Understanding what strategy is and how to create strategy that means something to people who have to implement it

Rene Power:

So, we’ve asked Mike to come along today because we want to talk about strategy and it’s often a word that creates quite a bit of fog in the minds of some people.

And a lot of people have a lot of different views of what strategy is whose role it should be and the sorts of things that it covers. So just to kick this off, I suppose, Mike you’ve had a career working in strategy and strategic thinking and strategic planning.

Through all of that time, how has your thinking on this evolved over that time?

Mike Baxter:

Strategy is misunderstood

Well, I think interesting that you should mention that it’s a foggy word, this strategy word because it definitely is, and it’s actually, it’s got good reason for not being simple and straightforward. If you imagine even your strategy personally or my strategy personally, there’s a whole bunch of things that either of us could be doing next week, next month, next year.

And if we were going into try and strategize that just for us individually, that’d be quite hard. We’d have to look at a lot of possibilities and we’d have to try and select the best ones from all of those possibilities.

We’d probably have to do quite a bit of analysis. Now, all of this is complicated enough when we’re just talking about you or I. Imagine we’re talking about an organisation with a thousand or 10,000, or maybe even a hundred thousand employees. You can imagine that that gets pretty hard.

Why gut feel doesn’t really help strategy formation

So, I think probably the first thing I would say that I’ve learned is that it’s too hard to try and do by gut feel. Some people will claim that the best strategists are the ones who just have really good gut feel and they kind of intuitively know which is the right direction.

Yeah, well maybe, but they’ve probably also got 10 years of hard graft of working out how a business operates in order to generate that gut feel. The gut feel doesn’t come from nowhere. It doesn’t spring out a fresh air.

There’s a lot of hard graft. And if there was one thing I would say that I would like to give as a starter here, it’s that we need tools and processes in order to make strategy accessible in order to make it feasible in order to make it doable.

Strategy often isn’t an overnight success

Rene Power:

Some of these overnight successes, like your Elon Musk’s, your Richard Branson’s, your Steve Jobs, the people that are lauded as working from their guts and taking chances and taking big risks…

Actually, we’re kind of saying, it’s not really. It’s built on a history of trying different things out and actually having a fairly good understanding of what works and what models work and what don’t.

Mike Baxter:

Yes.

Rene Power:

Could it be fair to believe that they arrive at a point where there was a pivot or there was some magical thing. And then all of a sudden it went from there. But as we both know it takes 10 years to be an overnight success, doesn’t it?

Mike Baxter:

It does. And if you look at the statistics on startup organisations that are more people that are kind of yours and my age that win in startups than there are 18 and 20 year-olds.

We hear all the fables about young people making a big hit on startups. And of course they do. We all know that Facebook is one of them, but that’s the exception rather than the rule.

And it’s the people who have done 10,000 hours or a lot more that are actually equipped to make judgements and decisions about strategy that does not require three months research, six months for search or a year’s research.

They are able to make these intuitive judgments because it’s based on such a wealth of experience.

Rene Power:

I’m particularly interested in looking at and applying some of the thought that’s gone into (your book) The Strategy Manual from all these years of working with businesses and how that applies in probably two scenarios that are relevant to this audience.

The first is people not in leadership roles. And the second is people who are working predominantly in marketing and how some of the stuff that you’re thinking about can be applied in those scenarios.

You can tackle them separately. But I think for context for this group, and please guys do drop questions, comments, share with us your current understanding of what strategy means to you or what your frustrations are within your business.

But I’m thinking if we can anchor what we’re talking about today in those two areas so people not in leadership roles and therefore a little bit removed, how can we make strategy feel real to you guys, and then obviously how we can apply it to more and more marketing-focused roles?

Making strategy feel real

Mike Baxter:

So in terms of The Strategy Manual, you might think the last thing the world needs is another book on strategy. We’re really not short of books on strategy. Why did I think that the world actually needed one?

If you look at what else is on the bookshelf on strategy, you’ll find a lot of very impressive names. You will find people like Michael Porter and he talks largely about competition. Competition is really important, but if you just focused in competition, you’re going to miss the other parts of strategy.

If you look at Blue Ocean Strategy, Mauborgne’s book, then you are immediately focused in on innovation. Innovation is really important on strategy, but it’s not everything.

And if you read Gary Hamel’s work, it’s all about capabilities. Capabilities are really important, but it’s not everything.

Most of these books on strategy are about a perspective on strategy. They take one particular angle on strategy, and very often they don’t even tell you what to do with your insights. Once you’ve read the book and finished it, and you’ve had some breakthrough, what do you do with it? What does a written strategy look like? Is it three pages long? Or is it 30 pages long? Does it have KPIs in it or does it not?

There’s huge amounts of variation and practise about that. But what I wanted to do was not give my perspective on strategy that may or may not be interesting, but what I wanted to do was enable you to have a perspective on strategy and to go through a structured practical process inspired by the hands manual that many of you will have if you’ve got a car as old as my mum.

Mike Baxter:

So why VW camper van is about 30 years old and rarely does it go anywhere without the Haynes manual being tucked in behind the driver’s seat. It’s that kind of approach that I wanted to try and get to with strategy.

What do I do first? How do I diagnose the issue? What analysis do I need to do? What does it mean to do research into a strategy?

Making strategy meaningful

And then once the strategy is written, and this is perhaps coming on to the second point you made, what does the rest of the organisation do with it?

That’ll be the big razzmatazz. The new strategy has been launched. The chief executive is doing a town hall meeting and is going to launch the new strategy. Great.

What do I do about it? What does it got to do with me? What if I’m in a frontline team? What if there are seven managers between me and the chief executive. Am I meant to read the strategy and if I do read the strategy, what do I do with it then?

So again, I wanted to get them back in a strategy manual kind of perspective to say, once the strategy is written, that’s really the start of the hard work, not the end of the hard work, because strategy adoption is really hard and it’s got a cascade right through the whole organisation.

But if you do read the strategy, even if you are seven levels down from the chief executive, or some might argue seven levels up from the chief executive, anyway, seven levels departed from the chief executive, you will still be able to find something in there that you should be able to say, me and my role within the organisation, I can move an inch towards that bigger goal that I see in the strategy.

How can I make that work within my team, with my boss, with my boss’s boss, and how can I make that have an impact that actually ripples out across the whole organisation?

A good strategy is one that enables frontline teams to take action that has that ripple effect and goes out through the whole organisation.

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