For organizations to succeed, they need to be faster and smarter than their competition. However, success won't happen with only the most streamlined processes and a ton of resources. What's required to implement strategy quickly and well is making your people the main component.
All leaders, whether from the for-profit or nonprofit world, would agree that speed is required for a successful organization but difficult to achieve. Even trickier is strategic speed, which is about implementing strategies not only quickly but well. Our research with hundreds of leaders from around the world (the basis for our new book, Strategic Speed: Mobilize People, Accelerate Execution) shows a link between speed and business results. On average, faster companies had 40 percent higher sales growth and 52 percent higher operating profit.
However, our research also allowed us to uncover a big mistake some leaders make: They pursue speed by only manipulating processes to become more efficient. While this is helpful, focusing on efficiency alone does not create speed. In fact, our research showed that leaders achieve strategic speed when they focus on people. When leaders aim for clarity, unity, and agility, they are more likely to see their organizations prosper.
Senior managers strive to increase the clarity of their strategies. They work with their leadership teams to identify market opportunities, assess competitive threats, size up their organizational capabilities, and determine where to make investments. They write up strategy documents and launch communication campaigns. Yet, though the strategy is often 100 percent clear in the mind of the leader or among the senior leadership team, they're often frustrated by the lack of clarity throughout the company.
Clarity means your people can confidently answer the question, "Where are we going, and why?"
As a leader, clarity means your people can confidently answer the question, "Where are we going, and why?" They should also be able to answer these three questions:
- What are the external conditions we face?
- What are our internal capabilities?
- Based on all these factors, what should we do—and how should we act?
Note that it's far more important for employees to be able to answer those questions than for the leader to be able to answer them. In the case studies we conducted, we found that effective leaders spent relatively little time seeking clarity on their own and a lot of time working with their employees to develop a clear picture together.
Unity can only happen after clarity. Once people are clear on where they're headed, they agree wholeheartedly on the merits of that direction and the need to work together to move ahead. Unity is perhaps the least-appreciated factor of speed. Executives often understand that if they want plans and strategies executed more quickly, they need to set clear direction, create a sense of urgency, reduce bureaucratic delays, and adapt nimbly to changing conditions. What they often don't see is the extent to which lack of unity within teams, across the organization, and with external stakeholders tends to undermine everyone's best efforts to move quickly.
In business, collaboration is the main driver of unity. When leaders foster a culture of collaboration, spell out a common cause, and ensure that everyone is equipped with the necessary technical and soft skills, projects and strategies hold together. If the culture is one of internal competition, mistrust, and turf wars—or just simple unawareness of what other groups are doing—projects and strategies fall apart. Lack of collaboration and a resulting lack of unity is a chief reason for teams and initiatives sinking.
Fortunately, positive examples of unity aren't hard to find. In our case studies, leaders adopted the same mechanism as part of their efforts to increase speed: When launching an initiative, they chose to bring together people from different divisions, roles, and geographies for strategy and training sessions. This was an expensive and slower approach, but one that leaders eventually named as critical both to reducing time to value and to increasing value over time.
Agility has become a topic of much interest in the business community. In his book Business Agility, Michael Hugos writes, "Most profitable opportunities in the global economy are, by definition, short-term opportunities. Companies need to respond and act quickly on opportunities that arise."
Jumping on opportunities is no doubt important, but our case studies suggest that agility is less a matter of adapting one's direction continuously and more a matter of being open to different ways to achieve the direction you have set for yourself. In other words, real agility isn't about heading north one day and east the next; that's vacillation. Agility is about heading consistently north, but being willing to use sails one day and the onboard motor the next, as conditions demand. To use another sailing metaphor, some leaders react to an ill wind by saying, "The wind is against us; we'd better change course" (vacillation), when they would do better to say, "The wind is against us, so let's start tacking so we can keep moving forward" (agility). In other words, we define agility as the willingness to turn and adapt quickly while keeping strategic goals in mind.
Patterns of Clarity, Unity, and Agility
It's common for organizations to emphasize just one or two of the people factors and, as a result, to encounter some typical speed bumps. In our practice, four patterns of organizational behavior crop up frequently. Each is characterized by different levels of clarity, unity, and agility.
1. Not my problem (high clarity, low unity, average agility). In this sort of organization, people are clear about what the strategy is but less clear about how to execute it. The strategy turns into fragments that each of the many functions or divisions interprets differently. People selectively execute the strategy in ways that protect their turf. As a result, silos form and business units work against each other. Information tends to stay within these silos or functions rather than being shared, and in some cases, information becomes power. Trust erodes, even when people think they're doing the right thing. Pressure for short-term performance is so high that there is little experimentation or reflection. The corporate salute is pointing your finger at someone else. This pattern of behavior can have devastating consequences. One example is Enron.
2. Everything to everyone (low clarity, low unity, average-to-high agility). This organization has a glorious new strategy. There's only one problem: Nobody is doing anything about it. They jump on every "hot opportunity" they see but never quite manage to turn any of the opportunities into profitable products or services. They promise their products or services are fast, good, and cheap, when in fact they can deliver on only one or two of those promises; they take this approach because they prize customer satisfaction. Everyone is happy until it's time to deliver and things go wrong. Then, everyone pitches in to make it right: They expedite the order, which disrupts the other orders, and soon everything is being expedited . . . until the company goes out of business—all in the name of customer satisfaction. Some of the dot-com companies of the late 1990s were examples of this culture.
3. Myopia utopia (low clarity, average-to-high unity, low agility). In this type of organization, there's a heavy reliance on "strong results today" that overlooks the strong behaviors and values necessary for the sustained health of the business or the industry. Pressure for short-term performance is so high that there's little experimentation or reflection and little concern for achieving clarity of direction. There is plenty of camaraderie but little accountability for finding and fixing systemic, long-term problems. The net result is organizational performance typified by peaks and valleys—potentially very deep valleys from which the firm may never emerge. Lehman Brothers was an example of a myopia-utopia culture.
4. Boiled frogs (high clarity, high unity, low agility). How many companies can you name that, after years of success, drop out of the competition—either to fade away or to reemerge after painful restructuring? Think IBM with the PC, the music industry, newspapers, and network television.
Generally speaking, these organizations have a very clear strategy and have been able to execute it very well. The seeds of their success, however, also account for their crop failure. They become so focused on what has worked that when things start to go poorly, all they can do is try more of the same, which only exacerbates the situation. It is difficult for them to look outside and understand that their business environment has changed. You see this happen all the time with new, nimble competitors. A big player sees a new player entering the market at the low end, so it begins lowering its own prices. Soon, the new player begins moving up the chain, learning as it goes, and eventually becomes the big player.
Like the urban legend about frogs that supposedly won't jump out of a pot when water is heated slowly—and end up getting boiled to death without ever realizing they are in danger—this type of organization never realizes that it's time to take a leap in a new direction.
Four Leadership Practices That Boost the People Factors
We've explored the three people factors and their patterns when some are missing, but as a leader, it's important to know how you can boost the factors. Our case study research revealed that leaders who were successful in driving strategic speed applied these four practices consistently.
1. Affirming strategies. The first step in driving speed is to ensure all people in the organization know where they're going and are motivated to go there. An affirmed strategy is not only a sound strategy, it's also alive—that is, complete, clear, well communicated, and well understood by all stakeholders. Leaders frequently spend a lot of energy on formulating a strategy and expressing it in a statement, but too often the statement exists in a vacuum.
2. Driving initiatives. Driving initiatives is about execution. Without execution, any strategy will slow and eventually die. Senior leaders often assume their job is merely to "sponsor" strategic initiatives. Our research shows the exact opposite. They must get behind the wheel and drive.
Many of the skills that support this leadership practice are project-management skills, unfamiliar territory for many executives, but it's a territory they need to master. Though we don't advocate turning senior leaders into project managers, we do know that no initiative is too big to be treated as a project.
3. Managing climate. Climate is what it feels like to work in a place. Unlike organizational culture, climate is something that leaders have a tremendous amount of control over and that can be managed. Managing climate is a matter of understanding its six dimensions (clarity, standards, commitment, responsibility, recognition, teamwork) and the specific management tactics that improve it. If you can change your organization's climate in positive ways, the resulting changes will boost your employees' motivation and performance and increase speed.
4. Cultivating experience. Like solar, wind, and water power, experience is everywhere; however, it's rarely captured and put to good use. Most leaders know that smart, skilled, experienced employees are necessary to the success of an organization and that more experienced employees and teams can move faster than those less experienced. Many leaders, however, don't know how to cultivate the experience of their many employees and colleagues—how to capture it, make it visible, refine it, and harness it so that it becomes a powerful driver of results.
If you adopt and apply these four leadership practices, strategic speed in your organization or team will increase. However, there is another important note to make: You may have noticed a difference between practices one and two and practices three and four. The first two—affirming strategies and driving initiatives—come to the forefront when there's a need for speed in executing on a specific initiative or project. They help reduce the time needed for the initiative to begin creating value for the organization and increase the value it contributes over time. We call this type of execution "initiative execution." The latter two practices—managing climate and cultivating experience—come to the forefront when there's a need to increase the speed of the organization's ongoing work. They help reduce time needed to begin creating value and increase value over time in all the daily tasks and objectives of the individuals and teams you influence. We call this type of execution "everyday execution."
As a leader, you need both of these lenses on strategic speed. One focuses on rapid execution of discrete strategies, change initiatives, and projects. The other focuses on creating an environment conducive to fast execution of projects and achievement of objectives large and small: an organizational environment that supports speed every day.
Each practice affects clarity, unity, and agility in different ways, but without them, it is unlikely your organization will create the strategic speed it needs to continue to be successful and innovative.
Jocelyn R. Davis, Henry M. Frechette Jr., and Edwin H. Boswell are executives at the Forum Corporation, a global professional services firm that works with senior leaders to accelerate their critical business strategies. Adapted from Strategic Speed: Mobilize People, Accelerate Execution by Jocelyn R. Davis, Henry M. Frechette Jr., and Edwin H. Boswell. Reprinted by permission of Harvard Business Press. Copyright 2010 The Forum Corporation.