This month, Jean Pousson, one of the IoD’s senior tutors, takes a light hearted look at some strategic concepts as captured by Hollywood.
On our programmes we make the point enough times that strategy is not the sole preserve of multinational profit making conglomerates. Strategy actually has its roots in the military and the concepts apply equally well to charities, government and even religion.
Tinseltown has gotten in on the act. You probably will recognise some of these, but the key messages must not be lost.
“Those who chose to live by the sword get shot by those who don’t!” Indiana Jones. You will no doubt remember the scene where Harrison Ford shoots an assailant who is branding a whip at him. The serious point here is that new competitors are different. They don’t play by the same rules and they often have no legacy issues. They show no respect for precedent or history. They often come from outside your industry. So Boards must always be alert to new threats and not simply get engrossed by existing competitors. New competitors also achieve prominence very quickly. Facebook and Google are teenagers, even Microsoft which seems to have been here for ever has just reached middle age status (it is 42 years old)
“I mean there’s this guy, a Chinese general, wrote this thing about 2400 years ago and most of it still applies today! Tony Soprano, after reading Sun Tzu’s The Art of War. Despite time, progress, industrialisation, the digital age etc. Some basic strategic concepts still remain and Boards are advised never to lose sight of this. We refer to strategy as music. There are only seven basic notes in music, and with these an infinite variety of music has been created throughout the centuries. The same applies to strategy. Here are our basic seven concepts:
Vision/Mission, i.e. the sense of direction
Understand your environment and how it may be changing
Stakeholders matter not just shareholders
Competitors have a nasty habit of ruining months of planning
Capabilities. What are you good at?
Strategic choices leading to (hopefully) some form of competitive advantage
Implementations, i.e. making it happen, as Peter Drucker used to say “At some point strategy must degenerate into work!”
“Show me the money!” screams Cuba Gooding Jnr in the famous scene in Gerry Maguire, a movie about a sports agent. Strategies must deliver shareholder value, otherwise what is the point. Finance without strategy is just numbers, but strategy without numbers is just dreaming. Boards need to understand the linkages between their strategic choices and the creation of value for their owners.
“What we have here is a failure to communicate!” shouts escaped convict Paul Newman in Cool Hand Luke before being shot dead. This is such a common refrain in organisations, i.e., where the general personnel actually do not understand the strategy and its constituent parts. They have a grand statement of vision (sometimes),some key performance indicators(sometimes),but in truth do not really understand what the organisation is trying to achieve.
“So what exactly do you do?” asks a confused Julia Roberts, playing the part of a prostitute in Pretty Woman, after financier Richard Gere has just given her a highly technical description of his firm’s activities. If you cannot articulate your strategy in one or few very simple sentences, chances are, there are problems with the strategy itself. Try it for your own organisation. Ask your people that very simple question” What is our strategy?”
“Never hate your enemy Michael, it clouds your judgement. This is business!” Sound advice given by Al Pacino in Godfather 3 to his heir apparent played by Andy Garcia. Never let a competitive situation get emotional or personal, because it will indeed cloud your judgement.
“Besides, every time I learn something new it pushes some old stuff out of my brain. Remember that time when I took that home wine-making course and I forgot how to drive?” Homer Simpson, who else. But there is a serious point here (really)As executives ,not only we have to learn to learn, but we also have to unlearn. What we mean is, there is indeed old stuff in out mental business toolkit that is no longer applicable to the current environment. Generation Y and, more importantly customers, are not interested in our personal history and how we may have tackled an issue years ago. Experience is great as long as the future resembles the past!