At its most simple, executing strategy is about planning what to do in order to achieve certain outcomes. The challenge is often making sure that the actions we have planned are actually carried out until the desired outcomes are achieved. In an exclusive excerpt from his new book The Art of Action, author Stephen Bungay reveals all.
In a stable, predictable environment it is possible to make quite good plans by gathering and analyzing information. We can learn enough about the outside world and our position in it to set some objectives.
We know enough about the effects any actions will have to be able to work out what to do to achieve the objectives. We can then use a mixture of supervision, controls, and incentives to coerce, persuade, or cajole people into doing what we want.
We can measure the results until the outcomes we want are achieved. We can make plans, take actions, and achieve outcomes in a linear sequence with some reliability.
If we are assiduous enough, pay attention to detail, and exercise rigorous control, the sequence will be seamless. In an unpredictable environment, this approach quickly falters.
The longer and more rigorously we persist with it, the more quickly and completely things will break down. The environment we are in creates gaps between plans, actions, and outcomes:
- The gap between plans and outcomes concerns knowledge: It is the difference between what we would like to know and what we actually know. It means that we cannot create perfect plans.
- The gap between plans and actions concerns alignment: It is the difference between what we would like people to do and what they actually do. It means that even if we encourage them to switch off their brains, we cannot know enough about them to program them perfectly.
- The gap between actions and outcomes concerns effects: It is the difference between what we hope our actions will achieve and what they actually achieve. We can never fully predict how the environment will react to what we do. It means that we cannot know in advance exactly what outcomes the actions of our organisation are going to create.
Although it is not common to talk about these three gaps, it is common enough to confront them. It is also common enough to react in ways that make intuitive sense. Faced with a lack of knowledge, it seems logical to seek more detailed information. Faced with a problem of alignment, it feels natural to issue more detailed instructions. And faced with disappointment in the effects being achieved, it is quite understandable to impose more detailed controls.
Unfortunately, these reactions do not solve the problem. In fact, they make it worse. There is a model for creating a link between strategy and operations and bridging the three gaps. It involves applying a few general principles in continually changing specific circumstances.
They are not difficult to understand, but their implications are profound. The model recognises that our knowledge is always limited and seeks to do more with the knowledge we have. It unsentimentally places people and human nature at its core and seeks to direct people rather than control them.
In this way, it casts off our legacy thinking while rescuing both babies from the bathwater.
Each of the principles addresses one of the three gaps, but all of them reinforce and are dependent on each other.
1. Decide what really matters
You cannot create perfect plans, so do not attempt to do so. Do not plan beyond the circumstances you can foresee. Instead, use the knowledge which is accessible to you to work out the outcomes you really want the organisation to achieve. Formulate your strategy as intent rather than a plan.
2. Get the message across
Having worked out what matters most, now pass the message on to others and give them responsibility for carrying out their part in the plan. Keep it simple. Don't tell people what to do and how to do it. Instead, be as clear as you can about your intentions. Say what you want people to achieve and, above all, tell them why. Then ask them to tell you what they are going to do as a result.
3. Give people space and support
Do not try to predict the effects your actions will have, because you can't. Instead, encourage people to adapt their actions to realise the overall intention as they observe what is actually happening. Give boundaries which are broad enough to allow staff to take decisions for themselves and act on them.
It's important to look at how this alternative model evolved, the practices on which it was built, and how they can be applied in business today. These principles are probably no surprise, although it may be surprising how much of a difference they make. You probably know something about them already, but you may not know how to make them work well in practice. Doing so is not as easy as you might think.