Strategy

I have always believed that the majority of the operational decisions of a company need to be made from a set of core philosophies, precedent of past decisions and guidelines—those that guide the rationale behind nearly every decision. This is called principle-based decision-making, as opposed to situational-based models that make one decision at a time without a repeatable philosophy or rulebook. I have seen companies where situational-based decision making is dominant, creating erratic “one-off” decisions dictated by personality, familiarity and the last lobbyist. Mr. X receives a different decision than Ms. Y because of who they are or when they ask, not based on the principle of the issue.

Inconsistency of decision-making confuses those within the company, often giving way to a process of “game-playing” to get the desired answer. This is particularly an issue in technology-oriented companies due to the genetic personality type of the leadership. The natural tendency of the technology-trained decision maker is not to elevate to principle, but rather to dive into more detail. These individuals feel that somehow, by obtaining more detail, enlightenment eventually becomes evident and custom decision-making is a more sophisticated approach. But detail mining can also be used as justification for inconsistent answers on issues. When situational-based systems dominate, people within the organization start to game the process. They plot the timing. They selectively choose the sequence of who to asks last. And they usually tell their friends how to beat the system to get the answer they want.

If situational decision-making takes over, layers of the company’s management create added variation. One unit’s answer to a common problem/issue may be totally different than another unit. Soon the rank and file of the company categorizes the managers into “liberal” […]

Recently, many of us have been enthralled watching World Cup football. For me, it brought home a graphic example for an article on organizational design I have been working on for a year.

In the first game the U.S. team played against Ghana, their star striker, Jozy Altidore, went down with a tournament-ending leg muscle injury. The U.S. had no replacement for Jozy’s offensive capabilities. They replaced Altidore with a defensive mid-fielder, counted on only one striker and altered their strategy for the rest of their games to be purely defensive. The U.S. team’s star performer became their goalie that made a record 16 saves in their last game—a one-goal loss to Belgium. They didn’t win another 2014 World Cup game after Jozy was hurt, came in dead-last of all teams in time of possession (a metric of dominance) and were eliminated from the tournament.

Their coach (the sports equivalent to a CEO), Jurgen Klinsmann, could do nothing except cheer and show confidence. He urged his team to show more offense but their scoring talent and attitude was not up to the challenge. In the U.S.’s case, the talent and skills of players on the field reflected the outcome, not the coach’s wishes. The U.S. became an unbalanced, defensibly minded team—a strategy that rarely wins over time, and was evident at the 2014 World Cup.

The coach’s real job began well before the games when he chose the talent for the team. Jurgen simply did not select enough offensive talent to achieve balance. He opted for just a couple of scorers. This same thinking can be true in companies.

Corporations that are similar in their rationale are reflected in the balance of “players they put on […]

For the first 20 years of my career, I regarded strategy and vision as, essentially, the same thing. One might have a slightly shorter horizon, but the difference seemed more like “wordsmithing.” During those years, the strategy was to become the best and largest in a select vertical segment. This was accomplished through geographical expansion, investment in applied technology, hiring talent from the best schools, winning the most important projects in the industry and having a reputation for both doing good work and standing behind it. Each of the components of this strategy had plans and personnel responsible for their accomplishment. We hammered away, year by year, using industry “league tables” as our barometer for success.

Sure, I read the business articles about companies that had noble end goals like “we provide mobility, not cars,” but it didn’t register as to how that might apply to us. Implementation seemed so much more important than philosophy.

My perspective changed in 2005, when I was invited as the only representative from an engineering firm to join the Clinton Global Initiative (CGI). The CGI was devised by President Clinton to serve as a forum for nongovernmental organizations (NGO) and Fortune 500 companies’ leaders to look at world problems and brainstorm how these could be solved without government. It was nongovernment activism to look at poverty, climate change and education from the volunteer energy of the private sector. Due to the draw of President Clinton, world leaders and many brand-name CEOs attended and, before the end of the conference, gave huge monetary or in-kind gifts toward one of the issues. I must have been the CEO of the smallest company there, but was treated as an equal.

One evening I was seated […]

There have been many outstanding books written about ‘branding’ and yet I find that few are read outside of the public relations and advertising industries. If you were to ask one of those professionals about the topic of branding, they would tell you it is an extremely serious and vital component to the success of a company.
A ‘brand’ applies to all companies. There is always a company brand whether it is intentionally created by the organization or simply constructed by the market. A brand encompasses that company’s reputation and image. It can be creative or stogy; innovative or proven; human or physical, and serves to communicate what the company intends to accomplish through its values.
I have always been completely frustrated with the lack of interest in the branding of technical firms with which I have been associated. Often, their brand attitude fluctuates between total indifference and a desire to be ‘me too,’ copying the claims and messaging of competitors and, thereby, failing to distinguish their own strengths. This approach, or lack there of, to branding often stems from a flawed internal opinion that the brand should reflect your history or portfolio of past work, as opposed to the company’s culture. For engineers, this translates to a brand made up of concrete monuments, usually represented by endless aerial-oblique photographs taken 1000 feet above the structures or cross-lite surface photos of bridge cabling or the winding interior of a tunnel. There is a conviction that, just as the wall of the corporate reception area should be lined with awards for past feats; the company’s identity is physical.  Of some 50 technical companies I observe, only about 5% do something different with their brand strategy, giving them a ‘savvy’ image in the […]