In the recent April 2008 HBR piece by David Collins and Michael Rukstad titled, Can You Say What Your Strategy Is?, the authors offer the following visualization of the importance of having a clearly articulated strategy:
Think of a major business as a mound of 10,000 iron filings, each one representing an employee. If you scoop up that many filings and drop them onto a piece of paper, they’ll be pointing in every direction. It will be a big mess: 10,000 smart people working hard and making what they think are the right decisions for the company—but with the net result of confusion…
If you pass a magnet over those filings, what happens? They line up. Similarly, a well-understood statement of strategy aligns behavior within the business. It allows everyone in the organization to make individual choices that reinforce one another, rendering those 10,000 employees exponentially more effective.
The article goes on to delineate the elements of a clear strategy and outlines both the analysis and supporting documents that should be shared throughout one’s organization to take advantage of that strategy (you should also check out Dave Norton and Bob Kaplan's Strategy Map). Collins and Rukstad then make some observations that scream E2.o. However, I believe that there is an oversight (my opinion!) that pulls up shy of the true opportunity that we have. The article reads:
The process of developing the strategy and then crafting the statement that captures its essence in a readily communicable manner should involve employees in all parts of the company and at all levels of the hierarchy. The wording of the strategy statement should be worked through in painstaking detail. In fact, that can be the most powerful part of the strategy development process. It is usually in heated discussions over the choice of a single word that a strategy is crystallized and executives truly understand what it will involve.
The authors begin the preceeding vignette talking about employees in all parts of the company helping to develop the strategy and, then, they end the same paragraph with only "the executives being involved in the heated discussions" that allow them [executives] to truly internalize what the strategy will involve? Is there no way that we can allow the heated discussions to be transparent throughout the organization?
Imagine if we could have the good, the bad, and the ugly of the strategy dialog open to the organization - like the Centre Pompidou in Paris – where all of the supporting structure and systems, such as the escalators, are exposed to the outside world.
Color-coded ducts are attached to the building's west façade... blue for air, green for fluids, yellow for electricity cables and red for movement and flow. The transparency of the west main façade allows people to see what is going on inside the centre from the piazza, a vast esplanade that the architects conceived of as an area of continuity, linking the city and the centre. [quote link - Centre Pompidou website, picture link - Wikipedia]I can only dream of being in an organization that is designed to run itself with the transparency and intentionality to always “link the city and the centre”. I believe that a liberal use of E2.o applied to the strategy development process could lead to a profound mobilization of the human capital within our organizations. But I understand the fears that run wild within our corporations -> our competitiors will get our information!
As Andrew McAfee concludes at the end of a post in 2006 on E2.o Insecurities,
Imagine two competitors, one of which has the guiding principle "keep security risks and discoverability to a minimum," the other of which is guided by the rule "make it as easy as possible for people to collaborate and access each others' expertise." Both put in technology infrastructures appropriate for their guiding principles. Take all IT, legal, and leak-related costs into account. Which of these two comes out ahead over time? I know which one I'm betting on.
In conclusion, the transparency enabled by E2.o could unleash a thrust of unstoppable execution within our organizations. Do you agree?
What do you think? Have you seen any real-life successes in "open strategy" dialog, please tell us.
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3 comments:
That's certainly a provocative proposition. I wonder if one implication might be a more fluid (and less recognizable) conception of strategy, measurement and management. Let me explain.
In the [simplified] traditional view, strategy is formulated and communicated, measures and targets are set accordingly, and people work toward those targets. Ideally, working to those targets will "add up" to execution of the strategy.
Next, consider a traditional framework that is merely more collaborative and transparent ("e1.5" maybe?). It still happens once per year, but there is still the concept of "final" and the strategy is then communicated, executed, etc.
Finally, consider an approach that fully embraced E2.0, as you describe. What might that look like? Might it be more of an ongoing discussion at many levels of the company, incorporating new knowledge and ideas every day? Could something like that possibly be coherent and stable? I'm skeptical, but the thought experiment could push us in a productive direction. I'm guessing some companies have already hit on pieces of this.
P.S. I mostly love Pompidou, but there were a few [not-safe-for-blog-discussion] exhibits that made me question public arts funding, if not humanity itself. Yikes.
Organizations by their very nature are command and control oriented. Any effort to break down that structure is confronted with vigor. In the past, we held positions of authority and knowledge regardless if it was actually true. For example, suppose you wanted to find the SOA Expert in the company. In the old days, you simply pulled out the organization chart and followed the yellow brick road. With Enterprise 2.0, that may be the last choice in methods of location. Ideally, you want the person that has the real experience, the knowledge on the front line, and the one willing to open up and share that information. The real SOA expert may be located on the business IT side where the services are delivering value not some pie in the sky person. Yet, without the social tools you will be forced to accept mediocrity. Not too long ago, I remember berating a manager on the idea of bringing in some “Consultant” that had less experience, didn’t know the business, and seemed to have a limited ability to produce results. Yet, they business did just that. Instead of looking internally to the in-house expertise, they CYA’ed themselves by bringing in the high dollar boys. Hopefully, those days are gone and companies can realize they actually have some of the best assets in the world right in their own organization, if they could just let go of that stupid organization chart.
bob i - Yes. I do think it could be seemingly chaotic for a traditional business. However, to r. todd's comment - it would allow the decentralized, possibly front line experts already in the business to participate in the dialog. I think Google is trying to do this but we'll see if they can last through their recent stock pressure!
r. todd - I agree that the command and control structure seems problematic but we need some structure, don't we? It would be interesting to try the organizational theories of Stafford Beers and others in the domain of cybernetics. It seems to allow organizational structure but pushes the control elements down into the "sense and respond" activities. Not sure if you have considered this type of thing. I'd be interested if you have. I like the idea of leveraging decentralized autnomy but I also like the idea of a structured "nervous system" and "circulatory system" that affords some hierarchy for communication and resource allocation.
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