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IAN MANN REVIEWS: When penguins try to fly – why strategic decisions so often fail

Dec 23 2019 08:39
Ian Mann

Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can and Can’t Do Well, by Alex Castro

"Fifty percent of all strategic decisions fail," asserts the author, Alex Castro. I think that is an understatement.

Being able to tell which opportunity you pursue will almost certainly fail, and which has the best chance of success, would be of huge benefit to business leaders. This book points the way by providing an approach that will increase your confidence in your capacity to move forward.

When penguins try to fly

What differentiates businesses whose initiatives succeed from those whose initiatives fail, hinges on the organisations’ ability to execute. Full stop! The most brilliant strategies and the most brilliant opportunities cannot succeed if they cannot be executed. The traditional response from senior leaders too often sounds like "penguins could fly if they only tried hard enough!"

What this book suggest is a "ReM Score", a single score that would allow leaders to accept or reject a strategic opportunity based solely on this measure. The idea of a single measure being such a valued determinant, has precedence in many contexts. American students’ entry to universities is based on the SAT score, and lenders use the FICO score to determine a would-be borrower’s ability to repay. While clearly not a perfect way to make decisions, it is efficient in that it avoids having to go through thousands of CV’s by whittling the process down to the few with the highest SAT scores.

Being able to say: "This is a really exciting proposition! However, our capacity to execute it at the moment, precludes us from getting involved," will save you time, and save you money. Penguins can’t fly just because you wish they could.

One could say about a qualified candidate: "I don’t think we should hire this person. I get a sense he won’t fit in." However, better would be being able to say: "I know he won’t fit in, and here is the data to prove it."  

Responsibly accepting to take on a strategic opportunity is no different, but what has been missing is a true metric.

The author believes his ‘ReM Score’ is such a metric. However, the book does not explain how to develop this metric. (Could the purpose of that omission be to tease the reader into contacting the author and engaging him to do it for you?)

What the book does do is present the 14 domains that make up the metric. These domains are not based on original research by Castro: that would have been extraordinarily difficult, or superficial and unreliable. Rather, Castro has derived the domains from the analysis of a wide number of quality research papers. I will share just 7 of the 14 domains to give a sense of what is being suggested.

Alignment

The first domain is ‘Alignment’, comprised of 3 relevant issues. Is this opportunity aligned to our stated strategy? Answering ‘not really, but it is a great idea!’ is likely to derail other activities in the business if it is pursued.

Similarly, if it is not aligned to the current business culture, its chance of success is limited. A culture at the most superficial level is how we do things around here. For example: We are cowboys, and this requires a way of doing things more like a group of actuaries.

And of course, the opportunity must be aligned to the market’s need.

Other factors

The state of your domains is a prerequisite for being able to take on a new initiative with confidence. Knowing this should lead one to attend to the domain weaknesses in order to be able to take on new initiatives in the future.

How would you rate your ‘Management’? Do you have someone to lead the initiative, and who then would lead what she is currently leading? Does this person have the emotional intelligence to lead the team this initiative would require?

The ‘Technical Environment’ domain is relevant not only to a new technology opportunity. Technology is so essential today (and growing) that not having a technology infrastructure that can absorb an initiative of this kind, is grounds for rejecting the opportunity.

The ‘Priorities’ domain focuses on your financial needs and will allow you to measure whether this opportunity is significant enough a financial priority to be adopted. Again, this may alert you to the need to sort out this domain for the future.

When entertaining the new initiative, has the ‘Stakeholders’ domain been reckoned with?  Have you included everyone who needs to be included? Preparing a list of stakeholders in advance will obviate the danger that could result from not including someone relevant.

Employees of a business have many differing levels of understanding of how and why the business works as it does. The domain of ‘Business Process and Rules Maturity’ addresses this often-overlooked arena. In many businesses too many people lack a deep understanding of the background to rules and processes, and this can become a major hindrance when attempting to implement an initiative.

And a last example of the domains is ‘Business Capabilities’, an obvious domain, more frequently neglected than addressed. A new initiative is often an addition to the workload of a business unit that is probably already at 100% functional capacity. Can it really handle the new volume of work that will be required?

The other 7 domains are: Technology Capability, Governance, Decision Making, Subject Matter Understanding, Organisational Adaptability, Criticality, and Vision

The call is "to measure these domains one initiative at a time, one project at a time, and address each issue it reveals before moving forward." This will enable you to identify what is required; the obstacles in your business that would need to be removed; and whether you have the money to do what is necessary.

The value of this book lies in this message: there don’t have to be hidden vulnerabilities that will surprise you, trip you up, or slow you down. It would be useful to develop a scoring system for your business so that you are aware of your strengths and vulnerabilities.

"All of (the information and) insight already exists inside the company. You just have to harvest it," the author explains. But the harvesting will require effort. Bringing all those efforts into a single score that should be improving over time, is a great technique for getting your company into shape for execution.

Ideas are plentiful. The ability to execute well is a very, very rare skill. Piling energy into improving your execution score is well worth the effort. Alex Castro’s technique is a solid way to go as it is based on reliable research.

Readability         Light --+-- Serious

Insights              High -+--- Low

Practical              High --+-- Low

*Ian Mann of Gateways consults internationally on strategy and implementation and is the author of ‘Strategy that Works’ and ‘The Executive Update.’ Views expressed are his own.

strategy  |  decision-making  |  creativity
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