Which makes US Patent #6,249,768 so cool. It’s a patent held by IBM for “an integrated framework for analyzing a firm in terms of its resources, capabilities and strategic positions, providing a Strategic Capability Network composed of nodes signifying these resources, capabilities and strategic positions, together with relationships between these nodes.” Apparently, you can patent your strategy. This patent contains solid references to articles from Strategic Management Journal and, quite interestingly, other patents.

If strategy is patentable, then are we on the verge of companies like McKinsey or Bain becoming patent trolls themselves?

David Burkus is the editor of LeaderLab. He speaks, consults and serves on the faculty of management at Oral Roberts University’s College of Business.

1. What business are you in?
2. What will you sell?
3. To whom will you sell?

You’d think executives from the same organization would offer the same responses. More often than not, their answers can be as different as night and day. Why?

Because people struggle with specificity; they hate strategic confinement. And yet, specificity and focus is the key to great strategy. Even though most senior executives know that being all things to all people is the roadmap to disaster, they can’t seem to help themselves. They cannot ignore the lure of opportunity – any opportunity. The ethic of more balls in the air, more chances of success lurks in their subconscious.

Years ago I had the displeasure of consulting for a Canadian natural gas company. In a strategy seminar I asked the leadership team to tell me what business they were in. The answer should have been a no-brainer.

The CEO said, “We’re in the peace-of-mind-business.”
“So is Allstate,” I said to myself.
One of the VPs then said, “We are in the customer service business.”
To that, I wanted to say, “Who the hell isn’t?”

The irony in the VP’s response is the fact that this company was poor at customer service. You can imagine my frustration. At the outset of this assignment I’d worried that this wouldn’t be a fulfilling gig. I should have listened to my instincts. Thankfully, Fortis Inc. acquired this misguided company. If the group I worked with is still there (which I highly doubt), they are now singing from the new parent’s strategic hymn sheet.

Here’s how the Fortis B2B team define themselves: Natural gas is our business. At Fortis we help businesses use natural gas more efficiently, save energy and seek innovative energy solutions to save money. This statement brings clarity. They tell us what business they are in (gas), what they sell (efficiency), who they sell to (businesses) and how those customers will benefit (lower costs).

So, is Fortis finished with strategic craftsmanship? Not quite. I’m going to assume they’ve identified their competitive advantage and the secrets of success in the business they’ve defined. Competitive advantage is strategy’s ultimate purpose. After that, you migrate to tactics – which battles to wage, when, how and with what resources. Defining strategy begins with a mind-set that is analytical, intuitive and creative. Executing the strategy requires the discipline to stay the course and not give in to non-strategic temptation.

John Bell is a strategy consultant and former CEO of Jacobs Suchard (Kraft, Nabob). He is a contributor to Fortune magazine and a regular blogger at CEO Afterlife.

The irony is this: the best strategies are actually those that require sacrifice. These strategies tell you what not to do. Once strategists carve out their course of action, the best ones stick to it like glue. They don’t want to hear about the innumerable opportunities on Mount Elsewhere. They want to know how to better trek Mount Here, the vista everyone on the team agreed to climb in the first place. Consider these basic strategic questions:

What business are we in?
What will we sell?
To whom will we sell?
I’ve posed these questions to hundreds of senior executives. You’d think I’d get similar answers from the executives who work in the same company. Think again. Answer the questions with a view to focus, clarity and differentiation and you will be on your way to a compelling business strategy. More on “the questions” in next week’s post.

People worry that strategy slows a company down and limits growth opportunities. The opposite is true. Look at the success of Apple. Big. Fast. Focused. Innovative. Steve Jobs managed to harness the resources of 49,000 employees to introduce and successfully market a slew of breakthroughs. Both Jobs and Tim Cook were adamant in saying “no” to thousands of projects so that they could focus on the few that were truly meaningful to Apple.

Take Starbucks. Howard Schultz grew the company at an outrageous pace. All it took was three decades for Starbucks to catapult from the Pacific Northwest to 17,000 stores in 55 countries, $10 billion in sales and $950 million in profit. Schultz’s vision for Starbucks was a social community with a defined culture that people would aspire to connect with, (over a cup of distinctive, dark-roasted coffee). Seemingly, the personality of the brand impacted every decision about the experience and the ambiance – the furniture, the artwork, the exotic names of the bean origins, even the music.

With so much written about the success of so many great companies led by outstanding strategic visionaries, one has to wonder why there is less and less attention paid to the tenets of good strategy in today’s business.

John Bell is a strategy consultant and former CEO of Jacobs Suchard (Kraft, Nabob). He is a contributor to Fortune magazine and a regular blogger at CEO Afterlife.

Clout is a very effective growth strategy for many organizations. Monsanto is a good example. According to licensing agreements and industry sources, Monsanto’s stranglehold on the genetically-engineered seed market in the United States and the world squeezes customers, limits competitors and provides staggering profits. Regulators now worry that declining seed competition may lead to price increases on foods that every American family consumes. That’s because many of the foods you eat throughout the day were likely produced from crops grown with Monsanto’s patented genes. For years, Monsanto has been criticized by farmers, government and environmentalists for its practice of leveraging clout. You wouldn’t know it from the first page of their website . . . “Better Seed for a Brighter Future. If there is one word to explain what Monsanto is about it would have to be farmers. We create the seeds, the traits, and crop protection chemicals that help farmers produce more food using fewer resources.” How’s that for spin?

Clout is also Kraft Foods’ clandestine business strategy, achieved through acquisition (General Foods was the first big catch, then Nabisco, Jacobs Suchard, and Cadbury, just to name a few). But to hear Kraft tell it, the company’s phenomenal growth is the result of their astute brand building. Their size ($49.2 billion in sales) provides huge economies of scale throughout the operation, especially in production, fixed overheads, distribution and marketing. This is a tremendous competitive advantage. But you will never hear about clout from their leaders or read about it in their annual report. I should know. I worked for Kraft for the better part of a year after they acquired Jacobs Suchard. For the record, this is how Kraft articulates their growth strategy: “The complementary nature of our portfolio is at the heart of the three strategies that will drive our growth:

1. Delight Global Snacks Consumers.

2. Unleash the power of iconic heritage brands.

3. Create a performance-driven, values-led organization.

Delivering on these strategies will put us in the top tier of our peer group and provide our shareholders with top-tier returns on their investment.” Top tier of Kraft’s peer group? I’d like to know how they measure that. Top-tier returns? No doubt about it– $4 billion in earnings last year. Thank clout for that.

In the petroleum industry where access to oil is tight, Exxon Mobil and Royal Dutch Shell say they are adjusting their strategies to meet the growing demand for alternative energies. Likely true. You might think the current squeeze on oil supply would hurt their profits. It has not – 2010 profits for Exxon and Shell rose by 57 and 61% respectively. Exxon Mobil, with refineries 50% larger than the industry average, is one of the few giants prepared to declare clout as strategy. Here is how they position it: “The superior scale of our refineries provides a competitive advantage.” Kudos to Exxon Mobil for honesty. Shell, on the other hand, muddies the strategic scope – “global exploration, focused acquisitions, accelerating resources to value, cost efficiency, integrated gas leadership, technology + partnerships, portfolio concentration, selective growth . . .” Blah, blah, blah.

I’m wondering if ‘clout’ companies worry that their employees might be demoralized when they realize that most of the company’s success comes from size rather than smarts. I’ve seen plenty of examples where giants are successful in spite of themselves. This could be why the leaders of these enterprises won’t admit to clout as a ‘slam-dunk” strategy.

1. Involvement of Strategic Planning Consultants. Okay, I don’t want to tar every consultant with the same brush, but generally, consultants take a bunch of company time going through endless analysis. They have to. Think about it; their meters are ticking. When all is said and done, the company will have a polished, professional-looking document that the Board of Directors will love. But, seldom do these strategic plans drive a company into the future. Trust me, the process will be repeated the next year, and other than a change in date, you will have a tough time telling the two plans apart.

2. Building the Plan From the Bottom Up. Isn’t top management supposed to be the strategic experts of the organization? Assuming that is the case, shouldn’t the plan be generated, top-down? “Oh no,” say strategic planning specialists. “If your employees aren’t involved in the process, you won’t have buy-in or satisfactory results.” Every CEO wants buy-in. Getting it is a case of the CEO sharing the plan with employees, communicating what should be done, why it should be done and how it will be done. If employees nod to that, the CEO has buy-in.

3. Thick, Convoluted Strategic Documents. These are like company manuals on a book shelf collecting dust. Clarity, purpose, the what, why’s and how’s can be captured on one page. This requires hard work and deep strategic thought. Ever heard the saying, “I would have written a shorter letter, but I didn’t have the time”?

The one-page strategic plan was introduced to me by my former employer, Jacobs Suchard (Toblerone, Milka, Nabob, Cote d’Or). For 15 years, I participated in the creation of the one-pager for Suchard. The process was excellent – several initiatives competing for a page of limited real estate, healthy debates on competitive advantage and timelines, cultural soul searching. In my consulting afterlife, I helped dozens of companies craft their own one-pagers. Every time I suggested the single page to a new client, the CEO would raise an eye. How could something so important to the future of their companies possibly fit on a page? They would say, “but my business is different and way too complex for that.” But in the end, after much coaxing, they came on board. I remember the day I convinced the CEO of a $2 billion company with three divisions to opt for focus and clarity. In seven years, that business boasted another billion in sales.

John Bell is a strategy consultant and former CEO of Jacobs Suchard (Kraft, Nabob). He is a contributor to Fortune magazine and a regular blogger at CEO Afterlife – where this post originally appeared.

Consider this quote:
“Executive summaries of requests for decisions are useful tools to consolidate our thinking, but they are not an end in themselves, intended to replace the substantive analysis that normally accompanies such high level summaries. If we begin framing all our thinking and communication in briefing note formats and bullet point analyses, there will inevitably be a tragic erosion of deep engagement with the issues” (Self, 2010a, p.18).

While Self wasn’t directly critiquing strategic planning (SP), that “tragic erosion of deep engagement” is an articulate description of many strategy plans as well.

John Bell wrote a great post called “Why Mission Statements Suck”. I agree, but only because most organizations write the mission statement, post it on their boardroom wall and then forget about it (until the next SP retreat of course). Mission is usually figurative, not integrative. The fault is not in the mission statement itself, but in the discernment of the mission and utilization of the mission in decision-making. But how exactly does one ‘discern’ the mission?

My colleague Dr. Gordon Self has developed a Mission Discernment Tool for use within Covenant Health (Disclaimer: I also work for Covenant Health). In a nutshell, the tool allows leaders to ‘discern’ which path to take as they inevitably face crossroads of decisions, using their mission as the guide.

SP assumes we know all the paths ahead, and that if we try hard enough, we can map our organization’s linear path through the future. But it becomes useless when those paths inevitably change or end up as deadends or cliffs. Mission Discernment assumes the future is blurry and somewhat unpredictable. It assumes leaders will face really tough decisions that can’t be predicted in detail. It is not for petty decisions like what colour of pencils you should buy. Rather, it is for organization-altering decisions such as: Do we expand into this market? Do we lay-off part of our workforce? Do we bribe our way into this country or not? Do we outsource part of our organization? Do we invest in this new service/product? These are tough decisions that make or break leaders and organizations. The Mission Discernment tool gives a framework to wrestle with them.

Mission Discernment also gives us a framework to wrestle with moral decisions our organizations inevitably face. I wonder if Niko Resources would be paying a $9.5Million bribery fine if they had discerned their decisions before bribing foreign officials?

The tool was developed for a Catholic healthcare organization, but I foresee it being adapted to any organization that has a strong, thoughtful and unique mission, and wants to thrive in the future through that mission. It won’t replace strategic planning, but can definitely be a great resource for any leader facing a formidable labyrinth of decisions ahead of him/her.

The Mission Discernment Tool can be viewed here.

Self, G. (2010a). Mission Discernment: A preventative ethics strategy for leaders in Catholic health care organizations. Doctoral Dissertation at St. Stephen’s College.

Self, G. (2010, Nov-Dec). Put values Up front: New discernment tool makes sure values aren’t left to chance. Health Progress. Download article here.

Tim Vanderpyl is a Certified Human Resource Professional (CHRP) with Canada’s largest catholic healthcare organization. He holds a Master of Arts in Leadership from Trinity Western University and is working toward a Doctorate in Strategic Leadership at Regent University. He can be reached by email here or at his website timvanderpyl.com.

***

I wrote the title of my last post a bit sarcastically, but perhaps it had more truth to it than I initially thought. We do kill a lot of trees when engage in strategic planning (SP). “Are those trees worth it?” is still my question.

There are lots of diverging opinions on the subject, but many of the opinions depend on your direct role in the SP process. Consider some of the stakeholders:

• CEOs – I’m not 100% convinced they read the Strategic Plans themselves, but they do look really pretty (especially after Communications departments get ahold of them) and somewhat useful to shareholders and boards. CEOs go along with the exercise because they don’t want to be perceived as being strategy-less.
• Boards & Shareholders – Probably love SP because it gives them something tangible to hold and dissect. What they don’t know (and forget to ask) is how many of these plans are being used as coffee coasters in the offices and how many swear words were directed at the people who forced middle managers to fill in all the boxes and checklists. A printed plan is not an implemented plan.
• Middle Managers – Love the thought of SP because it allows them to think for a minute that their opinion actually counts (until the CEO trumps it with a new direction). Hate the actual work involved in doing them unless they are part of the SP department (in which case, this is life-and-death work).
• Consultants – Love SP! It makes them a lot of money after all. (oops, did I just write that? If any future clients of mine read this, strategic planning is worth the $$$ I will bill you).
• Frontline Staff – Couldn’t care less about SP and another corporate initiative brought on by all of the above people (see coaster comment above).
• Customers – Just want the dang product (or service) and wish there were less people strategically planning and more people serving them or making products for them.

In our enthusiasm about the next fad in planning, do we forget to actually measure the value in strategic planning itself? How many dollars are wasted each year by planning exercises begrudgingly done by those involved. Does anyone dare ask whether we “Should” be planning and risk being labelled an organizational anarchist?

I am still not convinced SP is worth it, but some of the commenters on my previous posts indicate that there is some hope out there. My favourite comments were from John Bell. He advocated for a one page (maximum) strategic plan. One page of paper makes a horrible coaster, so perhaps he is onto something. John, if you read this, we’d love to hear more from you on the one page Strategic Plans. You may singlehandedly save thousands of trees by sharing with us.

Tim Vanderpyl is a Certified Human Resource Professional (CHRP) with Canada’s largest catholic healthcare organization. He holds a Master of Arts in Leadership from Trinity Western University and is working toward a Doctorate in Strategic Leadership at Regent University. He can be reached by email here or at his website timvanderpyl.com.

We love to promote workplaces that involve the frontlines, get everyone involved, engage our employees…but has anyone ever been engaged by a strategic plan? I am sure they have been disengaged by one, but I doubt their engagement has increased.

When we spend too much time planning, and not enough time doing, we have a problem in our organizations. And that is my main frustration with strategic planning. Strategic plans vortex thousands of man hours into producing pretty documents and spreadsheets, and forget that someone still has to lead. If the leader is spending most of his time reading and producing those documents and spreadsheets, is he actually leading? If she is leading effectively, does she actually have time to care about the strategic plan itself?

My theory: Strategic planning is simply an invention to justify the existence of middle management, and not a useful tool for those doing the actual leading or for the guys at the bottom doing the real work.

If I’m wrong, please send me examples of its usefulness. I really want to hear about them. If I’m right, please save a few thousand trees and stop producing more plans no one will read. My future kids will thank you for caring so much about the environment.

Tim Vanderpyl is a Certified Human Resource Professional (CHRP) with Canada’s largest catholic healthcare organization. He holds a Master of Arts in Leadership from Trinity Western University and is working toward a Doctorate in Strategic Leadership at Regent University. He can be reached by email here or at his website www.timvanderpyl.com.