Setting Your Organization on a Trajectory to an Improved Future
Have you ever wondered where your organization is headed? Have you ever asked yourself why some companies are more successful than others? Have you ever reflected on why once-great companies like Pan American World Airways (Pan Am), Lehman Brothers, Woolworths Group, Blockbuster, General Foods and Marconi no longer exist? Why companies like Xerox, Blackberry, Kodak, Royal Bank of Scotland and Yahoo are a shadow of their former selves, and others like Rolls-Royce, Hewlett-Packard, Anglo American, Standard Chartered Bank and Tesco are struggling to regain their once dominant position? And yet others, for example IBM, Apple, GE, Amazon, Walt Disney, BBVA, Jaguar Land Rover and Lenovo, continue to go from strength to strength.
We’ve asked these questions many times over the past three decades. Initially, when we were younger and, yes, less experienced, we thought it was simply due to the calibre of the organization’s leadership and the strategies they pursued. Then, for a period of time, we thought it was because successful organizations applied the latest management thinking, whether it was TQM (Total Quality Management), Business Reengineering, LEAN, Employee Engagement or Core Competencies. But, experience has shown that it’s not as simple as that. While such initiatives can undoubtedly bring some benefit, they rarely deliver the ‘silver bullet’ that their advocates promised. Equally, while the calibre of leadership is important, along with the strategies they pursue, they in themselves were not the answer to our questions. Eventually we came to the conclusion that there must be something more fundamental at play – something that ultimately determines the destiny of an organization. But what is it? And, can it be controlled in a way that increases the chances of success?
We don’t claim to have the complete answer, but we have, over the years, gained a number of insights and developed a point of view on this important question. This idea was born from the realization that leaders have less control over the destiny of their businesses than they think they have or would like to have. While these individuals are perceived to be very powerful, in reality their strategies and policies rarely change the course of their organization to the extent they had hoped.
The reason for this is that the context within which they operate is more powerful than the strategies (and supporting resources) they deploy. All too often leaders focus on the future they would like to have, rather than the one they are likely to get: a future that is determined by a set of factors, some of which are completely outside their control.
Those factors that are, in theory, within their control are generally so powerful and embedded within their organization that their influence is often ignored or underestimated. Strategies that are not cognizant of the context within which they are being executed have very little chance of success.
The organizations we are referring to are well established and have been successful in the past, but are now struggling to find renewed success in the ever-changing environment within which they operate. Without necessarily knowing it, they rely on strategies that have served them well in the past. They often have very skilled, experienced and dedicated people who have benefited from the successes of the past, and who very much hope that these successes will continue into the future. While our perspective does not directly relate to start-ups or newer organizations that are enjoying early growth, one day they too will become ‘established’ and morph into the type of organization our point of view relates to.
Our view has been formed through experiences as practising consultants and trusted advisors, rather than as academics – though one of us did spend six years as a Research Fellow and Senior Lecturer at a leading UK postgraduate university. While practitioners at heart, we also consider ourselves to be students of management and organizational leadership. Over the years we have read hundreds of books and thousands of articles on strategy, leadership and organizational change, and our conclusion is that there are as many answers to our question as there are academics, management gurus, consultants and leaders. If indeed the answer to our question ‘why are some organizations more successful than others?’ lies in the published body of knowledge, we have not yet found it.
Our resultant hypothesis is that all organizations, whether they are commercial or not-for-profit, are on a trajectory towards what we call their default future – where they will end up if they do nothing beyond their currently planned course of action. If the default future is an acceptable future state, then no further action is needed – just enjoy the journey. If, however, this is deemed unacceptable, then decisions need to be made and actions taken to change the trajectory to an improved future. In many respects, there’s nothing new in this thinking – it’s always been the role and accountability of leaders to steer their organizations to a better future. What’s different is accepting that organizations are on a given trajectory for a reason. Only by understanding and addressing these factors can leaders stand any chance of successfully changing their organization’s default future.
This thinking has led us to believe that the purpose of strategy is simply to change an organization’s trajectory to one that will take it to an improved future.
In essence, we have developed a new approach to the practice of assessing, developing and executing strategy. It is an approach that begins by identifying and assessing the factors that define the current trajectory and the default future it will bring. Only then can alternatives be explored and informed choices made about which trajectory to pursue.
We begin by making the case for a different approach to assessing, developing and executing strategy. In chapter 1 we look at evidence indicating that over the past three decades the success rate of organizations changing their trajectory to an improved future has not significantly improved. We argue that most companies continue to confuse ambition and targets with strategy, and we present evidence to indicate that most mergers and acquisitions (M&As) destroy rather than create value, and that the majority of transformation programmes fail to deliver their target outcomes. This evidence makes a compelling case for a different approach to assessing, developing and executing strategy.
In chapter 2 we explore this notion further by arguing that it’s the accountability of leaders to confront their organization’s default future. Furthermore, it’s equally important that they understand the exogenous (external) and endogenous (internal) navigating forces that determine the current trajectory – what we call the trajectory of strategic reality. Only by understanding the nature and influence of these navigating forces can informed choices be made to change the organization’s direction.
In chapter 3 we focus on one of these endogenous navigating forces – the capabilities that an organization has built up over time. Acting like strong muscles, these organizational capabilities can serve as powerful anchors, keeping an organization on its current trajectory of strategic reality. In chapters 4 and 5 we explore how exogenous forces ultimately shape strategic opportunities and present this as an organization’s trajectory of strategic opportunity.
In chapter 6 we introduce the notion of an organization’s trajectory of strategic intent. This is informed by strategic opportunities and takes into account what is practically possible by assessing the forces that determine the current reality.
In the last three chapters we offer some approaches for changing an organization’s trajectory of current reality to bring it in line with the trajectory of strategic intent. In chapter 7 we explore how to make strategic intent more meaningful to others, and in chapter 8 how ‘pulling from the future’ is more effective than ‘pushing from the present’. We conclude with chapter 9, in which we argue that successfully changing an organization’s trajectory begins with exercising collective – as opposed to individual – leadership.
This book will not tell you what your strategy should be, nor will it aim to present a multi-step methodology for developing a strategy. Its purpose is to share insights that explain why developing and executing strategy is such a challenge. We certainly wouldn’t presume that we know enough about your organization, or the context within which it operates, to know what you need to do to put it on a trajectory to a better future. However, we do believe that we know what questions to ask and what conditions need to be put in place for an organization to have any chance of successfully changing its trajectory.
We must thank the many CEOs and executives with whom we have worked over the years. We value the opportunities they presented to us and their trust and confidence in our ability to help them succeed. We are also indebted to our colleagues, past and present, whose input, constructive challenges and candid feedback helped shape our thinking. As we argue in chapter 4, the most powerful form of learning is experiential, and we are grateful for the learning experiences we have had over the past 30 years and the insights they have brought us.
Finally, we know that some of the content of this book will be familiar to you – for which we make no apology – and that some of it will be new. What is different is the way we have brought it all together, so that it is both relevant to the challenges today’s organizations face, and of practical value to today’s leaders. Our goal is simply to share our thinking in the hope that it will inspire and help those who are passionate about changing their organization’s future for the better.
A much-needed guide for all those concerned with strategic action.Professor Elena P. Antonacopoulou, GNOSIS, University of Liverpool Management School
The authors’ praxis for exploring a default strategy is well argued and clearly presented, with a vital recognition of organizational realities.Michael Earl, Emeritus Professor of Information Management, University of OxfordPurchase Now