The last few blogs have been about horsepower—that driver that gives you the confidence to step out of the comfort zone; the engine that can create momentum in your organization. Having spent two weeks riding Andalusians in Spain, I can relate to the feeling of unbridled horsepower—it is a thrill. Achieving unbridled horsepower is an indescribable feeling but you definitely know it when you are there.
Can you imagine being Neal Armstrong when he took that first step on the moon in 1969? Were you glued to the television set watching this incredible feat? For those of you who weren’t even born yet, imagine the fascination of the country as they saw history take place, predicted only a few short years ago. It is like Steve Jobs announcing the next I-invention times 10. Imagine the pride felt by every single patriot upon this electrifying achievement, not only for what was accomplished but what it meant for the future.
Unbridled horsepower is the ability of the company to move as one to achieve significant goals. When one goal is reached, it moves beyond to the next, perhaps even more significant goal. As the organization learns to function in a seamless manner, aligning departmental skills to achieve enterprise objectives, more is possible than you might imagine.
One client has asked me to do their strategic plan with them three consecutive times, each five years apart. Each and every time, they achieved the goals they set out for themselves and were emboldened to extend themselves even further each time. Upon the completion of the last plan the company was able to successfully close a transaction that fully funded retirement for the ESOP and its retirement age leadership team. They achieved what they had set out to do. That company will live on with a new future and new leaders and has potential to go much further.
So, what gets in the way of horsepower?
Executives develop solutions unilaterally. Most organization leaders of company’s under $1B are expected to work “in” the business, not just “on” the business. They roll up their shirt sleeves and pitch in where needed. They understand the business at the operational level. It is what they do every day which breeds confidence that no one knows what the business needs more than they do. Who can argue that they know the business better than anyone?
Yet, being mired in the details is the worst place to be when creating strategy. It breeds a plan that works within current structures and capabilities; it doesn’t challenge the status quo. All too often you will hear “we can’t do that because” or “we tried that once and it didn’t work”. In this situation, the executive team doesn’t have the skill set or training to challenge what they do every day, to orchestrate a well-defined new reality, or even recognize that they aren’t taking advantage of market opportunities because they simply don’t see them. They are too close to the situation, too narrow in their thinking and too predictable in the outcome.
Objectives vs. Strategy
Another common mistake is confusing objectives with strategy. Many companies set annual goals and objectives to correspond with annual budgets. In almost ALL cases, any organization doing a one-day plan or a one page plan is doing that. One day events are great for doing strategic reviews and updates, tracking progress on strategic initiatives and brainstorming about possibilities. It is a good forum for developing continuous improvement objectives. All of these are good and worthy things. But they will not allow an organization to harness hardship or develop the focus, clarity and accountability that drive unbridled horsepower.
If the organization’s strategy is a list vs. a concept you know whether you fall into this trap. I worked with a client that annually created a list of very strong objectives and they were growing the business. We took a different approach and found that there were some fundamental issues that held their growth back from what it could be–culture, a weak functional area and a few other things. The contrast between the two approaches was obvious. One created a to-do list; the other addressed organizational issues that had to be dealt with at the top to improve the results generated by the to-do list.
Which approach are you using? If you have a clear strategy, an annual to-do list to implement it works. Without the strategy, you are likely creating chaos by trying to fix everything all at once, deploying “whac-a-mole” management.
The last issue is inside-out thinking. Creating a strategy by asking what does the company want or where does it want to go is essentially a wish list. It is highly unlikely to succeed. Rather, a company needs to create a strategy asking where is the market going and what can we do to meet those needs better than anyone else? That is outside-in thinking.
Few companies I work with can answer the outside-in questions. All the data they collect is about how well they do what they are already doing. And while that is good data for operational improvements, it doesn’t support the creation of a strategy. One of my clients is in an industry that is significantly challenged by changing consumer preferences, outdating the old model and demanding new ones. Data that compares performance of last year to this one or reports customer satisfaction with the current model is great for operational enhancement but not a refinement of business strategy or development of a new business model. For that, we need information about leaders of change in the industry, rate of change in consumer patterns and other data that looks at things outside the current model. One reason companies don’t make the big changes is that they don’t collect the type of data necessary to give them confidence to make the change.
Success is a journey more than a destination. When you look at the great companies that sustain success year in and year out, they remain steadfast in what they do well, getting better and stronger at it. They unbridle their horsepower by understanding their engine, the power, and then letting it run! They implement new policies or programs that reflect new capabilities aided by technology or a shift in customer needs. They reach out in front, cover new ground and explore new opportunities and have confidence in the powerful engine they have established throughout the organization.