STRATEGY VS. TACTICS AND THINKING VS. ACTION

“We absolutely need a more consistent focus! The competition is way ahead of us and we’re still not stepping on the gas!”

The CEO has spoken and everyone agrees. When it’s time to say “Who can help make the right plan and finally set off?”, the usual suspects are quickly at the starting line.

Kurt is appointed without further ado, as is Hermann Müller, who thinks he has to comment on everything, even if it is not relevant to him, and Egon, the meeting veteran who doesn’t want to miss any news in the company. In any case, the new girl, Ms. Schmidt, should also get involved to provide fresh impetus. After all, there are 14 participants and therefore too many who come together for “strategic planning” (more on this later).

Unfortunately, the people responsible for sales and marketing, who should actually be on board, are missing. To make matters worse, those present talk about something that doesn’t exist: “strategic planning”. What on earth is that supposed to be? It’s either a strategic blueprint – a promising target state to work towards – or a plan: the prioritization of the necessary puzzle pieces and steps to realize the strategy bit by bit. It can only ever be about one or the other, and whenever someone talks about “strategic planning” in a meeting without contradiction, you should intervene immediately and clarify what it is actually about.

In the above scenario, we hear a lot about what strategy work is not, and experience how the subsequent implementation is already in danger long before a target-oriented strategy has been designed. The blossom is already doomed to wither before the flower is properly in the ground.

Before we can address the challenges and methodology of rapid strategy implementation in this issue of SoE, it is necessary to place the concept of strategy in the context of the company in terms of time and content. The management of a company always operates in one of four dimensions (Fig. 1).

Companies and their managers who want to generate more speed and higher quality in strategy implementation need to be clear about which dimension they are operating in. What these dimensions have in common is the need to always decide what is to be achieved and when. Strategic and operational management must never be mixed up. That’s why meetings should only ever be about one or the other, because otherwise the human mind very quickly focuses on the operational.

Practical tip

Either a strategy meeting or a planning meeting takes place – never both at the same time! Otherwise, even in the strategy meeting, we only talk about activities and what needs to be done specifically, but not about the strategy itself. The human tendency to talk too quickly about what actually needs to be done is simply too great!

Let’s briefly go through the four dimensions using an example to clearly define them. Let’s imagine a system house that develops software for tax returns and accounting, offers the introduction of various systems and markets seminars on its product mix via a subsidiary.

Portfolio/Financials (I)

This quadrant is about entrepreneurial foresight, determining which business areas are still viable and which are under threat. If the existing face-to-face academy faces competition from online and blended learning formats, the company must either divest itself of it or invest in a digital future. The earlier the necessary foresight takes effect and leads to decisions, the more prudent the company’s actions will be. Portfolio work takes place in a time window of one to five years into the future and consists largely of analytical thinking.

Beyond the horizon (II)

Strategies have a longer-term effect over a period of one to five years. They look far beyond the current business. Contrary to popular belief, strategy is less a logical and rational activity than visionary, emotional work on the future state of the company. A strategy that merely aims to optimize the status quo and does not clearly transcend the status quo is either no strategy at all or not worth mentioning. Quadrant II is dominated by creative thinking – for example, the system house imagines how it will completely turn the market on its head in three years’ time with cloud-based, AI-supported and therefore fully automated accounting without accountants.

Operations (III)

Operations stands for the day-to-day business of generating sales and profitability in existing business areas and constantly optimizing processes and structures for the purpose of operational excellence. Whenever money for goods or services is received from the customer as a result of strategic work in advance, this is the time for operations, where clever operating results and control parameters are required. The time horizon in quadrant III is correspondingly short-term. Thinking serves to optimize, otherwise action dominates.

Strategic progress (IV)

Even if a large part of the strategic work only leads to results that can be accounted for in the long term, the homework for this must be done almost daily. To achieve this, it is important to implement the strategy on an equal footing with operations.

Just as you look at the BWA, P&L and other KPIs every month at an operational level, it is important to keep an eye on the decisive strategy progress indicators that tell you whether you have made progress with the implementation, the achievement of the target state beyond any activity and milestone orientation.

In practical terms, this means, for example, not only discussing the latest results and key operating figures with business unit managers, but also always discussing the few progress indicators that the respective manager uses to determine whether they are getting closer to the strategic target. For the sales manager, for example, this would mean discussing not only the current sales and customer figures, but also the three key figures that provide information on the degree of development of the new market or region.

The time window of quadrant IV is six months to a year, and it is characterized by the dominance of action over thought.

The focus of this 14th edition of Secrets of Ecexution© is on strategic implementation speed, because this is the real success quadrant of a company. The prerequisite for this, however, is to have thought “beyond horizon” beforehand in order to have a target image that is completely clear, that you believe in and that is “different” from what you are doing today.

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