategists complain of the complexity of business systems and processes, especially those constrained by legacy systems. Before diving headlong into any programme of radical simplification, however, it is worth remembering the wise words of Lawrence Tesler. Co-inventor of copy-and-paste functionality, Tesler was a computer interaction specialist at Xerox, Apple, Amazon and Yahoo! – he died in 2020. His Law on the Conservation of Complexity proposes that complexity is like energy. It cannot be created or destroyed, only moved somewhere else. As an example, from his own area of expertise, a product or service only becomes simpler for users, if engineers and designers have worked a lot harder to bring that simplicity about. Another side of Tesler’s law is that almost every system I need to use for my work could be made a lot more simple whilst still meeting my needs. If, however, it was made as simple as possible for me to use, it might become a lot more complex for everyone else to use. So, from a strategy point of view, be cautious in committing to wholesale simplification of complexity. And if you do decide to make such a commitment, be sure to specify simplicity for whom, and at the expense of whom, in producing this simplicity.
Chesterton’s Fence
Chesterton’s Fence may also provide a useful cautionary tale. GK Chesterton, in an essay in 1929, asked us to imagine finding a road with a fence across it that seems to serve no apparent purpose. Let’s tear it down, you might think. But if you don’t know why it was put there in the first place, you won’t understand the potential damage that might be done by removing it.
_____________________
Goal Atlas runs workshops and sprints to help your strategy work better across your organisation. Get in touch if you think we might be able to help.
_____________________
If you enjoy reading this newsletter, don’t forget to forward it to friends or colleagues who might also find it of interest.
Was this forwarded to you? Sign-up