Developing your business strategy is exciting. You get to consider the possibilities and imagine where your company will evolve. And if you’re bold, which I think you should be, you will imagine a future that’s slightly outside of your company’s reach.
That gap between where you are today and where you want to move is the strategy gap, and it’s too often misunderstood.
Teams respond to the strategy gap in a few ways:
- They pump the brakes: The team sees the lack of resources and capabilities in the organization, and they hesitate. The gap intimidates them, and they hang onto the status quo.
- They leap and fall down: At the other extreme, some teams dive in too soon only to hit roadblocks and landmines, because the organization is not prepared for the new reality. The team uses phrases like “iterate” and “fail fast, fail often,” and wastes a lot of time and cycles trying to implement a strategy they don’t understand.
- They make the plan really smart and logical: To mitigate the risks, management teams will work deliberately to simplify and clarify their plans. They assume if their strategy is logical then their employees will figure out what to do. This too doesn’t work.
The problem with all three approaches is they overlook the fundamental issue: the organization needs a roadmap of how to change.
For example, a mid-sized IT staffing firm developed a growth strategy to double the size of the business by expanding its operations into two new cities. The strategy was sound. The firm evaluated the competitive landscape, secured contracts with key accounts ahead of time, and defined the budget, resources and timelines they anticipated it would take to get the new divisions profitable and sustainable.
The IT staffing firm built a really smart and logical plan, but a year after the launch they were reeling from a series of mishaps:
- High turnover of key personnel in the new offices
- In-fighting over commissions and account ownership between the sales reps in the head office and the new offices
- Breakdowns of processes and systems for managing teams in different locations
The executive team was ready to throw in the towel at the end of the first year. They’d invested over $1 million into the expansion plan, and on the current trajectory it looked like it would cost another $1.8 million to get things on track.
The breakdown in the strategy was avoidable, because the team failed to develop a roadmap for how it would develop the capabilities to manage a multi-location business.
In every hero’s journey the hero is taken through a series of quests to develop his knowledge, skills and processes. For instance, in The Lord of the Rings Frodo Baggins takes on a series of adventures and challenges after leaving the Shire. With each stage he gets a little stronger and wiser, and becomes a little more like the hero that will ultimately destroy the ring.
In business strategy, we have to overcome a similar gap. Your company doesn’t have the knowldge, skills, and processes it needs to realize and sustain the end state defined in your strategy. This is your strategic gap, and if you don’t address the gap you won’t achieve your goals.
Capability development is one of the most overlooked areas of strategic planning, but it’s fundamental to your success. What knowledge, skills and processes does your company need to acquire or develop to achieve its objectives?
Developing capabilities is far less glamorous than buying equipment or signing contracts. It’s hard, deliberate work to evolve the behaviors and culture of your company. One of the tools I like to employ in this process is to define 1 Big Goal and 3 Priorities / Quarter / Department.
Treat every quarter as a mini-quest for your organization and its teams. In each quest you are developing the knowledge, skills and processes your company requires to fulfill its strategy.
You can make these quests smart and logical. Identify the gaps in your annual strategic planning. This will give you the roadmap for which capabilities your teams need to develop over the next year or two.
What do you think?