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ОглавлениеIn this book, you’ll learn how to do two key things: first, how to show up and be perceived as a strategic leader. Second, you’ll learn how to take your strategic behaviors and apply them through your organization for stronger results. We wrote this book for leaders and aspirational leaders who want to get to the next level. You’re in a leadership role or will be soon, but you need to do something to improve and get to the next level. By improving your leadership and showing your results, you will get there.
What Happens When Strategic Leadership Is Missing?
It’s often useful to define a concept by talking about what it’s not. In an organization without strategic leadership, everyone stays in their own silo. People keep their heads down and get their jobs done without an understanding of why they’re doing what they’re doing. They may work extremely hard, but they’re not intentionally applying their efforts to the things that will drive the company’s desired outcomes. Waste is rampant as people fail to communicate across disciplines, and the wheel is frequently reinvented in multiple places. Layoffs feel random because the bosses don’t know who is really contributing to business results. Meetings are long and unproductive as participants show up late and unprepared, and then bore each other to tears with irrelevant information. Pet projects receive undeserved attention while difficult change is overlooked because it’s unpopular or too hard. Everyone chases the shiny, new, innovative decisions, to the detriment of what the organization does well.
We’re going to give you two examples of publicized situations where strategic leadership was sorely lacking. When you’re at the strategic level, your decisions are very often made on a public stage. When you make a mistake, there can be huge consequences.
Diana at McDonald’s
In the early 2000s, McDonald’s stock tanked. The company had just made several acquisitions of other restaurants that took the organization away from its core business of running a unified, well-loved brand experience. As a result of the acquisitions, McDonald’s had lost focus on what we had previously done so well—that is, we lost focus on the McDonald’s customer.
I was new to the home office at this time. In fact, I had been there a grand total of two weeks. The CEO, Jim Cantalupo, had retired but was brought back to save the company. His first order of business: meet with everybody in the home office who had recently come from the field. He wanted to know what was really going on out there. I nervously shared what I had so recently seen happening in the restaurants: they were dirty, quality had gone down, and we were not listening closely enough to customers. Crew members weren’t even allowed to take orders from customers asking for a different condiment on a signature sandwich.
Cantalupo eventually turned McDonald’s around by shedding the new acquisitions and focusing on what we could do well: listen to customers and provide an experience that would make the restaurants their favorite place to eat and drink. In this case, a strategic, big-picture view meant understanding that the company had gone too big with its strategic direction and reining in the innovation and growth until the core of the business could be strong again.
Whole Foods
Not long after Whole Foods was acquired by Amazon, customers began noticing empty shelves. A lot of empty shelves, actually. Photos of produce sections with only a stray lettuce leaf or onion peel trended on Twitter from customers in some of the largest markets in the U.S. Customers also complained publicly about rotten and rancid products and assumed Amazon was to blame. The problem, as it turned out, began before the Amazon acquisition.
Business Insider acquired a copy of a Whole Foods manual describing order-to-shelf (OTS), an inventory system designed to “help Whole Foods introduce more automation into its inventory management system by streamlining food buying and other store-level decisions.”1 The system appeared to have the opposite effect, along with a crushing impact on employee morale. In the past, store employees could fill holes on shelves with products they knew were strong sellers in their stores, keeping the shopping experience appealing. Under the new system, the manual instructed employees to leave holes empty, helping “ensure that OOS [out-of-stock] items get reordered because the hole is visible.”2 Furthermore, a point system penalized employees for any products that weren’t in the proper shelf position, with the potential for department managers to lose their jobs over too many infractions.
In many of the articles covering this story, employees are unnamed due to fear of being fired. In the past, Whole Foods has won accolades as a top employer due to its strong culture and valuing of even the lowest level employees. The order-to-shelf system is another example of a short-sighted decision from the top that wreaked havoc across the organization. By taking away the autonomy of its store employees, Whole Foods created a public relations disaster for itself. Time and again, we’ve seen examples of leaders who fail to value the employees throughout the organization, and as a result they inevitably see their share prices tumble.
What’s the secret to strategic leadership? It’s the ability to see the big picture and think through decisions in a way that connects to the right actions and gets the right results, taking the company where it needs to go. In spite of change all around, strategic leadership never loses its value.
We wrote this book for the people we consult with, the people we coach, and even for the people who we ourselves were earlier in our careers: leaders who need to do something different to take themselves and their organizations to the next level. You may be a high-potential employee, used to succeeding and performing well. You want to win, you want to lead, and you want to drive real, measurable results in ways that matter. You’re seeing other people around you succeed and be promoted while you stay in the same place. What’s the difference between them and you?
What’s the secret to strategic leadership? It’s the ability to see the big picture and think through decisions in a way that connects to the right actions and gets the right results, taking the company where it needs to go.
Some people are visionaries. They’re fired up by new ideas, excel at having a macro point of view, and want to race ahead to implement a grand vision. Others are detail-oriented and love being in the weeds with specifics and data, working to understand the intimate details of how work gets done. The world needs both types of people. Strategic leaders harness elements of both personality types by becoming aware of their own strengths and then creating a personal development plan for gaps or looking to outside resources (collaborators, hiring new staff, etc.) to compensate.
The fact that you picked up this book means you know you want to evolve in some way. We can’t underscore this point enough: if you want to be a strategic leader, you must be ready to change yourself, change your department, and change your organization. Willingness to change and improve underlies our entire model.
Imagine this: you are part of a team evaluating something in your organization that’s high-profile, expensive, and beloved. Maybe it’s a national advertising campaign, an employee productivity platform, a major training curriculum, or a sales channel partnership. Whatever it is, it’s near and dear to your department and well-known throughout the organization. When the findings from the analysis begin to roll in, you find out that the program isn’t working. You thought it was successful, but it turns out those success metrics aren’t driving business results. You’ve just learned that you are pouring money into an initiative that’s not doing what it’s supposed to. What decision do you make? What are your options?
Reading this scenario in a generalized format, it’s relatively easy to say, “Of course I’d pull the plug.” But put yourself through the mental exercise of coming to such a finding about your flagship initiative. The one for which you personally pushed to get funding, and then promoted to everybody with lots of grand promises about a huge ROI. It’s personal, and it’s painful. It’s so painful that those kinds of findings are often shelved. People make excuses: the evaluation model was flawed, or we didn’t have access to the right data to prove the impact, or the political climate is such that we need to stay the course, or the CEO loves this program, so it has to stay.
Here is where we stop and tell you that if you aren’t ready to cut your pet project after finding out that it’s not delivering the value the company needs, then you aren’t in the right mindset to read this book. Set it aside and come back when you’re ready for blunt honesty, a truth that is sometimes agonizing but leads to better things. You can make a huge difference, but it all starts with your willingness to change in order to drive smart, organizational change. And sometimes willingness to change means we have to let go of the things we love. It means asking hard questions and running the risk of appearing foolish. It could mean you have to tell your boss that she made a critical mistake or confronting naysayers when you typically avoid conflict. It also means asking for help and advice from those around you, reaching out to connect with supporters and denigrators alike. Above all, willingness to change means being the kind of leader that your organization so desperately needs you to be.
What’s All the Fuss about Change?
Driving change can be scary when you’re acting alone. Throughout this book, you’ll notice a common theme: pulling together all available resources to get the job done. Strategic leaders don’t work alone in a silo—they connect with their colleagues around the organization in order to gain a systemic perspective on the business and ensure that they are meeting the needs of internal and external customers. Strategic leaders also make smart, informed decisions based on robust evidence that has come from all types of data. When it comes to thinking about and using data, many people get overwhelmed. It’s easy to get lost in the sea of vendors, tools, techniques, databases, dashboards, scorecards, frameworks, and all the other options available for managing and interpreting data. But when it comes right down to it, using data is all about driving change in a focused, strategic way.
Figure 1.1
Evaluation and analytics take data and turn it into information. Information provides you with knowledge, which you can synthesize into intelligence using your experience and understanding of your organization. From there, you are equipped with what you need to make strategic decisions, which in turn drive change. Understanding the change you are trying to drive will inform all of your efforts. Decisions that require a change to something (a strategy, a system, people, a program, an investment, etc.) should be based on data. Evidence-based (i.e., data-rich) decisions result in change that improves outcomes, reduces risks, and optimizes investments.
You’ve probably heard about evidence-based medicine, which has only grown in popularity since it was introduced by Dr. David Sackett in the late 1970s. Evidence-based medicine is the “idea that decisions in medical care should be based on the latest and best knowledge of what actually works.”3 This is the same concept we apply to leadership in the business world—that leaders make decisions based on data. If you think this all sounds crazily obvious, consider this: “Studies show that only about 15% of [doctors’] decisions are evidence-based,” which means that although there is a ton of medical research in existence, doctors aren’t using it.4 The same applies in organizations: we have absurd amounts of data, but instead we make decisions based on gut feelings and what someone else is excited about. One caveat: it’s possible to go too far with data-driven decision-making, too. You always look at the big picture along with what your data is telling you. Strategic leaders use a combination of information to make smart decisions.
The subject of using data brings us to the topic that we know makes many of you without a strong mathematics background cringe. It’s okay. You aren’t alone, and you don’t need to revisit college statistics to become a strategic leader. No matter what area you work in, you have the opportunity to look at business results and determine whether you’re doing the right things to get those business results. Some disciplines have a strong, obvious connection to business performance (sales, for example). For others, it’s less obvious. A good example is the field we came out of: learning and development, or training. The learning department was traditionally considered a cost center because training the workforce was considered a cost of doing business. We knew we needed to train people so they could perform and we could stay competitive and innovate. But when times turned tough and the workforce dwindled, training seemed like a luxury. We could no longer take people away from their jobs to participate in training, and we didn’t need as many people building and delivering training. This is not a strategic approach, because it stifles the competitive and innovative nature of business. However, it has, in the past, seemed like a sensible business decision on the surface due to a lack of proof that training was impacting the desired business results. So, why keep investing in something that may or may not be working? There was no clear evidence either way.
Because we came out of a field that struggled to connect its investments to revenue, we can confidently say that you can find a link between anything you’re working on and the greater business strategy5. If a direct or indirect link truly doesn’t exist, then you need to ask why you’re doing it.
When it comes to analyzing data and showing business results, the answer is simple: if you don’t already have a plan for evaluating your investments and decisions, you need one. That plan can be simple or robust, but it must be executable and help guide your strategic decision-making. Without understanding the impact of what you’re doing, you’re adrift. In your role, you may not need to have strong quantitative capabilities yourself, but business acumen and analytical awareness are critical leadership skills. Understanding analytics enables you to use data to drive change for winning results. Other leaders will take you seriously when they see that your decisions are fact-based and designed to move the company in the right direction. Leveraging all types of data when making decisions is a key component of strategic leadership, and it also empowers your organization by providing other leaders with data they need to build a truly competitive and innovative organization.
Leveraging all types of data when making decisions is a key component of strategic leadership.
You make decisions in life every day, some big and some not so big. Making an impulse purchase of a candy bar in a gas station is a decision that takes almost no thought. The cost is low, so even if you end up regretting the purchase, you aren’t out much. Most people don’t, on the other hand, buy an expensive sports car on impulse. You shop around, planning out where you’re going to store it and how you’re going to budget for all the higher ongoing costs of ownership—maintenance, tires, premium fuel, insurance, etc. In your own life, these details are usually easy to see and think through. As you get higher in an organization and have more responsibilities, you can’t immediately see all the details yourself. This is why strategic leaders use data to monitor what’s going on and make proactive changes when things aren’t going the way they should.
A winning organization—whether it’s a large corporation, a small mom-and-pop business, a start-up, a department, a team, or some other functional grouping—operates in alignment with the business. It has a vision and mission that are closely connected to corporate strategy, and everyone on the team is aligned to that vision. People on the team are enthusiastic about supporting the vision because they understand how their work connects to the organization’s success. Who doesn’t want to be part of a winning organization? The leader has an active, strategic role at the executive table and consistently steps back from everyday operations to evaluate everything the organization is doing. The leader makes sure all relevant stakeholders are informed, understand the desired impact, have their needs met, and play their part in enabling the organization to do its job. Further, everything a winning organization is doing is in some way making a needed impact on the greater business. When impact on the business misses the mark, the leader has the data necessary to identify the miss and moves quickly to remedy the situation. A winning organization’s leaders are agile by evaluating what they’re doing based on its impact on the business, making data-driven decisions, and making proactive efforts to change when change is warranted.
A strategic win drives the company’s performance in some fashion. To get specific, you and your organization need to decide what defines a strategic win. The important thing is to make those decisions at the outset, because you won’t know you’re winning if you haven’t defined success in the first place. The Impact BlueprintTM6 presented later in this book will be a great help in defining success and identifying the big-picture macro wins, as well as the micro wins that tell you if you’re making progress along the way.
Here are some examples of strategic wins.
Honeywell’s response to economic recession
The traditional school of thought about recessions is to restructure the workforce, that is, lay people off. When business softened, Honeywell’s CEO David Cote was reluctant to take this approach. He explains:
To understand that reasoning, look at what really happens when you do layoffs. Each person laid off gets, on average, about six months’ worth of severance pay and outplacement services. So in essence, it takes six months to start saving money. Recessions usually last 12 to 18 months, after which demand picks up, so it’s pretty common for a company to have to start hiring people about a year or so after its big layoff, undoing the savings it began realizing just six months earlier.7
A winning organization’s leaders are agile by evaluating what they’re doing based on its impact on the business, making data-driven decisions, and making proactive efforts to change when change is warranted.
Instead of restructuring, Cote and his team implemented a series of unpaid furloughs. The organization worked through some heavy challenges during the furlough periods, but in the end the company emerged strong. Employee morale stayed higher than it would’ve under layoffs, and as business began to pick up, the skilled workers were ready to jump back in. Cote’s leadership was strategic because he was able to see beyond the immediate pain of the recession. That, combined with some creative problem solving, put Honeywell ahead of its competitors when the economy was ready to grow again.
Educational assistance for employees
One strategic opportunity for McDonald’s Corporation was the education support program, which had a rather low participation rate. The original design of the program aimed to give employees throughout the organization the opportunity to earn a four-year degree, which seemed to the team who launched it to be a useful benefit. When the team surveyed the audience eligible for the program to find out why they weren’t taking advantage of the opportunity to get a four-year degree, they learned that the audience was still several steps away from that educational level. Many needed to complete a high school diploma or GED, and others felt that a two-year degree was more conducive to their goals. The team realized that the educational program would better serve this audience by offering pathways to a GED and/or two-year degree. Not only did they employ data to make this decision, but they asked the employees and partnered with outside organizations to find out how they had built their education strategies.
Improving workforce education levels also had the benefit of improving retention and strengthening the organizational leadership pipeline. Many employees were moving up through the ranks without a degree but eventually getting to a level where they needed additional knowledge and skills to meet the demands of the business world. Much of that was offered within the company, and the educational program helped to supplement internal training.
To continue winning and to employ the lessons learned from the tuition assistance program, the McDonald’s team decided that they would gather more direct data on the front end to design and deliver the most beneficial program possible.
Leadership’s pet project
A client’s organization was spending millions on a sales training program with little to show for it. Sales numbers remained unchanged. The CEO was friends with the owner of the small training company that provided the sales program and thought it would be a big win for his company. The rest of the team, with no emotional attachment to the vendor, wanted to cut the program, but the CEO continued to fight for it. In these kinds of situations, hard data is so critical to getting your message across. You must be able to show results (or lack thereof) in business numbers. For the sales training program, the group (including the CEO) compromised by letting the sales training run for six more months. If at the end of that period results continued to be unchanged, they all agreed to cut the program. The metrics of success were clear to everyone involved, and they were able to detach from the personal factors involved.
Creating a winning organization requires strong, strategic leadership. Based on our experiences, both in and out of corporate L&D, we’ve developed a leadership model that is a microcosm of the six factors for strategic leadership you’ll read about later in this book, and it will help you begin to think about the way winning organizations operate.
1.Align with a motivating vision that’s grounded in expectations. Defining an inspirational vision is the critical first step in providing your team with the direction and motivation to achieve success. A sound vision provides everyone with a clear line of sight to the strategic win. This vision needs to be grounded in the definition of success for your company and business—based on customer and stakeholder expectations. We’ll talk more about how to identify the company’s strategy and success measures, as well as how to craft your vision, in later chapters. But as you define success, be sure to include what satisfaction looks like for your employees, customers, and shareholders (if applicable). Your vision should be a motivating statement—one that’s tied to stakeholders and is a stretch for the organization. Everyone on the team should be able to relate to it, repeat it, confidently and enthusiastically explain it, and more importantly, live it! In fact, the vision statement should be incorporated into your daily language and interactions with others outside of the organization.
2.Define goals and strategies as a road map to success. Once you’ve crafted a motivating vision, define the key goals and strategies needed to bring your vision to life. These become the roadmap to your destination. Identify the critical actions that must be executed to move you along the right path. Leaders and team members should focus on actions that will have the greatest impact on desired results.
3.Have the right players in the right roles. To have the right players in the right roles, you start by hiring the right people. Staff for success by keeping your standards high and hiring the best. They don’t necessarily have all the technical knowledge or fancy credentials, but the right disposition. Look for people who have the right attitude, willingness to be team members, and a desire to learn. Do they reflect the vision and mission for your organization? Are they the role models you want? Will they relate to the work and stick around to see the results? It’s not only much easier to accomplish your goals when you have strong players, it’s downright impossible to accomplish them with weak players. Don’t waste time and effort trying to improve the people who may be strong performers but don’t have the right attitude or lack the willivngness to learn. No matter how much time you sink into them, you can’t force them to truly care about the job at hand or be a team player. Find the right fit for your team. Recruit, hire, train, and develop team players who have the ability and passion to bring your vision to life.
4.Create the best work environment so everyone thrives; celebrate success! Create an environment that allows people to not only do good work, but to thrive as they’re doing it. Ensure workload is broken down into manageable chunks, and then match tasks and projects to the skills of each individual so they can accomplish their best work. People do their best work when they feel comfortable bringing their whole selves (mind, body, and spirit) to work. Take the time to get to know what motivates your team—what jazzes them. Most people have the sense that they work for a person, not for the company, so stay connected with them as individuals. Recognizing and celebrating successes is a strong motivator to keep team members productive and engaged. If you celebrate what you want to see more of, you’ll get it! Ask yourself: “Would you want to report to or work with you?” What’s good about reporting to you? What could be better?
Ask yourself: “Would you want to report to or work with you?”
5.Plan, Do, Study, Act. Winning leaders have a plan. They execute that plan. They learn what was revealed during the plan’s execution, and then they act to make the informed change. Several later chapters will provide in-depth guidance to help you with strategic planning, execution, decision-making, and continual improvement.
6.Measure functional success and focus on continuous improvement. Item one entailed defining your vision of success. But to know if you’re on track along the way—and if/when you achieve success—you need to measure your progress. Establishing regular check-in routines will give you and the team the opportunity to recognize and celebrate progress, which creates energy to keep going forward or make needed course corrections at the right times. These routines also provide the ideal opportunity for feedback—a tremendous gift when given and received in honesty and openness. Set ever higher goals to continually improve the business and to keep your stakeholders delighted.
People may not remember what you say, but they will remember how you make them feel.
