Many years ago we worked for a client in the commercial waste management business – they hauled garbage from commercial businesses and construction sites. We were called in because, despite having spent a large sum with a top-tier consulting firm for their strategy, they were stuck on how to implement it. The summary of the previous consultant’s work was a strategy statement that read “in our industry, we will provide the best customer service, be the most innovative, be the most efficient and have the best people.”
Following the consultant’s advice, they had turned each of these four aspirations into an implementation initiative and appointed a senior leader to drive each initiative. The problem with this was quickly evident at their first steering committee meeting. No one was able to get through their initiative without presenting something that conflicted with another initiative. For example, the HR Vice President presented data that companies with the best people invest in an average of nearly two weeks of training per employee per year. The head of Operations interjected “how can we be most efficient if all of our drivers are out of their trucks and in a training class two weeks every year?” The meeting soon devolved into a shouting match.
When I learned this history, the root cause become obvious to me. If you read these blogs regularly, you will have already noticed that this is not a strategy – it meets neither of our definitions. Further, it overlooks the reality that strategy is about choice, specifically choices to excel at some things and not others. This laundry list of aspirations is broad enough to provide cover for just about any initiative, but calling them ‘strategic’ doesn’t make them good ideas (or good investments).
While this is an extreme example, we realized that this is a mistake companies make way too often: ignoring underlying trade-offs that are all too real. As Maya Townsend and Elizabeth Doty said in a recent article, “when leaders launch an initiative, their ability to achieve “both/and” is not yet proven.” While great strategies are often built on pushing the limits on historical trade-offs (Toyota’s success in pushing quality and cost simultaneously, for example), ignoring that these trade-offs exist undermines the credibility of the strategy.
Worse yet, pretending trade-offs don’t exist leaves resolution of actual trade-offs to lower levels of the organization, sometimes just guessing at what “they” really want. In our waste management example, since the company was run by leaders who had grown up in operations and the key metrics they tracked were mostly around efficiency, regional leadership mostly acted as if efficiency was king and typically just gave lip service to the other aspirations.
In this work and others where we have helped companies make their strategies real, we have come up with a few general principles that will at least get a strategic transformation off to a good start:
- Acknowledge historical trade-offs – be honest with the organization about how trade-offs were made before and what has changed to make that no longer acceptable, for example: “we are losing customers because our customer service is unresponsive, being low cost alone is not enough to continue to thrive.”
- Be explicit about how you want trade-offs to be made differently – some clients use our ‘will do/ won’t do’ framework to communicate what is really different, like: Maybe will do: “Always leave a job site looking better than when you arrived, even if that means fewer stops that day”. Won’t do: “Accept jobs before confirming that we can fully meet delivery expectations.”
- If possible, strive for a structural solution that puts trade-offs in a different part of the organization, with more relevant information. One of our clients in an equipment rental business discovered that their individual branch managers were using price discounts, sometimes for even the smallest customers, to keep up utilization of equipment. From a broader perspective, this was sub-optimal, as a branch across town might have demand to rent the same piece of equipment at list price. To address this structurally, they took all pricing authority away from branches, programing the system so they could only book new business at list price and requiring all discounts be approved at the region level
- Over-communicate what is changing and why. Too often, leaders view communication as a one-way street. The reality is that without a safe time and place to ask questions like “why are we doing this?” and “Why didn’t we consider this?”, doubt in the strategy is not overcome it is just driven underground, waiting to rise up and say “I told you so” at the first little hiccup in implementation
- When deciding on exceptions, leaders need to be very conscious that they are developing the ‘case law’ that will determine how the strategy will be interpreted going forward. In fact, early on, leaders may even want to write opinions like supreme court justices to explain why they made a decision and the limits on how far their logic can be extrapolated. Human nature is clear, if actions don’t match the words, your people will make stuff up to fit the actions, and your original intentions may not survive
- Lastly, course correct when presented with new information. Trade-offs by nature change over time, as new information becomes available you can usually update specific initiatives and goals without discarding the entire strategy
Oh, the waste management client – after confirming their aspirations were still valid, we brainstormed a set of options. We acknowledged that there were some very real trade-offs that could not be ignored. For many of these the individual route driver was the only person with the information and perspective to make these trade-offs, for example: “should I slow down and talk with this customer because they might want to buy an upgraded recycling program, or do they really just want to talk about last night’s football game?” Efficiency would generally trump the football chatter, but innovation and customer service would say the recycling upgrade conversation is worth having – ONLY the driver can make that decision.
Armed with that perspective, we set out to design a system where drivers would be measured not just on efficiency measures (like stops per day), but instead by the profitability of their route – in other words, they would make the trade-offs as if they owned their route. We were convinced that this would lead to better customer relationships, more innovative ideas bubbling up from the field, and ultimately, attract and retain better people because the role was now more inherently rewarding (yes, you still had to haul a truckload of garbage, but most of the time you were solving real problems for customers).
Sadly, the good news ends there. Before we could pilot the new concept, our client was acquired. The new parent was financially motivated to justify their investment and so doubled down on the efficiency metrics. At least one of the local managers we had gotten to know made a point of calling to say “I told you efficiency is all they really care about.”
Happily, your story does not need to end this way. Once you have articulated your strategy, your work is just beginning. Being honest about history, acknowledging trade-offs and clearly communicating what is different are necessary steps in making implementation successful.