Only about 10-30 percent of the planned strategies are ultimately realized. However, the recipes for success often seem quite simple. If this is the case, the question inevitably arises as to why our success rate is often so low? Moreover, the average lifespan of an organization is shorter than a human life. What can organizations do to perform better and how can we ensure our survival and develop the ability to transform and adapt, especially in the age of digitalization and Industry 4.0? However, top management spends less than three percent of their time shaping the long-term future. Even if this figure is questionable, it is an indicator that there is enormous potential to create our future much better. It is our challenge as managers or entrepreneurs/intrapreneurs to think without limits and to prepare and shape the future. Any straitjacket in thinking, especially in innovation, must be eliminated. It is time to familiarize you with the concept of the Strategic Control Loop and the TUDAPOL principle: unlimited thinking, agile development, lean production and operation. This principle should enable you to meet the management challenges in the age of globalization, increasing complexity and digital transformation.
Dr.-Ing. Arno Ritter, MBA has been a manager in the largest European organization for applied sciences and a manager in a global consulting company. As a lecturer, he taught International Strategic Management. Since 2015 he has been working as an independent management consultant and coach.
1 THINK UNLIMITED!
"If you want to build a ship, don't gather the men to find the wood, prepare the tools or divide up the work and delegate tasks - instead teach the men the longing for the endless, wide ocean" (Antoine de Saint-Exupery).
1.1 Criteria for strategic success
Nebulous visions prevent success. Unlike mockers could perhaps indicate, a corporate vision has nothing to do with religious appearances or hallucinations. However, the former German Chancellor Helmut Schmidt shared this opinion and proposed to consult a medical doctor. A shared vision can be a powerful mean or weapon and it is telling what the organization stands for. For example, the dream of flying has spawned many technology-enthusiastic entrepreneurs, such as the Wright brothers or men like Graf Zeppelin, Hugo Junkers or eccentrics like Howard Hughes. Hugh Hafner was a slightly different eccentric. These men (though quite commercially successful) were not driven primarily by principles such as shareholder wealth's maximization. Of course, money is always important, but these entrepreneurs had a far-reaching vision which enables us today to flight to exotic places such as Hawaii or Bali, do business or visit our family members all over the world. By the way, not all of us have the money and time to sail over the oceans. Others are enjoying to take a ride with the amazing Big Boy (UP 4014) and don't seem to care about carbon dioxide; at least, I would like to see this giant entering the Sherman Hill!
Visions can inspire us in the truest sense of the word. Think of president Kennedy's vision of reaching the moon before the Soviets after the Sputnik shock. The moon landing was a huge success for mankind, though there are still contemporaries who believe that the moon landing was filmed at Disney Studios. Well, I will not argue with you about that.
Figure: UP 4014 "Big Boy": At the begin of this century, none of these giants has been serviceable. However, railroad enthusiasts and UP made it happen again. Many thanks to them! Therefore: Think Unlimited! There is no excuse. We can do!
Let us agree on the following: Visions can and should inspire ourselves, our employees, but also our suppliers and customers. But corporate visions can quickly seem ridiculous if they are defined as platitudes. I could mention a few negative examples, but maybe I would like to work with these companies in a few years. Well, I prove to be an opportunist.
Almost every large stock corporation share their visions or mission statements. Just have a quick look on the internet and check your company's vision; do you like it? It is actually a good idea to share your values, targets and vision if you are proud of them or if they are meaningful. Transparency is normally positive. However, it could become a "boomerang" if the vision is formulated in an arbitrary, meaningless or interchangeable way. You can recognize this easily if the vision is based only on fashion or buzzwords, such as "Agile", "Global", "Sustainable" or "Environmentally friendly". In my first job at the largest European research organization for applied sciences, we liked to play "bullshit bingo" with the respective emotive words of the season in department meetings. It's almost as much fun as "PowerPoint karaoke".
Sometimes, when people are formulating visions or mission statements related to economic success, they behave like walking on eggshells (and not only due to "Occupy Wall Street" or "Friday for Future"). However, economic goals are important, even if we are embarrassed about them. Communism has never been an alternative. Of course, there are many other important, legitimate goals, such as corporate citizenship, social responsibility, fair trade, technology leadership, dealing with the climate change, pandemia and so on.
In the end, a company must always care about money. Let us take a look at the positive side: Without money, we would run out of business and we could not invest in our future. We could not develop new products or services, recruit new employees, develop our employees, serve the common good, or protect the environment. We could not do all the good things that enable our success in the future and make the world a little bit better.
But buzzword visions are not really helpful. Visions even ridiculed by the employees have a fatal impact. The loss of reputation is just one aspect of it. In addition, we lost the commitment of our employees. We have also lost an opportunity to inspire them and take with us on a journey into the future. This is where real leadership is needed!
Perhaps, people from "Old Europe" might be less enthusiastic than their US counterparts when they are discussing visions and mission statements. However, you can only be successful, if your supporters are sharing your values, goals or visions with you and if they commit on the derived targets. Therefore, visions that are difficult to communicate, which could be misunderstood or which are not shared must be avoided in any case. Furthermore, we must convince our people and win them over on board. We must get their commitment. The same applies to the strategic corporate goals and the strategic intent, which are derived from the visions.
Furthermore, not committed unclear strategic goals prevent success! Your spouse will always be dissatisfied if you have not understood the subtle hint for the next holiday or Valentine's Day.
The vision of my wife versus the reality
Figure: I like Paris
My wife was also a little bit surprised that the Paris I have had in mind for vacation has been the Paris in Idaho. The promised fantastic experience was not shopping along the Avenue des Champs-Élysées, but walking around stinking, bubbling mud pots in the Yellowstone National Park (without cell phone access and without wireless internet at the hotel). The management professor Robert M. Grant may have had similar experiences with his family and therefore he highlighted following key success factors for a strategy (Grant 2002):
- Simple, long-term goals which are accepted in the organization,
- profound understanding of competition and competitors,
- objective appraisal of own resources and competencies and
- effective implementation.
Grant also pointed out that strategic decisions are always relevant to the entire organization, must be shared across the organization, and are not easy to revise. Conversely, it is an easy way to prevent success if you do not meet these conditions. This view is reflected in my personal experiences. Let me explain: Scott Adams, the creator of "Dilbert", once told of the case of an American employee who violated a corporate policy he was not familiar with. When he asked HR if he could get this set of rules in order to avoid any mistakes in future, he was told that this was not possible because the policy was classified as top secret (Adams 1998). Aaargh!! It is clear that not everything has to be publicly known. Some secrets have to be hidden (and not only your personal dark secrets). Think about your competitors! Your successful strategies should not be copied too easily! A hidden agenda can - I would like to emphasize here - make absolutely sense; think of the military concept of camouflage and deception. Applied to the strategy, however, it should be obvious that a strategy can only be successfully implemented if it is known to the relevant stakeholders. It is actually very easy to do anything against the lack of understanding or against ignorance of the corporate strategy or corporate vision. For example, use a clear, unambiguous language, and generally use appropriate corporate communication. Opportunities and resources are numerous: newsletters, intranet, awareness sessions, New Year's speeches, introductory events for young employees, etc.
Of course, goals in and of themselves must always be clear and understandable and should not require much explanation. Furthermore, unclear instructions or unclear requirements prevent success. On top of that, there is the type of employee who takes advantage of the situation. Moreover, goals, mission statements and strategies should not change permanently and too frequently. Otherwise, it will result in a mess or instability (within processes, organization, etc.). Even customers and investors do not necessarily reward that. I will come back to this at a later stage when we will discuss the approach of the strategic control loop.
Consider, for example, a reorganization. The employees could be affected in a positive or negative way: e.g. getting new bosses, colleagues; getting new tasks and positions, or getting fired. Maybe, everything is improving. But think about how the people are feeling, what they are thinking and what they will do if they do not know anything and make only wrong assumptions about the planned changes. The change is mostly not the main issue. The wrong assumptions and perceptions are the issue! Once again: Changes are not always bad. Quite often, employees understand the need for change. They may even request and expect the change. And I mean "change" and not "change" like the smart beggar who has written on his paper cardboard: "I am like Obama, I need change".
Uncertainty is mostly perceived in a negative way, although a level of uncertainty is belonging to our life (or makes it exciting). Above all, if this state of...