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Introduction

In Search of the Philosopher’s Stone

“Where you are headed is more important than how fast you are going. Rather than always focusing on what’s urgent, learn to focus on what is really important.”

Anonymous

“I am tomorrow, or some future day, what I establish today. I am today what I established yesterday or some previous day.”

James Joyce

My introduction to strategy and expectancy management

At the first executive strategy session I ever participated in, way back in 1976, I experienced an epiphany. As a passionate, intelligent engineering executive, albeit an inexperienced and newly minted one, I had been searching for the magic formula for business success. I pored over every business book, seeking the equivalent of the philosopher’s stone that would covert the company’s leaden daily issues into precious gold. During that fateful planning meeting, I realized the stark differences between a company’s yearly operating plan and a true strategic plan. My eyes lit up at the concept of “expectancy management,” the practice of making decisions today based on where we wanted to be in the future.

Finally, my company had a better approach than mixing random strategic elements in the hope they would produce some sort of positive chemical reaction. (Random actions in the past had included hiring a PhD to do R&D without any staff or support, investing days in the hopeless pursuit of a multimillion-dollar government contract, and trying to sell excess capacity as a commodity.) Instead, now the company could visualize a desired future and combine the elements “scientifically” to create it.

A paradigm shift

Here was the answer – it wasn’t one single, magical thing, it was a whole different paradigm. Before the meeting, my company had a corporate strategy best described as “just work harder.” We had gone deeply into debt with a New England bank to double our capacity, not noticing the onset of a recession that had temporarily flattened our growth. In fact, it was pressure from the bank, worried at our worsening financials, that had pushed us into “wasting” our time planning strategy rather than fighting fires.

A short three years after that first executive strategy meeting, the company was able to execute a highly successful initial public offering, showcasing a string of profitable years unprecedented in our corporate history.

The chemistry of strategy

With my engineer’s perspective, I clearly saw there was an underlying chemistry that could be used to dramatically transform today’s tarnished status quo into a precious, shiny future. I visualized myself facilitating successful strategic planning meetings when I retired from direct management. I embarked on a personal 37-year quest to understand what the chemistry of strategy was and to develop faster, cheaper, and better processes precisely attuned to needs of the hundreds of thousands of “not-yet-Fortune 500” companies.

The process we followed back in 1976 required weeks of effort to create a strategic plan. That process was a powerful tool for answering the what and why questions, but consumed so much of the company’s available planning capacity that there wasn’t sufficient time left for implementation – i.e., the how. The implementation processes we were following were designed for organizations with the resources of a Fortune 500 company, a club my employer was not a member of at the time.

Over 10,000 hours of hands-on facilitation with companies in every sector of the economy led me to bulletproof processes for creating, implementing, and sustaining a winning strategy that turns vision into reality. The result is the book you’re reading right now.

The Chemistry of Strategy documents solutions to the most common strategic and tactical issues you’re likely to face as you grow your company. Both the importance of the issues and the effectiveness of the solutions have been field-proven. Every smaller business will face these issues as it grows. You will benefit from my experience with companies in a broad range of industries, including energy, finance, food service, government, insurance, legal, logistics, manufacturing, market research, medical, technology, and what I like to call the “intentional nonprofits.” This diversity of client companies and the creative approaches they’ve deployed provides opportunities for cross fertilization. For example, medical practices can benefit from the quality systems that manufacturing firms routinely deploy. Manufacturing firms can benefit from the risk management insights of financial planning firms. And every firm can benefit from the innovation concepts of idea-generating firms.

Who this book is for

I wrote this book for you, if you already are, plan to be, or should be an executive of one of the hundreds of thousands of “small” companies with 20 to 500 employees. These not-yet-Fortune 500 companies are typically transitioning from the entrepreneur’s “back-of-the-envelope” style of management to a professional form of management.

In my experience, small business executives come to the table with different sets of strengths, weaknesses, and experience. The Chemistry of Strategy speaks to executives and future executives, no matter what their path to executive leadership. You and your fellow executives are likely to fit into one of these profiles:

Alpha wolves from finance, sales, production or development are terrific at working in their specialty. They usually haven’t had the need for broader management experience or for worrying about a strategic vision. The Chemistry of Strategy provides an effective way for these managers to broaden their business perspective with an easy-to-grasp model of strategic vision.

Company founders can usually manage quite effectively on the back of an envelope in the early years. The company’s initial strategic focus is acquiring a set of customers, learning how to service them, and surviving long enough to make the next payroll. With growth, the time arrives when the company has sufficient resources and leadership demands to support an executive team. The Chemistry of Strategy provides insights on how to develop and make effective use of what often becomes the organization’s most expensive asset – the executive leadership team.

Former executives of major Fortune 500 companies have experience and understand the value of proven concepts like strategic planning, continuous improvement, and employee development. Unfortunately, the processes they utilized in multi-billion-dollar firms don’t scale successfully to small companies. Such large-company processes usually assume the existence of a large department to implement and sustain planning, with levels of headcount and expertise that either don’t make sense for, or aren’t accessible to, small companies. The Chemistry of Strategy provides tools that managers can use to implement their Fortune 500-gained strategic insights without requiring Fortune 500-scale resources.

Freshly-minted MBAs may have little hands-on experience, but plenty of solid book knowledge, albeit often based on their schools’ favored Fortune 500 case studies. The pragmatic approaches in The Chemistry of Strategy can help such managers apply that academic knowledge into career-building practice.

The next generation that will take the reins of the family business. Often the next generation’s experience is limited to time spent in the family business. The Chemistry of Strategy provides insights from multiple industries and companies and a strategic planning process that has proven to be a useful tool in facilitating that transition to the next generation.

Why this book?

This pragmatic book is a tool to help you:

understand what role strategy and strategic planning can and should play in your company;

understand why you would want to utilize the chemistry of strategy to dramatically increase the value of your organization and your personal success; and

acquire practical, proven methodologies that are how a not-yet-Fortune 500 organization can develop, implement, and sustain a strategic management process that turns vision into reality.

This book offers you something hard to find in today’s most popular business books: a practical, tested perspective and a strategic process that works for the legions of companies that don’t have the resources of an Apple, General Electric, or Procter & Gamble. You will gain a deep understanding of what strategic management is; why it’s critical to your organization and your own success; and how to create, implement, and sustain a strategy that literally turns vision into reality.

This book uses actual, real company examples to illustrate the various elements of the chemistry of strategy.

Over the course of my career, I’ve experienced myriad challenges and more than my fair share of less-than-optimal decisions. One of my life’s goals is to help as many people as possible to avoid these mistakes. I’ve focused my “lessons” on:

Addressing the actual issues faced by the majority of small and midsized businesses. These are companies – and many divisions within Fortune 500 firms – with anywhere from 20 to 500 employees, all facing significant business challenges that are very different from the issues of the Fortune 500 giants.

Drawing on the actual experiences of hundreds of different organizations, rather than on just a handful of companies.

Documenting simple, field-proven processes to address the most common issues. These are “KISS” (Keep It Simple, Stupid) processes that don’t assume or require large staffs to implement.

This book uses actual, real company examples to illustrate the various elements of the chemistry of strategy. I have changed the names of colleagues, companies and their employees to honor their request for anonymity. In some cases, the experiences of more than one company have been combined to highlight a concept.

I invite you to explore the chemistry of strategy. Gain a deep understanding of what strategy excellence is; why it’s critical to your organization and your own success; and how to create, implement, and sustain a strategy. Learn how to apply a practical, tested perspective and process that works for companies like yours, and you will be able to turn your own vision into reality.