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February 18 - April 21, 2020
The organization appeared to reward compliance rather than initiative or creativity. The result was passivity and fear.
Generating activity is not a problem; in fact it is easy. The fact that it is easy makes the real problem harder to solve. The problem is getting the right things done – the things that matter, the things that will have an impact, the things a company is trying to achieve to ensure success.
Management thinking has its origins in nineteenth-century science. It saw business organizations as machines, and the management model it adopted was grounded in engineering. While this view has been disavowed by modern management thinkers, its legacy is insidious.
At its most simple, executing strategy is about planning what to do in order to achieve certain outcomes and making sure that the actions we have planned are actually carried out until the desired outcomes are achieved.
The gap between plans and outcomes concerns knowledge: It is the difference between what we would like to know and what we actually know. It means that we cannot create perfect plans. The gap between plans and actions concerns alignment: It is the difference between what we would like people to do and what they actually do. It means that even if we encourage them to switch off their brains, we cannot know enough about them to program them perfectly. The gap between actions and outcomes concerns effects: It is the difference between what we hope our actions will achieve and what they actually
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You cannot create perfect plans, so do not attempt to do so. Do not plan beyond the circumstances you can foresee. Instead, use the knowledge which is accessible to you to work out the outcomes you really want the organization to achieve. Formulate your strategy as an intent rather than a plan.
Having worked out what matters most now, pass the message on to others and give them responsibility for carrying out their part in the plan. Keep it simple. Don’t tell people what to do and how to do it. Instead, be as clear as you can about your intentions. Say what you want people to achieve and, above all, tell them why. Then ask them to tell you what they are going to do as a result.
Do not try to predict the effects your actions will have, because you can’t. Instead, encourage people to adapt their actions to realize the overall intention as they observe what is actually happening. Give them boundaries which are broad enough to take decisions for themselves and act on them.
The very business of getting an organization made up of individuals, no matter how disciplined, to pursue a collective goal produces friction just as surely as applying the brakes of a car. Because of the role of chance, actual outcomes are inherently unpredictable.
If Clausewitz is right, no one should develop a strategy without taking into account the effects of organizational friction. Yet we continue to be surprised and frustrated when it manifests itself. We tend to think everything has gone wrong when in fact everything has gone normally. The existence of friction is why armies need officers and businesses need managers. Anticipating and dealing with it form the core of managerial work. Recognizing that is liberating in itself.
The problem of achieving an organization’s goals is not merely one of getting it to act, but of getting it to act in such a way that what is actually achieved is what was wanted in the first place.
She then observes that “great companies excel at realignment.” They listen to employees and customers “and they use that information to craft and recraft their strategies.”
Our instinctive reaction to the three gaps is to demand more detail. We gather more data in order to craft more detailed plans, issue more detailed instructions, and exercise more detailed control. This not only fails to solve the problem, it usually makes it worse. We need to think about the problem differently and adopt a systemic approach to solving it.
Having issued some warnings about what not to do, von Moltke formulates his positive guidance on giving direction as follows: The higher the level of command, the shorter and more general the orders should be. The next level down should add whatever further specification it feels to be necessary, and the details of execution are left to verbal instructions or perhaps a word of command. This ensures that everyone retains freedom of movement and decision within the bounds of their authority.
The rule to follow is that an order should contain all, but also only, what subordinates cannot determine for themselves to achieve a particular purpose.18
The overall direction should be communicated in a cascade. Direction from the highest level should be kept high level. The levels below add appropriate detail. Each level is guided by the intention of the one above, which whenever possible was articulated in a face-to-face briefing as well as in writing. Understanding the context and the overall intention is what enables junior officers to take independent decisions if the specific orders issued to them become invalid because of a change in the situation.
Adopting mission command as an operating model is not a matter of setting up some processes, but of mastering some skills, perhaps more precisely called “disciplines.” Only when those skills have been mastered can the process be adopted. Taking over the processes without building the skills is simply pouring old wine into new bottles, adopting a dead form.
Von Moltke effectively rejects the notion, so well established that it is often taken as a given, that strategy is a long-range plan, standing in contrast to “operations” which are short-term actions. Yet, if we are not doing strategy now, when will we do it? Surely, if a strategy has any value, it must be something we are doing now. It must inform operations. What we do operationally must be grounded in strategy, it must provide its rationale. Operations must be the manifestation of strategy. Otherwise, the organization would be doing things without knowing where it was heading or what it was
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The best that strategy can do is to offer the probability of success, to shift the odds in one’s favor. Luck will play a part, but a good strategist can manipulate luck by loading the dice.
Strategy is about fighting the right battles, the important ones you are likely to win. Operations are about winning them.
Operations are about doing things right. They involve reacting to problems and eliminating weaknesses, because in conducting operations you are as strong as the weakest link. You can improve by imitating others, because achieving operational excellence means adopting best practice. Strategy, in contrast, is about doing the right things. It involves proactively shaping events and investing in strengths, because in creating a strategy you have to make choices, to decide to do some things and not to do others.
The task of strategy is not completed by the initial act of setting direction. Strategy develops further as action takes place, old opportunities close off, new ones arise, and new capabilities are built. The relationship between strategy development and execution is also reciprocal. Doing strategy means thinking, doing, learning, and adapting. It means going round the loop. The reappraisal of ends and means is continuous.
The art of strategic thinking is to identify which of them is the decisive differentiator, the determinant of competitive advantage. It involves mastering and sorting through a vast range of activities and simplifying them accurately down to the essentials which make the difference. The true strategist is a simplifier of complexity.
Every organizational structure makes doing some things easy and doing other things difficult. If the structure makes doing some things so difficult that there is a conflict between structure and strategy, the structure will win. So if you are serious about the strategy, in the case of conflict you have to change the structure.
Hierarchy is valuable. It allows one to take decisions on behalf of many, enabling an organization to carry out different collective actions simultaneously and cohesively.
The steps required to achieve alignment in the context of friction have been famously and memorable enumerated by the Austrian psychologist Konrad Lorenz. Drawing on his observations about what is needed to make people change, we might modify them for an organization as the following: 1 What is said is not yet heard. 2 What is heard is not yet understood. 3 What is understood is not yet believed. 4 What is believed is not yet advocated. 5 What is advocated is not yet acted on. 6 What is acted on is not yet completed.25
In contrast with the authoritarian, the autocrat is not interested in details, but is conceptual enough to be able to grasp the essentials of a situation and self-confident enough to be comfortable with uncertainty. Autocrats seek responsibility and are able to trust others if they have grounds to do so. They are thoughtful and humane. Wellington was an autocrat.26 Authoritarians micro-manage under all circumstances because it is the only approach they are comfortable with. An autocrat only does so if the circumstances render such behavior appropriate.
Competence is a function of context. I may be quite willing to trust you to drive me to the airport, but not trust you to fly me across the Atlantic. So it is up to me to create a context in which I can trust you.
Experience suggests that managers who have the courage to let go are often surprised by just how much their subordinates are capable of achieving when given good direction. It exploits and develops human potential. Making a start is simply a matter of having faith that the potential is there. It is remarkable how seldom that faith is disappointed.
If company objectives are in conflict with personal ones, only one of them will win. Either the employees leave the company (as regularly happens in the most obvious form of conflict – forced redundancy) or the strategy will be sabotaged, consciously or unconsciously. If company objectives and personal objectives are not in conflict but are indifferent to one another, employees will generally be compliant, and some things will get done, at least until the going gets tough. Only if the two are aligned and mutually supportive will employees feel commitment.
The other is that financial markets like predictability. They like strategies to be plans, and everything to go according to them. Deviation is seen as a “failure to deliver.” Although this is intuitively plausible and comfortingly macho, it is about 150 years out of date and unrealistic.
Similarly, no company should neglect the need for a scorecard, but sophisticated measuring systems can encourage bad driving habits. If there is a problem with a major customer it may not be a good idea to wait for the monthly customer satisfaction indices to come in, even if they are a target you are trying to optimize. Better to get out there and find out what is wrong.
In the final analysis it is behavior that counts. If we close the knowledge and the alignment gaps in the ways suggested so far, we will be able to gain traction, focus effort, and deliver a strategy – until something unexpected happens, which sooner or later it will. At that point everything depends on people. Metrics give us information. Interpreting the information can impart understanding. Taking the right action requires wisdom. Only people can have that.
Executives who master the disciplines of formulating and giving good direction can explain to people what they have to achieve and why, and so make them ready to act. By mastering management they can put people into a position in which they are able to act. And by leading them effectively they can sustain people’s willingness to carry on until the job is done.
When all is said and done, the reputation of a commander rests on his success. How much of it is in fact down to his own efforts is very hard to say. In the face of the irresistible power of circumstances even the best man can fail, and by the same token it can shield mediocrity. That said, in the long run, those who enjoy good luck usually deserve it.
Strategy is a system of expedients. It is more than science, it is the application of knowledge to practical life, the evolution of an original guiding idea under constantly changing circumstances, the art of taking action under the pressure of the most difficult conditions.
