What’s with all the “strategy bashing” of late? How could sound strategic planning possibly be a bad thing? Things have spun so far out of control that I recently had a CEO ask: “Is strategy still relevant in today’s business world, and if so, what role does strategy play in the overall make-up of a CEO’s duties and responsibilities? Let me begin by stating that strategy has never been more relevant than it is today. With all of the current emphasis on tactical execution I guess I understand how a question like this could be posed, but wow, what a sad commentary on the state of executive leadership when a CEO asks whether or not strategy is relevant. In today’s post I’ll examine the role of strategy in business, as well as the CEO’s responsibilities therein…

Strategy vs. Tactics, Instead Try Strategy AND Tactics

Let me be as blunt as I can – The issue should not be strategy vs tactics, but strategy and tactics. While separate functions and disciplines, one cannot prosper without the other. Strategy is what provides the tactical road-map, and it is tactical execution that validates and delivers strategy. The noise attempting to lift one up above the other is simply more unneeded rhetoric. The best strategy cannot succeed without tactical execution, and tactical execution is much easier to achieve with the clarity provided by a sound strategy.

With all of today’s emphasis on pleasing investors by meeting short-term financial expectations, it is not at all uncommon for many executives to press for better execution when what they really need is a better strategy. Conversely, other executives change strategic direction when what they should do is demand better execution. The truth of the matter is that a sound strategic plan can be executed with a high probability of success, whereas a flawed strategy is almost impossible to execute profitably.

The CEO Has the Ultimate Responsibility for Assuring Strategy Delivery

The emphasis for CEOs needs to be on creating long-term sustainable value for shareholders without sacrificing short-term tactical interests. While in most cases a sound strategy will allow a CEO to have his/her cake and eat it too, if you must sacrifice one over the other, you would be well served to place long-term interests above short-term objectives. History has shown us on many occasions that it is quite possible to win the battle and lose the war. CEOs must learn to fight the battles that need to be won, and not just the ones that are easy to win.

Please read the following statements very carefully…The CEO is often times the chief architect of corporate strategy, and has the ultimate responsibility for assuring the delivery of a strategy, which is consistent with the corporate values and vision. One of the primary duties of the CEO is to communicate, evangelize, and lead the company in the implementation of the corporate strategy. Absent an over abundance of blind luck, a company’s strategic planning process will be critical in the eventual success or failure of the enterprise. CEOs must view themselves as being completely accountable and responsible for the corporate strategy, regardless of whether they were the original architect.

While executives must learn to view strategy and execution as being inextricably linked, they also must come to understand that strategy should always drive tactics. The tendency for some CEOs to let tactics determine the strategy is the classic example of reactive vs. proactive leadership. It also represents a great illustration of letting the tail wag the dog. A lack of strategic focus in dictating tactical initiatives is a ready-fire-aim approach to leadership and will result in higher costs, a perpetual state of chaos, and places a higher emphasis on activity vs. productivity.

There is so much focus on execution these days that it is not uncommon for me to receive a few e-mails each week with headlines that read: “Screw Strategy” or “Tactics before Strategy.” While I’m all for exploiting trends, and I appreciate a good marketing hook as much as the next person, these e-mails from so-called business experts can be both misleading and dangerous to those readers who don’t possess the savvy to understand that they are just being pitched on a product and not being given sound counsel.

As much as some of my direct marketing friends wish it weren’t so, there are certain inevitable truths that do exist in business. Listen, I have no problem with creating velocity and leverage, but as fluid as business is today, most of the “short-cuts to success” being marketed today constitute form over substance. You see business is much like an algebraic formula, in that while there are certainly formulaic short-cuts that can be taken to solve an equation more quickly, the one thing that will provide an incorrect solution 11 times out of 10 is when the order of operation is skewed.

The Successful CEO Strategy Model

The following visual is one I developed more than 20 years ago, and the interesting thing is that it’s applicationally as sound today as it was back in 1988. The orange horizontal line that cuts the image in half is what I refer to as the leadership line. When working above the leadership line you are working “on“ the business in a true leadership capacity, and when working below the line you are working “in” the business in more of a management capacity.  While all good leaders spend time on both sides of the line, the most effective leaders spend as much time working above the line as possible. Follow this methodology and the ambiguity surrounding the “why” and “where” to spend your time will start to clear itself up. 

For those of you familiar with my work, you’ll see that I have consistently espoused that a bias toward action and tactical precision are essential to achieving sustainable success. However, I am also clear in my belief that misguided and ill-timed/advised tactics can also create huge problems for any business. The bottom line is that strategy matters, and that as a CEO, strategy is your responsibility. The challenges associated with leading corporate strategy initiatives are not easy, but neither is the burden of leadership. If you’re not up to task at hand you don’t deserve the title of CEO…it is harsh but true.

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Re-posted with author Mike Myatt’s permission, he runs a great blog at http://www.n2growth.com/blog/ and the original source for this post can be found here:

http://www.n2growth.com/blog/in-support-of-strategy/

This series takes a look at the role of the CIO, the current technology landscape, where the gaps are, and this final piece looks at the emerging technology landscape and what the future holds. This is the last post on the future of business to technology alignment. 

This four part series covers the entire breadth of the business to technology landscape of the future –, IT organizational alignment, business alignment, and future technology alignment for success in tomorrow’s marketplace. 

What Does the Future Technology to Business Alignment Hold – Future ERP, SAP, and IT Value

A number of changes on the horizon will produce a number of winners and losers in the technology marketplace.  Those software companies, system integrators, and consultants who persist in delivering only solutions narrowly tailored to address operational concerns will find a shrinking landscape of customers to sell to, and the competition for the market space will drive prices down to commodity status.  Together with this, the CIO, IT Director, or IT Decision Maker who focuses on the operational side of the equation, or the lagging indicators will continue to face greater and greater cost containment requirements no matter how well the business or economy performs.  As the CFO and COO continue to press for getting more for less from the IT department to cover the cost side of the lagging indicator equation the senior level IT decision makers will find their career prospects more limited.

The way to propel an IT career forward in the years ahead will require a demonstration of business value within the overall organization.  The CIO will need to carry the torch for bridging the business gap between the business lagging and leading indicators of business health.  The important focus both now and in the coming years is on the demand side of the business equation.  That demand side is a focus on customer acquisition, customer retention, sales conversions, up-selling, cross-selling, and customer centered innovation.

A New Wave Technology Model for IT Decision Maker Success

This is a technology alignment model, it shows one possible method for CIO, IT Director, or other IT decision maker to achieve success in the demands to advance the business.  Keep in mind, this is NOT an organizational model, it is a technology alignment model or a business to technology map. 

This model represents the role of the CIO as the bridge between the lagging side of the business (finance, people, process) and the leading side of the business (strategy and sales).  In this model, although the CIO position appears above the CFO and COO organizationally they are generally more equally aligned, or, in many organizations the CIO may answer to the CFO.  The correct CIO role is one of technology integration between the lagging and leading sides of the business.  The CIO role with the use of technology is the “glue” between the two sides.  For the CFO who has responsibility for the CIO and technology spend the surest way to ensure company health and to promote business needs is to encourage the adaptation of the CIO role as a bridge between the CEO and CFO.  As is often the case, success here will cause the company ship to “rise” in the marketplace and a rising ship benefits all participants.

CIO Alignment and Key Responsibilities of the Future Business Aligned Technology Organization

The unfortunate reality is the CIO alignment in most modern organizations is almost exclusively housed in the lagging indicator category (see Part 2 and Part 3 of this series listed at the end).  The zealous focus on only lagging indicators, with its heavy reliance on cost cutting (through automation, performance improvement, etc) leads to cost cutting in the IT department itself. 

After things are working and then automated the IT department is pressed into maintenance mode because the business does not see the revenue generation prospects of technology–, they fail to see the possibilities of promoting customer retention, customer acquisition, innovation, and marketplace analytics. 

The technology map of the future will focus much more aggressively on the customer integration into the business process.  And collaboration activities will occur across the entire value chain, on both the lagging and leading indicator side of the business.  Future collaborative integration will produce new market intelligence, product or service innovation, early defect detection and correction, and other business possibilities which help to retain and acquire new customers.

The future of the successful technology application is going to depend heavily on the ability to drive innovation and process improvement around customer retention, acquisition, and product or service innovation.  There are already signs this is beginning to occur in some of the leading edge companies that this is the future of business technology.

Part 1:  What is the Proper Relationship for the CIO, CEO, and CFO?

In the first part of this series we looked at the changing business landscape and what it means to the CIO, IT Director, IT Manager, or other key technology decision makers.  From a high level the current global business competition, as well as economic issues are directly affecting the C-level executive requirements and the CIO – CFO – CEO dynamic.  This article reviewed how and where the CIO role is coming under tremendous pressure and how to change the current dynamic by more appropriately partnering with the CFO and the CEO.  This partnership is a critical business bridge between lagging business indicators of business financial and process health on the CFO – COO side of the business house and the leading indicators of sales and product or service pipelines on the CEO side of the business house. 

Part 2:  CIO, CFO, and CEO Alignment – Why ROI is Lacking from Today’s System Landscape

The second part was an overview of the current system landscape and its focus on business processes and the emerging trend of trying to focus on the customer.  This piece also looked at the future business landscape and how the technology focus and direction will be permanently changed no matter what happens with the economy and global competition.  Because the technology marketplace (business consumer) is becoming more sophisticated and more attuned to business / technology alignment, the IT dynamic is going through a structural change.  The whole technology sector is slowly moving away from the “operational excellence” value proposition to the “customer focus” and “innovation” areas of the business.  Very few of the consulting companies and few of the application vendors see this sea change and are doing little to address it.  This is the area of technology market winners and losers of the next 20 years.

Part 3:  Changing the Direction of SAP, ERP, and IT Applications to Focus on the Customer and Innovation

The third part in the series looked at current technology landscapes and how they are aligned and then looked at future technology landscapes.  A brief review of the supply side and the demand side of business shows that unless you have lots of customers (demand) to fill a bigger and bigger pipeline (supply) then your business model collapses.  While it is hidden during good economic climates, any disruption in those economic conditions which fails to fill the capacity pipeline points out the glaring insufficiency of the “operational focus” to technology.  During any economic disruption, or any reduction in demand from customers for your products or services the current technology model falls apart. 

Part 4:  Future Technology Landscape Alignment for the CIO, IT Director, or Key IT Decision Maker

The final part of the series looks at the emerging technology landscape and what the future holds.  It lays out an emerging technology landscape model which has some re-alignment and some components already in use by some of the world’s most successful companies.  A new alignment of technology with the customer facing processes, and the use of social or collaboration tools across the enterprise with a clear business objective is explored.  The driver for the future change will be because the business does not see the revenue generation prospects of technology–, they fail to see the possibilities of promoting customer retention, customer acquisition, innovation, and marketplace analytics.  The new technology model looks to change that dynamic.

When the client is not heavily involved, expect plenty of project surprises and no ownership in the plan.  The ingredients for optimal success require active client participation at every stage of the project – from project planning to project closure.

Anyone that has been around ERP long enough understands meaningful client involvement in the project is critical for success. However, it never ceases to amaze me how many implementation projects start with the software consultants behind closed doors developing a project plan in a vacuum. They later unveil the plan as some artful piece of work and present it to management for sign-off.

Interestingly enough, even some of the best software consultants are guilty of this, and there are two big problems with this approach. First, it prevents the client from getting heavily involved to take more ownership of their project from the start. Secondly, it involves a blind leap of faith in your software consultants, which is never a good idea. No matter how much analysis consultants do, they will never be aware of all the subtle aspects of the organization or project that could have a major impact on the validity of the plan. This is one reason why ERP projects “fail to meet expectations” in the areas of software, time and cost.

ERP Project Ownership and Business Participation

The fundamental problem is “blessing” something is very different than “owning” something. When the consultants develop and present the plan (with only token client input), it is now the consultant’s plan, not the clients. This is often reflected in senior management’s message to consultants; “great, go forth and make it happen” and by the way, hurry up.

Though the plan is endorsed by senior management, in the meantime the internal project manager, project team, key managers and employees in the trenches are not buying it. The reason: They have legitimate concerns that no one cares to hear or address. This has very real consequences, not only in the quality of the planning deliverables (plenty of project surprises), but also from the standpoint of managing change and internal commitment to the project. In other words, we have cut out of the process key people within the organization that play a big part in implementing the plan!

First, many confuse the sales proposal (from the consultants selected) as a project plan (fixed price contract or not). As ridiculous as this may sound, it happens all the time. No doubt, it will contain statements of project objectives, scope, responsibilities, schedule, resources, risks, consulting cost, assumptions, etc.  However always remember, the acceptance of the sales proposal signifies the end of the sales process and it is just that; a sales pitch not anything close to a project plan (we can actually use or believe). At this stage of the project the sales pitches are over, it is now time to deliver!

Also keep in mind when some consultants develop a project plan (project charter, etc) they use “templates” and then attempt to fill in the blanks. Nothing wrong with templates as a starting point, but the plan could end up a lot of hollow words, pretty gantt charts and formality, with very little substance. This is about lack of project management experience and templates will never make up for that.

ERP Project Scoping and Planning Phases to Refine Project and Implementation Plans

Once consultants are selected and the client project team somewhat formalized, every project should have a separate and distinct “scoping and planning” phase with specific deliverables. This represents the opportunity to analyze the business processes, scope, current systems, and many other aspects of the organization in greater detail. I am by no means recommending “paralysis through analysis”, but you must do your homework or pay the price later in the form of rework, delays, and cost overruns.

The consulting project manager can help lead and facilitate the planning process working closely with the client team. In fact, if the consulting project manager does not add value in this area, he or she will probably not add value anywhere else. When done correctly, the benefit is getting the client project manager, executives, and the entire client project team heavily involved and more committed to the plan. In the end, this improves the quality of the plan and ability to execute it.

A good project planning process results in a final “baseline” for project scope, schedule, budget, etc. that reflects project objectives, reality, and is understood by all key stakeholders. In other words, it is now a plan we can believe and support. It also becomes a tool to measure progress and a “handle” to manage and control the project. A bad project planning process results in a plan that is tossed out the window and we are now operating in the blind or with a totally different reality. Worse yet, we start making dumb project decisions to “catch up” to a schedule that was bogus to begin with.

It has been my experience the project planning deliverables of scope, schedule, and the consulting budget have the most influence is setting the wrong project expectations. Therefore, in my next three blog entries I address these topics with the goal of helping the client avoid the subtle pitfalls while becoming more knowledgeable and engaged in the ERP planning process.

The next ERP Project Planning blog topics in this series include:

Part 2:  The Twelve Dimensions of Project Scope

Part 3:  Developing a Project Schedule (We Believe and Can Support).

Part 4:  Ways to Estimate or Validate the Software Consulting Budget.

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Author Steve Phillips runs a Blog entitled Street Smart ERP - Visit his site for more great insight and commentary.