Strategic Response - Nancy Gray-Starkebaum

Today’s strategic response finds me totally off in left field. I have to apologize to my readers for this exploration, but it is not often that I get to talk about the second law of thermodynamics, military strategy and Burt's ex in the same post. So I decided to just go into the proverbial void and see where it leads.

Nancy Gray-Starkebaum is the head of Electronic Arts recruiting organization in our largest studio (Electronic Arts Canada). I was thrilled to see Nancy respond to the post Strategic Step 1 – The Three Questions. Nancy is in the trenches every day – she gets to see windbags like me talk about “strategy” while she gets stuck with the execution. As I said here, strategy without execution is virtually worthless (though not totally, in that the exercise of defining strategy can have some nice side effects, but I digress). So Nancy gets to see strategy for what it really is: a daily struggle with decisions that involve where to spend your resources to achieve an objective. Hopefully that decision leads to outcomes that benefit the company, but there is often no way to know until the trigger has been pulled. Nancy said:

Typically I've found in business that strategic plans or strategy has a time frame associated with it that is anywhere from 1 - 5 years. Less that 1 year generally not being long enough to show any real ROI.

Good point Nancy. Its not just that it's not enough time to show ROI, its that a strategy is supposed to be a longer-term commitment to set of actions and resource allocations to achieve a larger objective. Depending on the size of the company, it's hard to get traction on anything in less than a year. The bigger the company, the more difficult it is. It's also hard to get accurate feedback in systems where there can be a tremendous lag between the initial assumption and the end result.

In the past, I've worked in HR organizations where blood, sweat and tears (not really, but it sounds good) went into the creation of a 2 year strategic plan only to find that 6 months into the plan, the business underwent a significant shift that moved resources away from strategy work and into reactive panic fire drill mode. What are your thoughts, in today's fast paced corporate environment on timing / length of time for HR strategic plans? Should we be removing time as a parameter when we're discussing strategy?

All activity is time bound. Time can't be abandoned in the planning process. There are three reasons for this:

1 - Entropy

2 - von Moltke

3 - Dionne Warwick

Entropy - All systems are competing against time. Given enough time, all systems fall apart. This is because of the second law of thermodynamics, which is the reason I can't balance my checkbook and eventually will die. The second law covers something called “Entropy” which says that "All kinds of energy spontaneously spread out from where they are localized to where they are more dispersed, if they're not hindered from doing so." In other words, your strategy is an attempt to gather assets and turn them into an outcome that has a beneficial outcome for your organization. But the longer this goes on, the less likely it is to happen because the natural tendency of all systems is to disburse their energy from a central focus. This means that if you don't time bound your strategy it is less likely to be achieved, because you are not consciously recognizing the disorganizing effect of the passage of time. Since your attempt to organize is always in conflict with your organization's tendency to fall apart, you have to limit the time horizon of your plan.

Von Moltke - If you read the history of World War I you could plausibly say that the von Moltke was an even bigger idiot than the Kaiser. But von Moltke said something that gets right to your specific point about "the business underwent a shift." Remember this little gem and your efforts to understand the seeming incompetence of strategic planners will grow by leaps and bounds. von Moltke (not Clausewitz) said, “No battle plan survives contact with the enemy.” In other words, the plan your team just developed is absolutely guaranteed to change. You create the plan and launch it and at the first contact with your "enemy"  your plan blows up. Lack of time, too few resources, lack of management attention, inadequate assets for the task at hand, organization interia and market noise are all common enemies to the business strategic plan.  von Moltke said this means that you have to launch your plan hard and fast because the only hope you have of getting traction with your initial plan is to gain as much ground as possible before the firing starts. I guess your perspective on this depends on whether you are France or Germany, but either way, you have to recognize that all planning initiatives are inherently faulty. Why? Because we are all a little like...   

Dionne Warwick - Surely you have seen the late night TV commercials where Dionne Warwick (she of the "Do You Know the Way to San Jose " fame) shills for the Psychic Friends Network? It all seems so corny and preposterous. But the next time you are in a strategy development session, keep Dionne Warwick in mind, because all strategy development is an attempt to tell the future.  You sit down in a conference room, take out your crystal laptop and rub it until the plan appears. It is unfortunate that so few of us are good at predicting the future (particularly me, since I could really rake it in), but it is true all the same. Most of the time we are merely making educated guesses, and those guesses are made all the worse by the cloud of unrealized human emotion, prejudice and pre-conceived outcomes that form the mental models that mess up most strategic planning exercises. But even if we were absolutely clear-headed and even-minded in our assessment of internal and external forces that could affect the success of a strategic plan, the simple fact is that almost all economic systems are just too complex to analyze thoroughly. At some point you just have to take a flyer.

The real problem with strategic plans is not that they change, or that it feels like the people who put the plan together pulled it from some dark place and threw it your way with a smirk on their face. The real problem is that there is rarely any learning that accompanies the mistakes made. If your planning makes the external and internal assumptions that form the basis of the plan explicit, then you can match your ongoing feedback to those assumptions and see where the plan needs to be improved at its core.

Unfortunately most managers just change their mind and tell people "Wait, we need to change direction!" It is far better for the manager instead to provide a constant feedback mechanism to investors about:

1 - The original assumption

2 - The data collected and its source (validity of data)

3 - How this data affects the plan

4 - The new assumption

5 - The new plan

6 - The new measurement for the plan

Due to physics, old German generals and pop stars in search of extra cash our plans may be in constant flux, but they should continue to be as concrete as possible. Yet just because they are concrete does not mean they won't change.

Thanks for the comments Nancy. And thanks for allowing me to bounce off the rubber walls in my nice white jacket and see where this went.

Comments

[Jeremy Langhans]

i totally agree with Nancy ...it takes at least 1 year before you can measure ROI

regards,
jeremy

[Colin Kingsbury]

Jeff,

This makes me recall a great little article, by Rick Brookhiser in the NY Observer. Bloomberg had a habit of saying things like, "this isn't about politics, it's just good business." Brookhiser had a devastating response which was that it was the businessman's conceit to think that "politics" were a bug in government and not a feature. Politics, particularly party systems, were in Brookhiser's view a way to deal with the ambiguities that invariably presented themselves. Partisan politics in this setting adds value by driving consistency of execution, by making decisions based on a set of core principles that evolve slowly. In the ideal scenario, at least...

In a corporate setting I have applied this by emphasizing strategic values. These simple principles (ease of use, value, innovation) serve as touchstones, and when we're trying to figure out whether taking a certain approach is a good thing, we can ask whether it helps us live up to these ideals. Of course, you have to actually apply these ideals ona day-to-day basis, or you get into Dilbert territory.