2. Bryan E Logan - NEW MANAGEMENT THINKING - Strategic Navigation

Strategic Navigation*

In nearly forty years as a consultant, businessman and member of staff of a Business School I rarely ever encountered a senior executive who could clearly enunciate a vision for their organisation. This paucity of organisational vision was amply demonstrated on a course I ran for directors and senior executives preparing for the IOD diploma in company direction. The executives were asked to write down the current vision for their organisation. After some coaching and a lot of rewriting all got there. Only one executive, however, was able to produce at the first attempt a clear vision of where their organisation should be in four or five years.

Yet one of the classic roles of all business leaders is to set the vision for their organisation, plan how it is to be achieved and carry the rest of their people with them in its execution. The normally accepted way for organisations to go about this is through some form of strategic or corporate planning. My overwhelming experience, however, was that with the distinct shortage of organisational visions, there is a consequent and parallel lack of strategic planning.

With this shortage of vision and lack of strategic planning, the approach that I most often encountered involved executives reacting to events and spotting opportunistic openings, as and when they occurred. There have been many examples of executives and business owners who have shown a marked talent in this area, becoming surprisingly adept at spotting exploitable opportunities. As a result many organisations have achieved relative degrees of success over the years.

However, this is no longer sufficient, or indeed acceptable. If organisations are to compete and survive in the world today they must become masters of their own destiny, and this requires knowing where they are going and planning on how they are going to get there. Also, if they are to maximise the odds in their favour, they must be aware of and have anticipated potential pitfalls, and have contingencies for how they will react to unforeseen events. Every organisation must be able to plot its course to a successful future, and not have to depend on the ability of their chief executive to fly by the seat of their pants.

Assuming one could persuade every organisation to come up with a clearly defined vision of where they should be in four or five years time, what is the track record of strategic planning itself as a reliable means of realising this vision? A former CEO of General Motors, after three unsuccessful tries at establishing a strategic planning system, was quoted as saying:-

“We got these great plans together, put them on the shelf, and marched off to do what we would be doing anyway. It took us a while to realise that this wasn’t getting us anywhere.”

What then are the shortcomings and limitations of conventional strategic planning? Why are organisations experiencing difficulties and feelings of frustration when attempting to develop a strategic plan? Chief amongst these must be that:-

1. Strategic plans become obsolete the minute they are completed. This is true of all business planning, although considerable benefit can be derived from the actual process of working through and preparing such plans,

2. It is extremely difficult to use conventionally prepared strategic plans as practical day-to-day working documents, because of their prescriptive and cumbersome format. Hence they are normally to be found on shelves or holding open doors,

3. Many organisations, particularly smaller ones such as SMEs, don’t have the time or resources to expend on demanding exercises that they don’t perceive as having near term consequences,

4. The process can get bogged down in an over emphasis on the planning aspects, to the detriment of the strategy, resulting in and suffering from a lack of strategic thinking,

5. Many executives are far from convinced that the results, by and large, justify the effort, blood, sweat and tears that go into preparing a comprehensive and full-blown strategic plan.

To quote H William (Bill) Dettmer, author of the book ‘Strategic Navigation’*:-

“The reality, however, is that strategic planning hasn’t lived up to the expectations of most companies that have embraced it. It’s been primarily a ‘feel good’ effort.”

If strategic planning, as we know it, is not delivering the goods in terms of meeting our expectations, then there is no point in continuing with more of the same. A new and different approach must be found. Such an approach does exist, and it provides yet another ‘silver bullet’ for improving organisational performance.

All organisations need to have a clear vision of what they want to look like in four, five or ten years time, and the owners, in whatever guise, must have a clear goal for their organisation. If the goal is making money now and in the future, then there are certain necessary conditions attached to that. On the other hand if the organisation is a hospital or educational establishment, then money is unlikely to be the primary goal but it will certainly be one of the necessary conditions.

Again to quote Bill Dettmer:-

“Strategy is the means and methods required to satisfy the conditions necessary for achieving a system’s ultimate goal.”

Given that strategic planning is regarded as vital and necessary to the future well being of any organisation, what then are the essential attributes that organisations need from their strategy? To be useful and practical a strategy must:-

1. Treat the system as a complete entity, clearly defining the vision and goal for the system or organisation as a whole,

2. Take account of the interactions and dependencies between the departments making up the whole organisation. Currently strategic plans tend to have the effect of sub-optimising the performance of the parts,

3. Be flexible; this requires the strategy to be easily and quickly adapted to meet rapidly changing circumstances. It should also highlight the actions needed, together with their intended as well as unintended consequences,

4. Be in a form where the overall picture can be viewed at a glance, and that allows the impact and validity of proposed actions to be checked. It is crucial that the effect of all decisions on the rest of the system can be shared readily between every member of the management team.

It also goes without saying that a good strategy should follow a clear and logical path in order to achieve the desired outcomes.

Bill Dettmer has developed a systems approach called ‘Strategic Navigation’*, which meets these requirements. It provides a solution for achieving a quantum leap in the whole field of strategic planning, and is the ‘silver bullet’ that would enable organisations to make dramatic and significant advances. Allied to the first ‘silver bullet’ on ‘measurements’ (described in a previous paper) significant advances could be made in the performance of the local economy. The ‘silver bullet’ proposed in this paper is based on Bill Dettmer’s concept of ‘Strategic Navigation’*, set out in his book of the same name, published in 2003 by the American Society for Quality and revised in 2007.

Mr Dettmer feels that the words ‘strategic’ and ‘planning’ do not sit easily together and indeed are part of the problem. Rather he proposes that an organisation should define the strategic outcomes it desires, establish the current situation, the starting point, and navigate from one to the other, hence the name of the concept. The concept contains all the steps and structured thinking necessary to undertake this exercise, and relies to a large degree on understanding cause and effect in organisational systems. Cause and effect underpins the ‘Theory of Constraints’ and, for this reason, Bill Dettmer calls his process for ‘strategic navigation’* the ‘constraint management model’.

The ‘constraint management model’ has a sequence of seven steps that make up a complete and self-regulating process. The steps are:-

1. Define the paradigm: The constraint management model begins with a determination of the system’s boundaries and its goal. It then identifies the necessary conditions and critical success factors, without which the goal cannot be achieved,

2. Analyse the mismatches: This is to determine the scope and nature of the gap that exists between the system’s current position, and that which will be required to achieve the goal and critical success factors,

3. Create a transformation: This is where you develop the strategies to close the gap. This third step tells the organisation ‘what to change to’,

4. Design the future: The fourth step verifies that the proposed new strategies will really deliver the desired outcomes. This is the stage where you trim the ‘negative branches’ to ensure that the new ideas are not creating more and different problems,

5. Plan the execution: This step formulates the activities needed to deploy the new strategies. The logical sequence and dependencies of individual actions are determined, together with accountability and projected completion dates. This is very much the ‘how to’ step,

6. Deploy the strategy: This is the implementation step. During deployment management must make any necessary minor corrections or adjustments,

7. Review the strategy: This step completes the loop, and permits a wider and more in-depth review of the model and strategy.

(A diagram of the constraint management model is shown as an addendum.)

The beauty of this model and approach is that the whole strategy is displayed as a logic diagram on one sheet of paper, referred to as “strategy on the wall”. This makes it into a practical working document with the advantages of being visible, integrated, flexible and accountable.

A really outstanding advantage, however, is that it can be constructed in a matter of six to ten working days spread over four to six weeks.

It is not my purpose in this paper to explain ‘Strategic Navigation’* in detail, rather the purpose is to make all those involved in running and managing organisations aware that a ‘silver bullet’ exists in the field of strategic planning. Anybody wishing to delve into the concept in more detail can put the phrase ‘strategic navigation’* into any Internet search engine. Like the ‘throughput world’, a concept described in a previous paper, ‘strategic navigation’* involves minimum financial outlay to implement, but does require a change in mindset by the senior management team and does need some help in its preparation and implementation.

Combining ‘strategic navigation’* with the ‘throughput world’ would enhance the performance and competitiveness of every organisation in the UK.

The next paper will concentrate on ‘innovation and technology transfer’, which has not been handled well by most organisations, particularly SMEs, but could become another ‘silver bullet’ if applied in the right way.

* ‘Strategic Navigation’ is the term for a systems approach to Business Strategy and is the copyright property of H William Dettmer.