How to Make the Most of Your Company's Strategy The art of translating top management's aspirations into concrete action on the ground = by STEPHEN BUNGAY iN THE DECADES since Peter Drucker first urged executives to manage by objectives, companies have replaced his famous \"letter to the boss with ever maore elaborate and time-consuming processes for setting goals. The result is usually a profusion of measures and tar- gets, finally approved six months into the vear they are supposed to cover, that only add to the confusion about what really matters to the business. For most managers, the big unanswered question remains: What do you want me to do? This article is about how to answer that question. In the following pages vou will read about a process I call strategy briefing, a technigue derived from the military. Through it, managers and their reports can move together from the uncertainty surrounding seemingly complex goals and perfor- mance measures to clarity about just which objectives each person needs to focus on, in what order of priority. The briefing alo helps managers set parameters for two variables that are the bedrock of high performance: the extent to which people in an organization act in line with its leaders\" intentions, and how much freedom they have to take independent action. In essence, the briefing turns lofty strategic goals into a clear blueprint for execution. In what follows I'll walk vou through the five-step briefing process, illustrat- ing it with a fictional example stitched together from my own experiences as a consultant and a teacher. To conclude I'll explain how to roll the process up, down, and across your organization. The Road to Confusion Is Paved With Good Intentions Joewas a star. An engineer, he also had an MBA and worked at a large, well- established information services com- pany. A yvear after moving into product development, he was asked to setupa low-cost R&D center in Asia. By intro- ducing new, less expensive offerings, the company hoped to fend off increas- ing competition from cheaper rivals. Six months into the project, Joe convened an off-zite. After presenting the company's goals and challenges, he asked the people attending for thoughts on how they could help meet them. After a few moments' silence, one of the senior technicians raized his hand. \"1 don't want to sound negative,\" he said. \"but what exactly are we really tryving to achieve?\" Joe was taken aback. \"It's perfectly clear. isn't it? We're creating a new cen- ter to develop low-cost products. We've got two vears. You know the situation, and vou know the company's strategy. 1 just went through it.\" \"Sure.\" came the reply, *but frankly, I'm still confused. There's lots of stuff in our goals about shareholder value, re- inventing ourselves, thinking globally, and embracing change. Theres stuff about being innovative and delivering superior customer satisfaction, and there are targets for increasing revenue, lowering costs, and raising margins. Well. I don't get it. From where I sit the sky's falling in. We're in a deep reces- sion, the competition is eating our lunch, revenues are falling, margins are shot to bits, customers are starting to hate ug, and all anyvone seems to care about is getting rid of people to save money. Some of us are probably next. Where are we in all this? What are we supposed to do?\" Joe zensed that he needed to take control. \"OK.\" he said, \"I hear you. And wou're right. Let's sit down and work it out now so we're all singing from the same sheet. Let's not just talk; let's write it down, so we all know exactly what we are about.\" | STEP 1 State Your Intent Joe went over to a flip chart and wrote down *Task + Purpose.\" Under \"Task he wrote \"what,\" and under *Purpose\" he wrote \"why.\" As he urned back to his audience, he saw to his surprise that people had perked up. \"5o we''ll answer those questions, right?\" he =said. *\"Here and now.\" The discussion began as usual with an aspiration. It was not long before the words \"world class were uttered, as someone suggested that the team's pur- posewas to \"build a world-class develop- ment facility.\" Some of the team mem- bers liked that. Others rolled their eves. \"Look.\" somebody piped up, \"that's an aspiration anyone could have. It makes no difference; it's vague and has nothing to do with our situation.\" The first version was crossed out. The purpose became \"To build a new development facility.\" \"But that's just a description of what we're doing,\" came the objection. *Isn't the question, What are we tryving to achieve?\" \"We need to reduce costs,\" came the answer. So perhaps that was the \"why.\" Joe called a halt to the increasingly fractious discussion. \"Let's step back a zecond,\" he suggested. \"What is the sit- uation?\" He tried to sum it up, for both himself and the others: \"The company's revenues are de- clining by 10% a year, in part because we're in the worst market in history but also because we're losing share. Our cost base is 30% too high, our products are old, and customer satisfaction is falling. We claim to be innovative, but new-product development is blockad. Our job, surely, is to unblock it. If we do that, it will reduce operating costs and improve customer satisfaction, and that will help sales.\" Joe felt somewhat liberated by what he had just said. Like everyone else, he had a mental list of what needed to be done. The company always had to improve costs, revenues, margins, and service. But he had just articulated the relationship between them for the first time. New-product development was the link that completed the chain. He realized that for him success meant getting products out now. The discussion continued. Half an hour later, the group had its first answer on the flip chart: What: To significantly reduce time to market for development, enhance- ments, and support of high-quality products to our customers in a cost- effective manner. Why: In order to help ageressively grow our revenues and increase our margins. mm If we give ourselves a target we can't achieve,\" Joe said, \"we're setting ourselves up for failure.\" Druring lunch Joe went outside to think. He did not like what the team had written, It was too broad and too unre- alistic. How was the firm going to ag- gressively grow in the current market? He ruefully realized that he should have thought about this long ago. He needed to set the scene for his people, The Takeaway. Joe began by trying to define what his group's intent was, es- sentlally drafting a statement outlining what the people above him expected his group to do and why. If you were a soldler, you'd recognize this Intent as your mission. Getting to the right state- ment Is not easy; it took Joe and his team several tries. But a clearly defined Intent unifies a team's effort, Before the off-site, Joe's people had been gener- ating a lot of activity. Once they had agreed upon the statement, they could see which activities supported the Intent and stop the rest. That produced a degree of calm in his overworked department. Try Again=This Time in Context Joe went back to the flipchart and turned down a new sheet. At the top of it he wrote, \"Context.\" Then he listed four observations: 1. The company's market share is being eroded by competitors under some of the most difficult trading conditions in our history. 2. The loss of share must be halted, or we will have no basis for future growth. 3. Customer service is the key to halting this decline, but with the existing praduct line, it's impossible to deliver onestanding sevvice at acceprable margins. A, With the current loss of accounts, every day that passes makes recovery more difficult. The group came back in as he fin- ished, \"Does that help?\" he asked. There were nods as people read what he had written. \"Actually, we've got a crucial role in all of this, haven't we?\" observed one of the head programmers, \"And,\" somebody added, \"if it's true, it means that what matters Is time. We've got to speed things up.\" \"Is that right?\" someone else asked, \"1s that what the company wants us to do?\" \"Let's look agaln at what the com- pany strategy document says,\" Joe replied. He fiddled around on his laptop until the words of the corporation filled the screen: We are committed to dellvering Great Service to our customers, This will re- quilre us to bulld a strong service-based culture. This will be achleved by a combi- natlon of improved customer and market segmentation capability, improved cus- tomer service processes and tools, and, significantly, specific customer-focused behaviors' being constantly demon- strated both internally and with external customers. The goal is to reshape the business to deliver superior shareholder value over a sustained period. The group stared blankly at the screen. \"Marketing wrote that,\" some- one commented. \"More like HR.\" said another person. \"Though finance finally got their oar in at the end.\" *Think about what's behind it,\" Joe said. \"It says there is going to be a change. Idea in Brief THE PROBLEM Managers struggle to translate corporote strategy Into what they should actually be doing, partic- ularly In complax situations with multiple goals and moasuras, THE SOLUTION Strategy briefing 15 a five-step approach to planning that orlginated with the military, It providas o way for managers and thalr reports to gain clarity around |ust which oblectives aach parson needs to focus on and whan. THE STEPS Tha staps ara (1) state your Intant, or what you are axpectod to do and why, (7] ravise it In the context of your company's situation, (3) determing which measures bast Indicate whather you're achleving your goal, (4) dafine the tasks implied by your Intent, and (B) define the bound- arles, or constralnts, that limit your team. Whan this appraach is cascaded through, a strategy 15 broken down Into a cascade of discrate but linked alements that align the organization. mm Joe realized that he had defined his own role. His job as leader was to manage the team's boundaries. The clock's ticking. We have to give cus- tomers better service than our compet- itors do if we are to get them back, and we've gol to make money as well.\" \"50 how do we fit in?\" someone asked. \"If the company is to compete on service, it needs us to come up with the products to enable it to do so,\" Joe replied. \"It used to be all about tech- nology and features, but it's a service game now, | was talking to the head of technology about ir. Hewanisa eoherent sulte of products, not the mess we've got now, with different offerings for every reglon and every client. I've talked to the head of Asla as well. The costs are killing us. We have to make some hard cholces. Sales won't lke i, but there it Is. It is our call. Why don't we try towrite it down, simply, and work out what it Is that senlor manage- ment wants us to do? What was thelr intention when they wrote all this?" Forty minutes and several flip-chart sheets later, Joe's group had a formu- lation, which it decided to call \"Higher Intent.\" The formulation read: TWO LEVELS UP (CORPORATE) What: To transform the company within the next three years. Why: [n order to deliver superior ser- vice and financial performance. ONE LEVEL UP (TECHNOLOGY GROUP) What: To develop and support a coherent product line that is easy to service. Why: In order to allow sales and mar- kating to grow revenues. *Our job,\" said Joe, %is to fulfill the technology group's intent in Asia. Their intent tells us a few things that should drive every decision. The new products have to be simpler to service, or they're no good. They have to fit in with what's being done globally, and the local sales- people will have to live with thatno more customization, We've got to de- sign products with sales and marketing to make sure they'll sell. They have to be low cost or we can't make money, And we've got to move fast. Now let's look at our earlier intent statement again, What do we have to do now?\" The Immediate needs were defensive, There was no way anyone could grow revenues and margins In the current eli- mate, The firm had to stop the eroslon of market share. It was also clear that the company had 1o get something new out the door that year, Moreover, Joe's group needed to locus ts efforts; more than 250 products, in all stages, were In the pipeline, and the group would have to declde which ones would make the most difference, Finally, the team came up with this statement of intent: What: To accelerate delivery of eritical products to market, Why: In arder to enable sales chan- nels to halt market share erosion by vear-end. *Is this ambitious enough?\" someone asked. "It doesn't sound particularly inspiring.\" \"This is enough.\" said Joe. \"If we give ourselves a target we can't achieve, we're setting ourselves up for failure. But that reminds me, we need some measures so that we know what we're doing is work- ing. We haven't finished yet.\" The Takeaway. Before a group can arrive at the right statement of intent. its leader needs to set a context. Context setting requires understanding the goals and constraints of both the people above you and the people above them. Going two levels up helps vou to see how vour own actions fit into the bigger picture and to determine your priorities. Keep in mind that revisions are critical to the briefing process. Progress |s made only through an iterative process of for- mulation, critique, and readjustment, BEH Set Your Measures Joe and his team determined that to achieve the objectives they had just outlined, they needed to focus on three thingstime, market share, and costs. They expressed each In terms of a goal: 1, Deliver agreed product set by year- end and on budget, 2, Se that total market share in Asia at the end af the year eguals the share al the beginning of the year., 3, Reduce operating costs for develop- ment in the reglon by 20%. There was a pause. They were all studying the flip chart. Someone frowned. \"We ourselves cannot stop market share from declining.\" he said. \"Do we want to be measured on that?\" \"Strictly speaking, no,\" replied Joe, \"but it is the purpose behind every- thing we are doing. If the rate at which we're losing share goes down, we'll know what we're doing is working, even if we don't hit the target. [f we don't look at it, we might be barking up the wrong tree.\" \"What about what we @re measured on? someone piped up. *We've all ot targets. Dozens of them.\" So they had, including Joe himself. Part of his bonus was tied to the number of new products delivered. Optimizing that would not be difficulthe could just go for the easy development projects nearest comple- tion. But they might not have the most impact. \"Look,\" he said, \"I'll make a commit- ment to you. | will renegotiate the tar- gets for this group. I'll explain what we are doing and that the measures are just there to tell us whether we're successful or not, The putcome Is what we're try- Ing to optimize. The measures are the dashboard, We should not confuse the readings on It with what we really want todo, which Is to arrive on time at our destination, When we've worked out who Is dolng what, 1'll measure your performance on how well you accom- plish your assigned tasks. What [ want to know from you now 1s what you think those tasks should be.\" The Takeaway. You need measures 1o monitor whether or not you're achieving your intent. Sometimes, if your briefing is going well, vou'll find that the activi- ties you see as most appropriate to your intent aren't the ones you are actually assessed on. If that's the case, it becomes the responsibility of the team leader to go back to the people above him or her and negotiate new performance mea- sures, asJoe decides to do here. STEP4 | Define the Tasks Implied By Your Intent The people in Joe's group started by looking at what they were actually do- ing. They were involved in three types of activity: growing an offshore facility, improving costs and efficiency, and working on various initiatives related to morale and customer service, They decided to do only what was essential and to sideline initiatives not related to thelr intent. Then they realized they'd left some- thing out. Someone needed to figure out which products were eritical to the company's goalsan Issue no one was addressing. That was the first task. The team members knew that some work on costs would have to continue but that it was even more Impartant to speed up development and deliver something good to the sales force. To ensure that people didn't get distracted from that task, they decided to dedicate half the staff solely to development and have the rest work only on enhancements and support. Insum, four main tasks were implied by the Intent: 1, Identify the critical products. 2, Accelerate development of those products. 3. Create enhancements to existing products faster and provide more- responsive product support, 4, Reduce costs. If Joe and his group accomplished all those goals, they would achieve their intentand be heroes. But suppose they had to make trade-offs? Joe looked at the list. \"In all of this,\" he asked, \"what's really vital? If we had to cut, where would we cut last?\" The team members had a debate, Though they needed to define the criti- cal products, they could get that broadly right. They had to reduce costs, but if they failed, they could accept low mar- gins for a time. The thing that mattered most was the fast development of new productsif they didn't get that right this year, all else would be in vain. Joe went back to the chart and drew a red circle around *Accelerate development.\" Next to it, he wrote, *Main effort.\" It was time for a break. Joe went for a stroll outside and reflected. The group had started with a list of things o do that were only loosely related and varied in Importance, Putting that to one side, the participants had thought through what needed to be done most so that the tasks were prioritized. They had filled in a key missing plece in thelr to-do listidenti- fying the eritleal products. And they also had a list of tasks that didn't overlap, so people could tackle them without getting in one another's way, Now Joe wanted to assign the tasks to his people and have them come up with a plan for accomplishing them. He didn't want to dictate how to do things: his reports all knew their jobs better than he did and needed to put some creative thought Into their plans. He wanted to give them space. But how could he set the right parameters for them? Joe went back in, and as the team reassembled, he wrote a new heading on each of two {lip charts: \"Freedoms\" and \"Constraints.\" The brainstorming began. A quarter of an hour later, the list under \"Freedoms\" included \"senior management support,\" \"motivated em- ployees,\" and \"the importance of new products.\" A longer list under \"Con- straints\" included \"concerns about our ability to deliver,\" \"customer reluctance to adopt new products,\" \"competitor ac- tivity,\" and \"organizational complexity.\" The Takeaway. Your next job is to prioritize the tasks that you've decided mm It sounds paradoxical, but in my experience, if they're not given boundaries, people create more rigid ones for themselves. will help vou meet vour intent. Joe identified his highest priority, or \"main effort,\" as accelerating development, because it would have the largest impact on the company's overall intent of halting the decline in market share. That meant that if he lost people mid- year because of head-count reductions, he would transfer engineers working on product enhancement and support into development so that market introduc- tions would not be delayed. B8 Define the Boundaries Joe stepped back. Evervone looked a bit blank. The lists weren't very helpful. They looked like a list of good things and a list of bad things. The bad ones were more complaints than constraints, plus a few worries. The lists didn't show what people were or were not free to do. \"Let's trv again,\" he said. \"Let's really try to think about what we can or can't do. Let's begin with the constraints.\" It soon became clear that there were two big ones: They were trying to opti- mize time, but cost and quality imposed boundaries. Within a few minutes there was an earnest debate among the partic- ipants, which started to get passionate and technical at the same time. Joe stopped it. \"We've just identified another aspect of the tasks.\" he said. *\"We're going to have to work this out as we go. Let's not assume we know the answer already.\" He wrote down the two constraints: 1. Product quality. T be defined with reference to customer needs and the service organization. 2, Product cost. Requirements sct by budget and competitive benchmarks. Though Joe's group had no control over those constraints, it had to find out what they were. He and his team real- ized that by defining their boundaries, they were also identifying whom they had to talk to both inside and outside the organization. The discussion be- came more concrete and more focused. They identified two more constraints and a question: 3. The requirement to reduce the num- ber of development centersito be agreed on with the head of Asia. 4, Product obsolescence program to be agreed on with global product Management. 5. Who has final decision on new- product development profects? As he looked at these, Joe realized that he had defined his own role. His job as leader was to manage the team's boundaries. Tackling the first four con- straints would involve working with the decizsion-makers and ensuring that the team's proposals were good enough to be accepted. The fifth item on the list was something he had to clarify. He made a note to himself to raise the is- sues with both his regional boss and his functional boss when he saw them next. The shadows were lengthening and people were tired; time to call ita day. *\"Well,\" zaid Joe. after he'd assigned the four taszks to different managers, \"T want each of you leading a task to come back to me by the end of next week to tell me how you are going to tackle it. Now, let's have a drink before we head to the airport.\" The Takeaway. To execute a strategy, employees need to be able to adapt as the situation changes. Boundaries give them the freedom to do that. That sounds paradoxical, but in my experi- ence, if they're not given boundaries, people create more rigid ones for them- selves. In the process, they tend to list things that are getting in their way or might go wrong. Those are not bound- aries but difficulties we want them to overcome. A boundary puts limits on possible alternative objectives. In Joe's case, time, cost, and quality were all po- tential objectives. But he could optimize only one, time. Thus, the others became constraints, or boundaries. He could do whatever he wanted to optimize time subject to achieving minimum stan- dards for cost and quality. The Rollout A single strategy briefing like the one I've just described can help an individ- ual team perform better, but the real magic happens when briefings are held throughout an organization. When, at the end of the story, Joe assigns the tasks and asks his reports to develop their own plans, it means that they must now conduct their own briefings with their subordinates. In each of his subordinates' state- ments of intent the *why\" will be Joe's \"whatto accelerate delivery to market of critical productsand the \"what\" will be the task Joe assipned that person. So for the first of his direct reports, the intent will be \"to identify the critical set of products in order to accelerate their delivery to market\"; for the second. \"to speed up development in order to accelerate the delivery of critical products to market\"; and so on. Each of those four people's direct reports will then work out their implied tasks and pass those along to their subordinates with their *whats.\" The process will continue until no further analysis is necessary. In this way a com- pany's strategy is broken down intoa cascade of discrete but linked elements that give a clear view downward toward actions and upward toward the compa- ny's strategy, and align functions across the organization. The rollout must also incorporate a feedback process in which the leader of a group that has just conducted a brief- ing presents the output to the people he or she reports to. In Joe's case, this \"back-briefing\" should involve a discus- sion of the metrics that he and his group came up with, which differed from the official targets. In back-briefings three things happen. First, the unit doing the back- briefing checks its understanding of the direction it has received or worked out. Second, superiors gain clarity about the implications of the direction they origi- nally gave and may revise it as a result as Joe's bosses would probably do for the metrics. Third, it provides an oppor- mnity to ensure alignment across the organization as well as up and down; if Joe's reports give their back-briefings to him together, he can check for gaps. overlaps, and coherence. EFFECTIVE BRIEFING HELPS unlock hidden sources of productivity. It offers a practical way to ensure that the people in vour company are both strategically alisned and operationally autonomous, a combination that has been the hallmark of high-performance organizations for 2,000 vearssince the days of the Roman army. Mow part of military practice throughout NATO, the strategy briefing technigue has a 150-vear track record, going back to the 19th-century Prussian army, of enabling forces to cope with the fast-changing uncertainties of warfare. Given that the business environment has become equally unpredictable, it's time for companies to adopt it as well. It may be the best investment in time you will ever make. & HER Reprint R1101L Stephen Bungay works as an independant consultant and Is the author of The Art of Action: How Leaders Close the Gaps Be- tweon Plans, Actions and Results (Nicholas Brealey Pubiishing, 2011}, on which this article is based