Hierarchy of Strategic Thinking
Business people bandy about words like strategy, innovation and culture all the time, but if you ask people to define what these words mean you’ll get very different answers. So when people repeat well-known phrases such as “culture eats strategy for breakfast” what they’re saying is, something (they can’t agree on) is more important than something else (they can’t agree on). Is it any wonder many businesses are struggling in these uncertain times?
Confusion increases further when people start talking about strategy and tactics. Because of increasing uncertainty some leaders reject strategy altogether, as they equate strategies with plans and they know plans don’t survive first contact with reality. Instead they focus rigorously on tactics, by which they usually mean ‘doing things quicker’. But if you’re in a foreign city, trying to find your way to your hotel you don’t start running in random directions hoping you get there soon – as hope is not a very good strategy. In this situation you’d be better off with a map.
For the world of business there is Wardley Mapping — the best approach to strategy you may not have heard of yet. At its heart sits a ‘hierarchy of strategic thinking’ which states that, before you decide WHO must do WHAT by WHEN (operational decisions) you first must agree HOW you’re going to do something (tactical decisions). These might be decisions like, should we use agile or lean methods, or should we enter a new market ourself or find a partner for a joint venture.
However, before you can decide HOW to do something you need to align around WHY you’re making this move here rather than that move there (strategic decisions). These might be decisions like, why are we building this new product rather than something else, or why are we entering this new market rather than some other. But these questions are harder to answer because they’re about the future and the future is an uncertain country. Therefore, you need one more type of thinking first — you need to identify WHERE your options for action are.
Identifying multiple WHERES — different products you can develop that will satisfy users’ needs, or various markets you could enter to satisfy your own need for survival— enables you to compare options and more easily decide WHY these moves here make more sense than those moves there (perhaps market X is better because we have key relationships there; or product X is better because it will force us to develop new skills that will be critical in the future).
Only once you’re aligned strategically — in other words, you’ve agreed on WHY you’re making these moves and not some other moves — should your thinking turn to tactics (HOW to do this) or operational decisions (WHO will do WHAT by WHEN). This is the hierarchy of strategic thinking: WHERE before WHY before HOW before WHO, WHAT & WHEN.
Yet many companies jump straight into operational decisions (WHO will do that) or focus only on tactics (HOW will we do that). This upside-down thinking not only makes it harder to make good decisions but also makes the decision-making process painful and frustrating for those involved. This is why (too) many companies end up outsourcing their strategic decision-making to whoever can answer WHY (we should do this) most confidently. But the answer is all too often “because it’s best practice!” or “it’s what Elon would do!” Organisations need better.
So where does culture come into this? Well, any strategic decision that ‘goes against the grain’ of a business is destined to fail. If you don’t focus on what your customers really need, or develop the skills your people require to satisfy those needs, then you’re going to find yourself in trouble — no matter how quickly you do things. It’s at this point that the ‘thinkers’ (who created the strategy) start blaming the ‘doers’ for poor execution; while the ‘doers’ start criticising the ‘thinkers’ for ignoring what customers really need and expecting employees to implement strategies that they lack the skills or support for.
Therefore, it’s more correct to say, ‘culture eats BAD strategy for breakfast’.
To overcome this problem culture and strategy need to ‘have lunch’: Decision-makers must get together with people from the frontline to identify the multiple WHERES in their landscape and discuss WHY these moves here make more sense than those moves there. Only when there’s agreement about WHY should attention turn to HOW you should do this. If you find that you’re incapable of executing those moves simply go back to your multiple WHERES and make different choices (and simultaneously work on developing those capabilities that you now know you need).
This is the art of strategy in an uncertain world.
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