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The Five Fs of Strategy
In the 1980s the Harvard strategy guru Michael Porter made a substantial impact with a number of groundbreaking articles and books: within a relatively short space of time the field of strategy had become a respected and very serious academic discipline. The total focus was on heavy analysis, logical processes and other elements of left-brain thinking. Whereas this was attractive to accountants, engineers and other mathematically inclined people, it also served to alienate many managers.
Nowadays, there is a much stronger emphasis on making strategy understandable and interesting (even exciting) to a wider target audience. To have the desired impact, strategy needs to have substance – and, at the same time – be sufficiently intuitive, creative, visual and have emotional appeal. Drawing on the writer’s thirty years of experience in the field, this article gives some practical tips and guidelines for making your strategy process more meaningful and value-adding.
Building strategy around the five Fs
When facilitating strategy workshops, I like to suggest that high-impact strategy is built around the following five f-words:
Firstly, one needs to decide upon (or review) the main focus of the organisation. Essentially, this amounts to asking – and answering – the question: What business do we want to be in? Many companies refer to this as their mission statement, and it is all about defining the breadth and depth of their proposed business activities. But beware – this is not always an easy thing to do.
A well-known manufacturer of commercial explosives, upon re-visiting their mission statement, realised that they were not so much in the business of manufacturing and marketing explosives as providing blasting solutions for their clients. For Harley-Davidson, the main focus is on lifestyle, excitement and adventure, rather than simply producing and selling motor-cycles.
Some useful advice in this regard: focus on what you do best, and partner for the rest. In an interview conducted a few years ago, the late Steve Jobs reminds us that focus is not only about deciding what business you wish to be in, but – equally important – making explicit decisions about what business (or businesses) you do not wish to be in.
I also use the term focus in another sense: as the key outcome of the strategy formulation process, we identify a number of strategic thrusts, or critical areas, which the organisation must focus on. Importantly, these should be limited to at most five. (In Africa it has special meaning to talk about the ‘Big 5’.) If we identify too many strategic thrusts, they tend not to be taken seriously.
Related: (Video) Creating a Business Strategy
Follow-through relates to action and implementation. Many strategies fail due to a lack of follow-through. To quote Fortune magazine, less than 10% of strategies effectively formulated are effectively executed. The same magazine also conducted a major research project, with the following question at its core: What is the main reason CEOs fail? The research came up with a very clear answer: Lack of implementation.
Many business executives place too much emphasis on high-level strategy, on intellectualising and philosophising, and not enough on execution – this is essentially the discipline for meshing strategy with reality, aligning people and resources, and achieving the results promised.
For strategy to be successful, meaningful feedback needs to take place on an ongoing basis, ensuring that all key stakeholders are kept up-to-date. Often, this is where strategy breaks down.
Be robust, but flexible
Strategy is formulated and implemented in the context of a dynamic and rapidly-changing world. Upfront, a number of key assumptions and forecasts are made. If there are major surprises or substantial changes to key variables (such as the price of commodities, or the exchange rate), then the plans need to be amended accordingly. In other words, the strategy process needs to be robust, with a high degree of flexibility. Highly relevant is the following statement, included in a report published by the World Economic Forum a few years ago:
“We are moving from a world where the big eats the small to a world where the fast eat the slow.”
Leaders in an execution culture design strategies that are more road-maps than rigid paths enshrined in fat planning documents. That way they can respond quickly when the unexpected happens.
Lastly, there is the element of fun. Most strategy sessions are dull, boring and overly serious. This often results in standard, generic and uninspiring strategies. Importantly, strategy doesn’t only have to position, it also has to inspire. When strategy becomes fun and exciting, people want to become involved and the process is a lot more productive and value-adding.