I have been working with a team preparing for a new multi-company research project – Continuous Business Strategy – that will kick-off in mid-November. I think this will prove to be an interesting project, to say the least! Certainly, the research team has already engaged in several heated discussions and come across some intriguing information in our secondary literature research.
For IT leaders, I can’t think of many topics that are more pressing or deserving of a fresh look than business/IT strategy. I’ve been involved in many strategy efforts over the years – from strategy planning for my own company when that was my gig, to business and IT strategy planning for clients, strategy reviews, strategy refreshes, and so on. I’ve seen a lot of problems and dysfunctional behaviors in the name of strategy over the years. Even the term ‘strategic planning’ takes on all sorts of meanings – some deserving of the label ‘strategy’ but many not. When the issue is “IT strategy,” the level of dysfunction increases significantly. In this post, I will take a couple of common dysfunctions I come across frequently that I think will improve at strategy shifts from a periodic to a continuous management tool.
1. IT strategy is not the point – it’s all about business strategy.
I recall a session many years ago (I’m guessing it was around the mid-80’s) where I was speaking at a CIO conference in Phoenix (it could have been a Society for Information Management event) following the illustrious Professor Warren McFarlan. After his presentation on IT strategy, during Q&A a CIO asked, “In my company, if there were a business strategy, I could craft a dynamite IT strategy. But there is no business strategy – what should I do?”
Warren, who could be sometimes be pretty blunt and confrontational and an ‘in your face’ kind of teacher, virtually attacked the hapless CIO. “You CIO’s are always complaining about lack of business strategy,” taunted McFarlan. “You draw two boxes, one above the other. The top box you label ‘business strategy’ and the lower box ‘IT strategy’ and you grumble that the business strategy box is empty. Listen up – the business strategy box is always empty! And it’s your job to fill it!”
This was one of those frame-changing moments for me. I was well aware of the reality, but McFarlan’s blunt and visual description of the circumstances validated my worldview around strategic planning. Most of my IT strategy development work with clients has been business strategy development in disguise. In fact, over the years we developed a business outcomes-based approach to IT strategy that on the one hand forced business strategy to the surface, while on the other hand avoiding offending anybody by insinuating they did not have an actionable business strategy. I think we will find that shifting to a more continuous strategy process will have the effect of better integrating business and IT strategy formulation activities. Their separation has always been for me an unhealthy dysfunction – business strategy formulated in a way that is devoid of appreciation for the information and IT possibilities.
2. Much ‘strategy’ effort is not very strategic.
A lot of work done in the name of strategy is in reality tactical – often more about budgeting than competitive positioning – more about status quo than change. I’ve seen some extremely robust strategy planning efforts involving large numbers of teams from across the company on a several-month, once every three years effort. On the face of it, this looks like a great idea. In practice, it often is not very effective. I recall one client where such a planning initiative was going on (I think the third of fourth time they’d run this kind of effort) and the management committee crafted the strategy over about 12 hours across three sessions. The formal corporate initiative was largely ignored. Again, I believe we will find that at its best, a more continuous approach to strategy formulation will improve the strategic quality of the result (though this will not necessarily be the case.)
3. Strategy formulation and execution are too loosely coupled.
Many scholars and researchers have commented on the formulation/execution gap. Peter Weill differentiates appropriately between “strategic intent” and “current strategy,” and Gary Hamel provocatively suggests, “If you want to understand the real strategy, look at what people are doing!” There are almost always disconnects between the strategy as formulated and the rewards and recognition systems and hidden organizational logic that drive management and employee behaviors. Once again, I believe we will find that the shift to a more continuous strategy process will tighten many execution gaps.
I will delve deeper in future posts into strategic planning dysfunctional behaviors and the promise of leveraging Web 2.0 to move to a more continuous and productive strategy process.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]