A reflection on the clarity of key terms and practices
A friend called to say his wife had been passed over for promotion because she “didn’t think strategically enough.” When she asked what that meant, her boss said, “I don’t know.”
I’ve heard this story a dozen times. Let me dissect this management baloney:
What is “thinking strategically?” Some people think it’s about long-term planning, others think it’s about seeing how all the parts connect. Some think it’s both. Sometimes it’s really the huge question, “How should we grow our business?”
The first logical step in “thinking strategically” is setting goals, and that’s confusing, too:
Goals differ by context. Goals are relative and subjective: one person’s “strategy” is another person’s “tactic.” The word “strategy” is used for so many things, so it’s better not to use it at all. Instead, include the context:
- One of the top 3 goals for the business overall is….
- One of the top 3 long-term goals of Unit X is…
- A secondary finance goal of Unit Y is…
- A critical goal this year for Department Z is…
Goals differ in by time horizon. The longer the time horizon, the harder it is to measure goals.
- A Very long-term goal might be: “We want the best customer service ratings in the region.”
- A long-term goal might be: “To maintain a Net Promoter Score of XX% through 2025.”
- An annual goal can very specific: “Increase office staff retention from XX% to YY% by 3QTR22”
Goals need to be balanced. Having just a sales goal without quality and efficiency goals will get a business into trouble fast. See The GMs Index for ideas in all six management disciplines and their standard definitions.
Goals start from the top. While planning should be iterative, it’s better if the units or departments know the top goals for the overall business. That’s the CEO’s job.
The phases of “strategic thinking” after goal-setting are:
- Unit planning (which get rolled up and checked at the overall business level)
- Gap analysis: i.e., of current state vs. needed capability
- Final planning, delegation and control systems
Toss it right back: So, next time someone says you should “think strategically,” you’ll be able to grab that baloney sandwich and run with it…