What is Strategic Thinking

Ron Carucci in Harvard Business Review


It’s a common complaint among top executives: “I’m spending all my time managing trivial and tactical problems, and I don’t have time to get to the big-picture stuff.” And yet when I ask my executive clients, “If I cleared your calendar for an entire day to free you up to be ‘more strategic,’ what would you actually do?” most have no idea. I often get a shrug and a blank stare in response. Some people assume that thinking strategically is a function of thinking up “big thoughts” or reading scholarly research on business trends. Others assume that watching TED talks or lectures by futurists will help them think more strategically.

How can we implement strategic thinking if we’re not even sure what it looks like?

In our 10-year longitudinal study of over 2,700 newly appointed executives, 67% of them said they struggled with letting go of work from previous roles. More than half (58%) said they were expected to know details about work and projects they believed were beneath their level, and more than half also felt they were involved in decisions that those below them should be making. This suggests that the problem of too little strategic leadership may be as much a function of doing as of thinking.

Rich Horwath, CEO of the Strategic Thinking Institute, found in his research that 44% of managers spent most of their time firefighting in cultures that rewarded reactivity and discouraged thoughtfulness. Nearly all leaders (96%) claimed they lacked time for strategic thinking, again, because they were too busy putting out fires. Both issues appear to be symptoms masking a fundamental issue. In my experience helping executives succeed at the top of companies, the best content for great strategic thinking comes right from one’s own job.

Here are three practical ways I’ve helped executives shift their roles to assume the appropriate strategic focus required by their jobs.

Identify the strategic requirements of your job. One chief operating officer I worked with was appointed to her newly created role with the expressed purpose of integrating two supply chain organizations resulting from an acquisition. Having risen through the supply chain ranks, she spent most of her time reacting to operational missteps and customer complaints. Her adept problem-solving skill had trained the organization to look to her for quick decisions to resolve issues. I asked her, “What’s the most important thing your CEO and board want you to accomplish in this role?” She answered readily, “To take out duplicate costs from redundant work and to get the organization on one technology platform to manage our supply chain.” Her succinct clarity surprised even her, though she quickly realized how little she was engaged in activities that would reach that outcome. We broke the mandate into four focus areas for her organization, realigned her team to include leaders from both organizations, and ensured all meetings and decisions she was involved in directly connected to her mandate.
 

Unfortunately, for many executives, the connection between their role and the strategic contribution they should make is not so obvious. As quoted in Horwath’s study, Harvard Business School professor David Collis says, “It’s a dirty little secret: Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else.” He also cites Roger Martin’s research, which found that 43% of managers cannot state their own strategy. Executives with less clarity must work harder to etch out the line of sight between their role and its impact on the organization’s direction. In some cases, shedding the collection of bad habits that have consumed how they embody their role will be their greatest challenge to embodying strategic thinking.

Uncover patterns to focus resource investments. Once a clear line of sight is drawn to a leader’s strategic contribution, resources must be aligned to focus on that contribution. For many new executives, the large pile of resources they now get to direct has far greater consequence than anything they’ve allocated before. Aligning budgets and bodies around a unified direction is much harder when there’s more of them, especially when reactionary decision making has become the norm. Too often, immediate crises cause executives to whiplash people and money.

This is a common symptom of missing insights. Without a sound fact and insight base on which to prioritize resources, squeaky wheels get all the grease. Great strategic executives know how to use data to generate new insights about how they and their industries make money. Examining patterns of performance over time — financial, operational, customer, and competitive data — will reveal critical foresight about future opportunities and risks.

For some, the word insight may conjure up notions of breakthrough ideas or “aha moments.” But studying basic patterns within available data gives simple insights that pinpoint what truly sets a company apart. In the case of the supply chain executive above, rather than a blanket cost reduction, she uncovered patterns within her data that identified and protected the most competitive work of her organization: getting products to customers on time and accurately. She isolated those activities from work that added little value or was redundant, which is where she focused her cost-cutting efforts. She was able to dramatically reduce costs while improving the customer’s experience.

Such focus helps leaders allocate money and people with confidence. They know they are working on the right things without reacting to impulsive ideas or distracting minutia.


Invite dissent to build others’ commitment. Strategic insight is as much a social capability as it is an intellectual one. No executive’s strategic brilliance will ever be acted upon alone. An executive needs those she leads to translate strategic insights into choices that drive results. For people to commit to carrying out an executive’s strategic thinking, they have to both understand and believe in it.

That’s far more difficult than it sounds. One study found that only 14% of people understood their company’s strategy and only 24% felt the strategy was linked to their individual accountabilities. Most executives mistakenly assume that repeated explanations through dense PowerPoint presentations are what increases understanding and ownership of strategy.

To the contrary, people’s depth of commitment increases when they, not their leader, are talking. One executive I work with habitually takes his strategic insights to his team and intentionally asks for dueling fact bases to both support and refute his thinking. As the debate unfolds, flawed assumptions are surfaced and replaced with shared understanding, ideas are refined, and ownership for success spreads.

Sound strategic thinking doesn’t have to remain an abstract mystery only a few are able to realize. Despite the common complaint, it’s not the result of making time for it. Executives must extract themselves from day-to-day problems and do the work that aligns their job with the company’s strategy. They need to be armed with insights that predict where best to focus resources. And they need to build a coalition of support by inviting those who must execute to disagree with and improve their strategic thinking. Taking these three practical steps will raise the altitude of executives to the appropriate strategic work of the future, freeing those they lead to direct the operational activities of today.

What is productivity and why is the UK's so poor?

Larry Elliot in The Guardian

The shortfall in productivity compared with other developed economies has long been Britain’s economic achilles heel. It is a problem that Conservative and Labour chancellors have been grappling with for decades.

Productivity is a guide to how good a country is at delivering the goods and services that are bought and sold. Technically, it is the rate of output per unit of input, measured per worker or by the number of hours worked. In layman’s terms, it is a measure of what goes in and what comes out.

In some sectors, productivity is easy to measure. A factory that makes 1,000 cars a day with 50 workers is twice as productive as a factory that requires 100 workers to do the same job. In other parts of the economy, assessing whether productivity has improved is harder and less objective.

At face value a fast-food joint that employed the same number of chefs to cook the same number of hamburgers as they did a year earlier would not be showing any increase in productivity. But if the quality of the hamburgers improved, that would be a productivity gain and statisticians would try to capture the improvement in the official figures.

There are a number of ways in which a firm can make itself more productive. It can invest in new machinery that makes the production process more efficient. It can employ more highly skilled staff. It can train workers so that they can fully exploit the equipment they are using.

It is through productivity improvements that living standards rise. For many years, the annual increase in productivity in the UK averaged around 2%, although there were periods when it was lower and periods when it was higher.

Each year since the early 1990s, the Office for National Statistics has published an international comparison of productivity. This showed that UK productivity was 9% lower than the average of the other six members of the G7 (the US, Japan, Germany, France, Italy and Canada) but this gap narrowed to 4% by the time of the 2007 financial crisis.

Since then, however, productivity in the UK has barely grown and the gap with the rest of the G7 has widened to 18%. The gap with Germany is 35% and with the US 30%.

There have been a number of explanations for the dramatic deterioration in productivity: the availability of unskilled cheap labour has deterred firms from investment; the poor quality of UK roads, railways and broadband network; the shrinkage of the financial sector, which had been a source of high-productivity jobs in the boom before the 2007 crisis; and the misallocation of capital to “zombie” firms kept alive by ultra-low interest rates rather than to dynamic new enterprises.

The government’s autumn statement document states that improving productivity is the “central long-term economic challenge” for the UK. Philip Hammond, the chancellor, has identified better infrastructure, technology and skills as the foundations for doing so, which is why he unveiled a new £23bn national productivity investment fund and backed Sir Charlie Mayfield’s productivity council in his autumn statement. But this is a goal that requires long-term investment and commitment.

Jeremy's Anthem for 2017

by Girish Menon

I’m not afraid of  Brexit

I’m not worried about Trump

I’m not scared of boundary changes

Don’t care about opinion polls

I don’t bother with Tony

Nor his many cronies

Half a million volunteers

Are my army

Largest party in the EU

I won’t let you down

I believe in socialism

Universal basic income

World class NHS

Pure air, water and food

A safe place to live

For all who live here

Half a million volunteers

Will each bring thirty new voters

Largest party in the UK

I won’t let you down

I said don’t go to Iraq

I did not fudge my bills

I do not hate the wealthy
The media hate me

But the youth relate to me

And I am full of energy

Half a million members

Will spread the good word

A fair government in the UK

I won’t let you down.

-----

Universal Basic Income explained

Brexit Facts for your Christmas Dinner

Dan Roberts in The Guardian


Avoiding politics at the dinner table may prove harder than ever this Christmas for families on opposite sides of Britain’s intergenerational Brexit divide.

Voters over 65 were more than 50% more likely to vote to leave the European Union than those under 34, and polls suggest opinions have hardened since. Divorce lawyers have already warned that differing views on the subject are also an added source of stress in many marriages.

At Thanksgiving, when American families gathered for the first time after the equally divisive election of Donald Trump, the New York Times was so worried it published a list of “election facts to keep handy for holiday discussions”. In the interest of similarly avoiding a post-truth Christmas in the UK, here is a festive bluffer’s guide to latest twists and turns of the Brexit debate to keep by the crackers:

 Whose Idea was it again?

Six months on from the referendum we know a lot more about the demographics of the electorate. A recent study by NatCen Social Research found the people most likely to vote leave were those without formal educational qualifications (78%), those with a monthly income of less than £1,200 (66%) and those in social housing (68%). Voters against EU membership were also more likely to be white, male, and readers of the Sun or the Daily Express. Anyone brave enough to point this out over Christmas pudding should bear in mind that just 9% of leave voters said they were regular readers of the Guardian. Remainers were also heavily concentrated in London, Scotland and Northern Ireland, but in a minority elsewhere.

Will it ever actually happen?

In private, one European finance minister puts the chances of the Brexit “experiment” being abandoned as high as 25%. Scotland’s first minister, Nicola Sturgeon, has proposed the radical solution of Scotland staying in the single market even if the rest of the UK leaves. In London, it is hard to find anyone in any doubt that the UK government will at least have to give full Brexit a very good try before the next general election. There is always a risk that unforeseen events – another financial crisis or a wider EU unravelling, for example – can intervene, but the likelihood is they won’t. This is happening.

What about that legal challenge?

A supreme court judgment on the government’s right to start divorce proceedings by invoking article 50 without consulting parliament is due in the middle of January. The government is expected to lose, but the impact of the case has been undermined by growing signs that it could easily assemble enough MPs to pass the necessary legislation. An amendment to a Labour motion calling for more transparency in the process saw just 23 Labour MPs vote against their party whip in protest at the very idea of invoking article 50.

Weren’t we meant to be eating baked beans in candlelight by now?

The Guardian’s latest Brexit barometer confirms that many of the more dire economic projections of the impact of a leave vote have yet to come to pass. That does not mean they won’t, though. There are already worrying signs of anxietyabout Britain’s future trading arrangements that can be seen in the slumping value of sterling. EU negotiators are also threatening to extract a £50bn divorce settlement as the price of agreeing a post-membership deal which our ambassador has warned could take a decade. In the meantime, banks and carmakers are warning of an exodus if a transitional arrangement is not agreed to soften the “cliff edge”. Don’t throw out the candles just yet.

So, what’s the plan?

Ah. This is where lunch could get awkward. The truth is we don’t have one yet. Theresa May has said she will give a speech in January setting out the broad aims of Britain’s negotiating position. The Brexit minister, David Davis, has said he will publish a slightly fuller, but not very full, outline for parliament to debate in March. The prime minister also admitted to the Commons liaison committee on Tuesday that leaving the EU without any sort of agreement on the terms of divorce let alone future relations was one of several contingency plans that Whitehall was preparing for. There is now talk of soft Brexit, hard Brexit or “train-crash” Brexit, with the smart money increasingly on something between the last two.