The danger language of unclear strategic objectives

How does strategy work when the objective is not clear?
Creating shareholder value. Winning the war. Reducing the deficit.
SHAREHOLDER VALUE
Does everything boil down to this maxim?
I would put it to you that the ultimate strategic aim happens like this from the top down:
If it is a public company, the market expects to see consistent returns that are growing. This is so that fund managers and other analysts can have a tactical opportunity to make money out of the company’s performance.
If it is private the owners will be wanting consistent returns that are growing. They may want to sell or increase their stake, their opportunities are therefore strategic. Both expectations of the company’s performance are the same although the intent is different
Management have performance drummed into them. It is not theirs to glimpse behind the board curtain but if they do are told that the shareholders expect value. In meetings with the rest of the staff they will repeat this order; it helps enforce unpopular decisions as they can lay the blame for them at almighty, faceless, indifferent shareholders.
Business rather aims at creating sustainable competitive advantage – a mantra drilled into a generation who receptively understand the power of the brand. In simple terms – try and do better than everyone else and keep at it. In difficult times and especially with new business development senior managers are, at least originally, content if they just see some progress.
WINNING THE WAR
The aim of war is usually to win it, especially as winning means defeat of the enemy and further advantages to be claimed from the vanquished. But what happens when there are wars with no clear linear narrative and hazy ultimate objectives? Take Afghanistan. People will generally argue over the reason to invade which may include
to remove the Taliban as they were oppressive (left-wing uninformed view)
to restrict the rise of Islamic fundamentalism which would endanger Western interests in the area, including access to oil (centrist uninformed view)
to punish the country for tenous links with Al-Qaeda and therefore to 9-11 (right-wing uninformed view)
Afghanistan is a threat to its neighbour Pakistan, who has nuclear capability. If Pakistan becomes a failed state it would create a power shift in the region as India has ties to Russia and Central Asia would not be under US/Nato influence (geopolitical strategic view)
Support for a war requires people to be “on message”. None of the above views were steadfastly denied as no strong meaning was given for the war. The closest occurred when a Taliban offensive into Pakistan in late 2009 put Pakistani nuclear missiles within a few hundred kilometres of extremist control. The seriousness escalated and this “reason” was given for Pakistani urgency. It had observers questioning if this was the raison d’etre for the entire war in the first place or simply for the battle.
What is the strategic objective for the NATO powers in Afghanistan? Options include: to oust the Taliban outright; to sue for peace; to contain the Taliban; to get the new Afghanistan powers to take over the campaign – what? At any point in time it is not possible to know if the war is being won or lost and by what standards these outcomes are measured.
REDUCING THE DEFICIT
The economies of many countries are in a problematic state. The immediate response is what is it that needs fixing? Some would say the deficit is the problem which means that the country has to pay of its debts ie. make money and reduce other costs to service the debt. But others would disagree and say that the banking and credit system was the initial problem that exposed other problems and therefore that needs to be restructured before anything else is attempted. Others say that failures of certain systems led to reduced confidence among investors generally. With money not being invested the result is that companies and countries cannot grow (even if it is lending) and therefore they need to stay at there present size. Many financial systems require constant growth to survive, and therefore failure leads to unemployment and divestment which leads to less money going around etc.
My point is that it is not clear what the strategic aim of any recovery plan is. You cannot discount the tactic of “Wait and see” as the global economy is so fine-tuned that a financial crisis in one country (eg Greece) immediately affects a slew of other countries and financial institutions around the world.
CLEAR STRATEGY
When you have pressing problems there is a need for people and process to be aligned with the ultimate strategic objectives. While that sounds glib I’ll ask you to imagine a person in the organisation who is presented with a unique scenario and has to act with no recourse to a higher decision maker. This happens every day in the following environments:
call centres in cities
foot patrols in third world villages
politicians in front of the media and behind closed doors
religious leaders in day to day administering
market traders
all levels of management
I would venture the problem of giving out unclear strategic objectives is an outcome of diffusion of message. Give a press conference in neutral “safe” language in front of the various media and they will misinterpret the message by accidet or by design. Leaders often now this and then resort to PowerPoint which displays the overview which leaves the detail open for interpretation.
Communication is a hollow term in all of these aspects of organisational life. As it is not quantifiable it is regarded as a “soft skill”, but I warrant it is the cause of more system failure than anything else
How does strategy work when the objective is not clear? It cannot work effectively as individuals are put in situations at times where they need to act and need to be “on message”. Surprisingly, some of the everyday scenarios and key problems of our age do not have clear strategic objectives. What the public objective is may detract from the effectiveness of a constructive strategic objective. Consider the following trite maxims.

SHAREHOLDER VALUE
Does everything really boil down to this maxim? I would put it to you that the ultimate strategic aim happens like this from the top down:

If it is a public company, the market expects to see consistent returns that are growing. This is so that fund managers and other analysts can have a tactical opportunity to make money out of the company’s performance.
If it is private the owners will be wanting consistent returns that are growing. They may want to sell or increase their stake, their opportunities are therefore strategic. Both expectations of the company’s performance are the same although the intent is different

Management have performance drummed into them. It is not theirs to glimpse behind the board curtain but if they do are told that the shareholders expect value. In meetings with the rest of the staff they will repeat this order; it helps enforce unpopular decisions as they can lay the blame for them at almighty, faceless, indifferent shareholders.

Business rather aims at creating sustainable competitive advantage – a mantra drilled into a generation who receptively understand the power of the brand. In simple terms – try and do better than everyone else and keep at it. In difficult times and especially with new business development senior managers are, at least originally, content if they just see some progress.

WINNING THE WAR
The aim of war is usually to win it, especially as winning means defeat of the enemy and further advantages to be claimed from the vanquished. But what happens when there are wars with no clear linear narrative and hazy ultimate objectives? Take Afghanistan. People will generally argue over the reason to invade which may include

  • to remove the Taliban as they were oppressive (left-wing uninformed view)
  • to restrict the rise of Islamic fundamentalism which would endanger Western interests in the area, including access to oil (centrist uninformed view)
  • to punish the country for tenous links with Al-Qaeda and therefore to 9-11 (right-wing uninformed view)
  • Afghanistan is a threat to its neighbour Pakistan, who has nuclear capability. If Pakistan becomes a failed state it would create a power shift in the region as India has ties to Russia and Central Asia would not be under US/Nato influence (geopolitical strategic view)

Support for a war requires people to be “on message”. None of the above views were steadfastly denied as no strong meaning was given for the war. The closest occurred when a Taliban offensive into Pakistan in late 2009 put Pakistani nuclear missiles within a few hundred kilometres of extremist control. The seriousness escalated and this “reason” was given for Pakistani urgency. It had observers questioning if this was the raison d’etre for the entire war in the first place or simply for the battle.

What is the strategic objective for the NATO powers in Afghanistan? Options include: to oust the Taliban outright; to sue for peace; to contain the Taliban; to get the new Afghanistan powers to take over the campaign – what? At any point in time it is not possible to know if the war is being won or lost and by what standards these outcomes are measured.

REDUCING THE DEFICIT
The economies of many countries are in a problematic state. The immediate response is what is it that needs fixing? Some would say the deficit is the problem which means that the country has to pay of its debts ie. make money and reduce other costs to service the debt. But others would disagree and say that the banking and credit system was the initial problem that exposed other problems and therefore that needs to be restructured before anything else is attempted. Others say that failures of certain systems led to reduced confidence among investors generally. With money not being invested the result is that companies and countries cannot grow (even if it is lending) and therefore they need to stay at there present size. Many financial systems require constant growth to survive, and therefore failure leads to unemployment and divestment which leads to less money going around etc.

My point is that it is not clear what the strategic aim of any recovery plan is. You cannot discount the tactic of “Wait and see” as the global economy is so fine-tuned that a financial crisis in one country (eg Greece) immediately affects a slew of other countries and financial institutions around the world.

CLEAR STRATEGY
When you have pressing problems there is a need for people and process to be aligned with the ultimate strategic objectives. While that sounds glib I’ll ask you to imagine a person in the organisation who is presented with a unique scenario and has to act with no recourse to a higher decision maker. This happens every day in the following environments:

  • call centres in cities
  • foot patrols in third world villages
  • politicians in front of the media and behind closed doors
  • religious leaders in day to day administering
  • market traders
  • all levels of management

I would venture the problem of giving out unclear strategic objectives is an outcome of diffusion of message. Give a press conference in neutral “safe” language in front of the various media and they will misinterpret the message by accidet or by design. Leaders often now this and then resort to PowerPoint which displays the overview which leaves the detail open for interpretation.

Communication is a hollow term in all of these aspects of organisational life. As it is not quantifiable it is regarded as a “soft skill”, but I warrant it is the cause of more system failure than anything else.

About Derek

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