Creating a Strategy That Works: Five Acts Fit Together

YouNeedanInnoThe most farsighted enterprises have mastered five unconventional practices for building and using distinctive capabilities.

Here is an excerpt from a recent article co-authored by Paul Leinwand and Cesare Mainardi, featured in business+strategy magazine, published by strategy&PwC (formerly Booz & Company). To read the complete article, check out others, lerarn azbout the fifrm, and obtain subscription information, please click here.

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How the Five Unconventional Practices Fit Together

At one business school where we presented these findings, a student raised his hand. “I get that the conventional wisdom is problematic,” he said. “But most of our professors are telling us to do those things.”

Executives tell us something similar. The five acts of unconventional leadership contradict what many believe is the right way to run a business. Companies that focus on growth are universally applauded, even if the new offerings don’t fit well together. Functional excellence, organizing for success, going lean across the board, and agility are all regarded favorably in business circles. But those are precisely the approaches that often lead to a gap between strategy and execution.

Another insightful comment came from a high-ranking official of a branch of the U.S. military. The conventional wisdom, he said, accurately captured the management style of his overall organization. “But there are small groups that do [the unconventional acts] very, very well.” These groups, he said, were typically the special forces units: Green Berets, Navy SEALs, and other elite groups that take on highly sensitive jobs. Most companies also have similar elite groups, which are insulated from the rest of the enterprise. Company leaders delegate the premium activities to their special forces. But if you truly want to have strategy linked seamlessly with execution throughout your company, you can’t rely on a few extraordinary performers. You have to create distinctive capabilities that will scale across your enterprise, involving everyone in applying them to all the company’s products and services. That takes a level of attention, and a way of thinking and acting, that may seem difficult to achieve at scale. These five acts embody practices that help companies reach that state.

The five acts themselves are so interconnected that you have to adopt them all together. If you overlook any one of them, you fall back. For example:

o When you don’t commit to an identity, you risk becoming scattered among a variety of objectives. It is all too easy to continually shift your focus — to deal with exigencies and never quite build the capabilities you need. You gain a right to play in many markets, but a right to win in none.

o When you can’t find a way to translate the strategic into the everyday, you have to rely on your existing functions to achieve your strategic goals. You risk becoming a company that perennially promises great things but never seems able to deliver.

o When your company doesn’t put its culture to work, your people feel trapped and disengaged. Yours might be one of those passive-aggressive companies where new strategies fail because people pay lip service to them without believing they will last.

o When you fail to cut costs to grow stronger, you starve the parts of your company that matter the most and overindulge those you don’t need. Your critical capabilities lose support, and they blend and blur into the rest of the enterprise.

o If you can’t shape your future, you run the risk of falling behind competitors that are shaping theirs. You might lose the opportunity to become influential and thereafter be dependent on more coherent and thus more dominant players in your industry.

We do not hold up the five unconventional acts as the only path to success. But it is the only path we know that provides this kind of long-term, sustainable success. It is also an appealing path that feels intrinsically rewarding. Even taking a few steps in this direction can boost a company’s energy and morale. To be sure, it requires you to have the courage of your convictions. You have to be discriminating and decisive, willing to say no to opportunities that don’t fit the strategy and persistent enough to bring the entire organization along for the ride. But it is not a leap into the unknown. There is a great deal of precedent, and you are in good company: Some of the most renowned, creative, and influential enterprises in the world keep moving forward along this path.

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Here is a direct link to the complete article.

Paul Leinwand is global managing director of capabilities-driven strategy and growth for Strategy&, PwC’s strategy consulting business. Based in Chicago, he is a principal with PwC US, an adjunct professor of strategy at the Kellogg School of Management at Northwestern University, and a contributing editor of strategy+business.

Cesare Mainardi is an adjunct professor of strategy at the Kellogg School of Management and a member of the school’s global advisory board. He was previously CEO of Strategy& and, before that, of the global management consulting firm Booz & Company. He is one of the principal architects of the capabilities-driven strategy approach and a contributing editor of strategy+business.

Also contributing was Strategy& campaigns director Nadia Kubis, a director with PwC Switzerland.

This article is adapted from Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap, by Paul Leinwand and Cesare Mainardi, with Art Kleiner (Harvard Business Review Press, 2016).

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