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June 24, 2005

A Purpose Driving a Performance

The triple-take I did today when reading through InformationWeek might have come from not paying enough attention to the headline of Stephanie Stahl's Editor's Note on CIO priorities, Customer Focus Promotes Growth; but on fourth thought, I think not!

A lot of us are accustomed to hearing that customer focus is a strategy. And although the idea that strategy promotes growth has lost some cache in the age of Execution, there are those who still believe it. Certainly there's momentum still behind thinking of growth as "good performance". Thus, the argument that strategy stokes good performance.

But according to the article, Michael Treacy of Gen3 Partners had recently warned the audience at the Optimize CIO Summit that "The best management team beats the best strategy every single time." And the followup advice: commit everything you do to customer value.

Take One: okay. When is a "strategy" not a strategy? What Treacy seems to be doing is drawing a competition between commitment (organization? action?) and planning (ideas?)... By saying the Best this or that, he hasn't given any company a leg up on any other, since every company must be managed. So instead, how about great management beats not-so-great management -- and the real question is, what makes management great? Is it the guidance received from a strategy, or is it the guidance from something else?

Take Two: What if the purpose of strategy is actually NOT to drive "performance" ?? One thing we know about strategy is that when you do have one, you have a consistent, goal-oriented perspective from which the running states and events of the business are evaluated. But the perspective is a hypothesis, essentially, about how things work to your benefit, and the point of the strategy is to encourage a pervasively consistent logic in decision-making. Reality keeps testing that hypothesis, though, and eventually you find out if the hypothesis was "correct"... Is Treacy saying that management is about doing something that connects with a reality that is more influential than strategy? (Sidebar: I'm reminded that Columbus had a theory about how to find what he was looking for. His theory was wrong, the world's not flat; but he "managed" reality, and wow, look what he found. The question is, what's the chance he could count on a payoff like that twice in a row, using a bad theory? Let's just say, with our excellent 20/20 hindsight, that we'd let him cruise a small planet, but we wouldn't put him in charge of the space station rendezvous...)

Take Three: If pervasively consistent logic can be had from something other than strategy, is it the management team that is the source? If yes, maybe what's being put up front is Leadership, which is not the same thing as strategy. Meanwhile, I can't help but notice that strategy and leadership are both forces of Alignment.

But being customer-focussed does not magically "turn managers into leaders" -- and if growth comes from customer focus, maybe it's because (and only when) leadership is strong enough to draw growth from customer focus...

Which leaves me with three thoughts:

First, what the heck would make a strategy a "best" strategy if there was not correspondingly great management available to back it up?

Second, certainly there are leaders who mainly try to draw growth from strategy. For those who see customer-focus as a strategy, they're also likely engaged in using great management to draw growth from the strategy. Maybe a "contest" between strategy and management is only happening when the leader feels it and feels like one of the two must change.

And third, once again, what makes great management great? Well, just try to find a great management team that doesn't have great communication. And what do they talk about? The same things that a strategy would ask them to talk about... Why is this so interesting? Because one of the top reasons that senior managers and executives voluntarily leave their positions is that they feel their views are not being taken seriously. And what is the focal point of reconciliation of divergent executive views? Strategy.

Posted by Malcolm Ryder at June 24, 2005 4:04 PM

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