The Art and Discipline of Strategic Leadership

Published by Soundview Executive Book Summaries, P.O. Box 1053, Concordville, Pennsylvania 19331 USA©2003 Soundview Executive Book Summaries • All rights reserved. Reproduction in whole or part is prohibited.

Drive Breakthrough Strategic Thinking ThroughoutEvery Level of Your Organization

THE ART ANDDISCIPLINEOF STRATEGICLEADERSHIPTHE SUMMARY IN BRIEF

In the 21st Century it is more critical than ever that CEOs provideclear strategic leadership. In the ever-changing business landscape leadersmust master both the art of strategy creation and formulation and the disci-pline of strategy implementation and review. Mike Freedman presents theKepner-Tregoe five-phase model for strategy formulation and implementa-tion to show how your company can develop a strategic vision and actionplan, communicate the vision, implement it, and monitor it to ensure ongo-ing success.

Concentrated Knowledge™ for the Busy Executive • www.summary.com Vol. 25, No. 3 (3 parts) Part 2, March 2003 • Order # 25-07

CONTENTSBeyond VisionPage 2

Preparing for StrategicLeadershipPages 2, 3

Phase 1: StrategicIntelligence GatheringAnd AnalysisPage 3

Phase 2: StrategyFormulationPages 3, 4, 5

Phase 3: StrategicMaster ProjectPlanningPages 6, 7

Phase 4: StrategyImplementationPages 7, 8

Phase 5: StrategyMonitoring, Reviewingand UpdatingPage 8

By Mike Freedmanwith Benjamin B. Tregoe

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What You’ll Learn In This Summary✓ How to use The Enterprise Model to examine your company’s external

and internal environments before embarking on a strategic journey.✓ How to gather and analyze the appropriate strategic intelligence to

direct your company to a sound strategy.✓ How to formulate a strategic profile using analysis, time frame, basic

beliefs and your company’s Driving Force.✓How to determine whether your company is ready for implementa-

tion.✓How to develop a strategic Master Project Plan for implementation of

the strategic vision.✓ How to monitor and update your formulation and implementation

process so that your strategy remains evergreen.

Beyond Vision Everyone throws around the word strategy, but what

does it really mean? Freedman defines it as the frame-work of choices that determine the nature and direc-tion of an organization.

A Framework establishes the boundaries and scopeof the business activity.

The Choices are about the products and services provid-ed, the markets served, and the key capabilities needed.

The Nature of the organization is what exemplifies itand describes its character. Like Intel’s “chips” andMcDonald’s “fast food chains,” nature gives strategiccoherence to decision-making and communications.

Direction is the organization’s future course deter-mined by choices about future products and services,future customers and future markets.

Also understand what strategy is not. A decision is notstrategic simply because it is long-term, or involves amulti-million dollar expenditure. These decisions can bemade within the strategic framework, but only decisionsthat change the framework are strategic.

Critical AspectsThere are three critical aspects to a strategy:● A strategic vision must be based on facts,

informed assumptions and the best-possible what-ifthinking.

● The vision must be communicated throughout theorganization to clarify and align the role of everystrategically critical player and process.

● The vision must be monitored to ensure continuedstrength, agility and relevance.

Recent strategic thinking has been weakened bydot.com-fueled fear of failure or the desire to appeaseWall Street analysts. When weak strategies fail, someassume strategy is irrelevant or unnecessary. In fact, acompany without a coherent strategy is particularly vul-nerable in these times, as is any company that has aclear direction but poor implementation.

Strategy requires the art of creativity to fashion avision and the discipline to direct thought processes andexecution. Discipline turns vision into reality.Executives must proactively create a strategy instead of

succumbing to a default strategy that was inherited,stumbled into, or borrowed from a competitor. Lack of aclear strategy subjects your organization to competitor,shareholder and employee threats. ■

Preparing for StrategicLeadershipHow Does Strategy Begin?

All strategic leadership starts with the chief executive,and in order to succeed, he or she must understand theplaying field. The Enterprise Model developed by AlanBrache in How Organizations Work: Taking a HolisticApproach to Enterprise Health presents a full picture ofthe organization and the impacts on its strategy.[Editor’s note: see Soundview Summary #24-17, HowOrganizations Work.]

The model demonstrates the organization’s place inthe value chain, external and internal influences, and itsleadership capabilities before developing a strategy.Once the strategy is set, success relies on the issue reso-lution systems that will implement the strategy. A chiefexecutive must fully understand each area and how itwill affect and be affected by strategy.

The Strategy ProcessToday’s volatile world and marketplace require a

THE ART AND DISCIPLINE OF STRATEGIC LEADERSHIPby Mike Freedman with Benjamin B. Tregoe

— THE COMPLETE SUMMARY

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Published by Soundview Executive Book Summaries (ISSN 0747-2196), P.O. Box 1053, Concordville, PA 19331USA, a division of Concentrated Knowledge Corporation. Published monthly. Subscriptions: $195 per year in U.S.,Canada & Mexico, and $275 to all other countries. Periodicals postage paid at Concordville, PA and additional offices.

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CHRISTOPHER G. MURRAY – Editor-in-ChiefGEORGE Y. CLEMENT – Publisher

Soundview Executive Book Summaries®2

(continued on page 3)

The authors: Mike Freedman is president of theworldwide strategy practice of consulting companyKepner-Tregoe, Inc. Benjamin B. Tregoe is the cofounderof Kepner-Tregoe, Inc.

Adapted by arrangement with The McGraw-HillCompanies, Inc., from THE ART AND DISCIPLINE OFSTRATEGIC LEADERSHIP by Mike Freedman withBenjamin B. Tregoe. Copyright© 2003 by Kepner-Tregoe, Inc. 218 pages. $27.95. ISBN 0-07-141066-X.

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robust process to guide strategy formulation and imple-mentation. To formulate strategy, a CEO should concen-trate on the following issues:

● Strategy is built around the answers to a few vitaland specific questions, not from the masses of datatypically drawn up by consultants. Executives shouldknow the answers to these questions; they just have tobe honest and thoughtful about them.

● Process-based questions yield better strategythan narrow, content-driven questions. Consider theutility of these content questions. When should we enterthe sub-Saharan marketplace? Which of those countriesshould we enter first?

Now consider process questions. Should we pursuegrowth through entering new geographic markets inAfrica? What criteria should we use for selecting newmarkets? Does the sub-Saharan market meet our criteriabetter than other alternatives? The second group ofquestions uses a rational process to resolve the issuethrough a logical sequence of gathering, organizing andanalyzing information.

● The skill and commitment of the top team is keyto the success of strategy formulation and implementa-tion. The rational process and tough questions alloweveryone to use the same language and disengage frompersonal agendas and politics.

The Five PhasesIn addition to the considerations above, there are five

phases of strategy formulation and implementationprocesses that will be explored in the rest of the summa-ry. These five phases are:

1. Strategic Intelligence Gathering and Analysis.2. Strategy Formulation.3. Strategic Master Project Planning.4. Strategy Implementation.5. Strategy Monitoring, Reviewing and Updating. ■

Phase 1: Strategic IntelligenceGathering and Analysis

Executives often gather reams of data to help formu-late a strategy, but the data are only representative of thepast and present. They say nothing about the future.With so much raw data available today, it is difficult todiscern what is relevant and not get sidetracked byminutiae and research for the sake of research. But even

the right data is not useful if you do not use it to makejudgments about the future. You only need enough datato find implications of trends and assumptions foryour own business.

The team must ask universal questions that explain thepast and present and look to the future. Examine broadareas of your external environment that are out of theorganization’s control: trends in the economy, society,government, politics and technology that could affectyour business. Then identify key players in your currentvalue chain: your major customers, purchasers andend users. What trends are likely in your supplier base?What is the overall competitive scenario in the struc-ture of the industry’s value chain? What are the essentialrequirements for success for any organization in theindustry, and how do you measure up?

Find other clues to the future by looking at your com-pany’s internal environment: When have you been suc-cessful or unsuccessful with products and services,customers or end users, or in various geographic mar-kets? What was the cause? Questions about past internalstrategy processes will also help: What basic beliefs orvalues affect organizational culture and strategic behav-ior? What is your strategic history? What are theexpectations of your various stakeholders? What areexpectations for growth and return? How well haveyou implemented previous strategies, and do yourbusiness plans and annual budgets reflect your strate-gy? Do you have a review process for your strategy?

These questions determine which data are strategical-ly relevant. Your team will now move from informationto judgment to strategic insight. You will develop a setof commonly held assumptions about the external andinternal environments that the company will operate inover its strategic time frame and the implications foryour company. Assumptions, or general knowledge,should be distinguished from implications, which arethe insight into the effect on your organization. Thisprocess is inherently iterative and will take a lot ofwork; however, if done well it will provide a solid foun-dation for the remaining four steps of strategy formula-tion and implementation. ■

Phase 2: Strategy FormulationStrategy formulation begins with the company’s strate-

gic time frame and basic beliefs. Time frame and basicbeliefs will help determine how to guide the organization,define and strengthen your competitive advantage, recog-nize which key capabilities you need, allocate scarceresources, determine direction and scope for growth andnew business, and plan expectations for return and profit.

3

The Art and Discipline of Strategic Leadership — SUMMARY


Preparing for Strategic Leadership(continued from page 2)

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All goals must have an endpoint to create a sense ofurgency for accomplishment. Your time frame shouldbe determined by your individual organization andthe forces that affect it — from macroeconomic trendsto emerging regulatory concerns to your value chain’stimetable. The strategic time frame is not the same asthe time period for long-range planning activities, whichare often arbitrary and determined by accounting andshareholder expectation.

Basic beliefs are deeply held tenets, creeds, convic-tions or persuasions that provide the social cohesionof organizations. They set boundaries for day-to-daydecision-making, reinforce strategic unity, and set astandard for performance and accountability. Basicbeliefs must be defined during the strategic intelligencephase and returned to throughout the process. Identifybeliefs by considering where they came from, how theyare articulated and demonstrated, how new beliefsbecome implemented and accepted, and the desirednature of your company’s relationship with its stake-holders. Beliefs are meaningless unless they supportyour strategy. They are not just nice to have, theyexplain how an organization conducts its everyday busi-ness, and they align communications, culture and prac-tices with strategic vision.

Driving Force Freedman coined the phrase Driving Force with his

colleagues at Kepner-Tregoe. It is “the primary deter-minant of the products and services an organizationwill and will not offer and the markets (customers,consumers and geographies) it will and will notserve.” It expresses the essence of what your business isabout. You will need the Driving Force to provide the

focus for your competitive advantage, the scope of yourproducts and markets, key capabilities and communica-tions systems. It is also a filter for new growth opportu-nities and a guide for phasing out non-strategic businessareas. After establishing a time frame and basic beliefs,you will brainstorm alternative strategic visions for con-sideration based on one of the eight Driving Forces atthe core of all strategies.

Three of the Driving Forces are quite common.Companies with a Products/Services Offered DrivingForce provide a limited range of products to an unlimit-ed market, such as Rolex and Toys R Us. MarketsServed companies provide an expanding group of prod-ucts to a specific market, such as Dunhil and Nike.Return/Profit companies, such as General Electric,focus primarily on increasing financial returns.

The other driving forces are Low-Cost Production(eg. commodity companies), Technology (eg. Cisco andGoreTex), Natural Resources (eg. oil companies),Method of Sale/Distribution (eg. express mail deliverycompanies), and Operations Capability (eg. printingand metal fabricating companies).

Choosing the optimum Driving Force for your compa-ny will be one of your most important decisions. It is anintense and demanding job that will determine yourorganization’s competitive advantage and the key capa-


4 Soundview Executive Book Summaries®

Strategy Formulation(continued from page 3)

Overview of Gathering andAnalyzing Strategic Intelligence

1. Gather accurate data, focusing on vital questionsnot masses of information.

2. Distill data into a manageable quantity and iden-tify common themes.

3. Analyze and agree on the meaning of the infor-mation presented.

4. Make judgments based on environmentalassumptions and implications.

5. Analyze potential problems and opportunities. 6. Evaluate the validity of assumptions and implica-

tions.

Finding the Driving ForceOf Hallmark International

Sales for Hallmark International, the half-billion dol-lar global subsidiary of Hallmark Cards, Inc. wereslumping. One reason was that the global companykept trying to emulate the driving force of its U.S. par-ent, which had the characteristics of a Market Servedorganization — it offered its mostly female, middleaged, middle of the road clientele greeting cards, tele-vision miniseries, inspirational posters, a chain of por-trait studios in the malls and even the Crayola crayons.

Hallmark International tried to base its strategy onthe Markets Served Driving Force, but its diverse,multi-national client base didn’t respond. The Methodof Distribution Driving Force, based on the success ofthe U.S. parent’s distribution network, was also con-sidered — but company executives thought HallmarkCard’s success would be difficult to emulate.

Finally, Hallmark International settled on theProducts Offered Driving Force, which focused ongreeting cards and very closely related products. Thedecision played to Hallmark International’s strength:meeting customer needs for greetings, expressingcare and building relationships.


bilities required to capitalize on it. Your team mustdetermine a ranked set of objectives for the companyand use a well-defined process to develop and articulatefuture strategic visions for several Driving Forces.Discuss how well each Driving Force fits the prioritizedgoals, and choose the right one to propel your companytoward unity and purpose.

Completing the Roadmap: Thrust and PrioritiesNow use the Driving Force to determine an actionable

plan to drive the company’s product and marketmomentum. Your team must envision its future businessin terms of the thrust and priorities for growth and newbusiness, and then outline specific products to beoffered and markets to be served.

Companies can rarely venture into entirely new prod-ucts and new markets at the same time and still main-tain their Driving Forces (see box at right). The excep-tion is the Return/Profit driven company where the onlyconstraints are financial. A Products Offered company,such as a carmaker, will generally remain with currentor modified products instead of completely new prod-ucts, but may enter new markets. A Markets Servedcompany, such as Playboy, will offer modified and newproducts, but stay in its current market. If there is a rela-tively risk-free and potentially profitable way to head inboth directions, the strategy team should make it clearthat this venture is outside the core business. Fullyexploiting the current product in the current market isoften overlooked in pursuit of more exciting options, butit can be an excellent source of growth.

After clarifying the company’s products and markets,the team establishes the financial goals it expects fromthe strategy. Only a purely Return/Profit company hasfinancial goals as its prime motive behind strategy. Forother companies, financial success should be an outputof strategy, not a motivator. Financial goals should beexpressed through specific parameters like ROI, profittargets, cash flow requirements, as well as through gen-eral parameters like increased revenue and improvedyear over year performance. These are not financialplans or projections, but goals describing an ideal future.

The Product/Market MatrixNow it is time to create the Product/Market Matrix as a

roadmap to achieve the strategic vision. This matrix (seeexample on following page) is a robust tool that allowsyou to manage strategy by determining relative emphasisof each product/market combination and showing youhow to allocate scarce resources to exploit competitiveadvantage. There are four steps to create the matrix.

● Segment Products and Markets — Use the

Driving Force to segment products and markets intostrategic categories that share a natural synergy. Placeall current and potential products and markets that areconsistent with the strategy along the two axes.

● Determine Criteria for Emphasis — Using previ-ous strategic intelligence gathering, Driving Force, com-petitive advantage and key capabilities, basic beliefs,and initial financial targets, establish criteria for assess-ing the relative role for each product/market combina-tion, or cell in the Matrix.

● Assess Each Cell — Use the established criteria toconduct a small-scale decision analysis on the futureactivity for each cell that reflects the contribution to thestrategic intent. Determine the future degree of empha-sis (Low, Medium, High) and the type of emphasis(Develop, Sustain, Opportunistic, Monitor, Explore,Phase Down) needed to achieve the ideal future.

● Review Matrix and Strategy — This is an itera-tive process, and most companies find they have toomany “High” and “Develop” types of emphasis cells.The team must review and rework to obtain a real actionplan rather than an unobtainable wish list.

At this point the team will have gathered so muchinformation, it is time to stop and articulate a strategicprofile using all of the information, judgments andimplications developed so far. It will allow the team toeffectively get to the nitty-gritty of implementation. TheCEO must also take time to consider the team and howit is working. Do roles have to be changed? Does theteam need more support? ■


Soundview Executive Book Summaries® 5

A Every organization has current markets and products. Companies should seek to maximize opportunities in this area before venturing further.

B Most organizations will pursue current and modified products, and/or current and extended markets, early in the strategic period.

C Many organizations will eventually aspire to address either products/ services entirely new to them, or entirely new markets.

D Few organizations will be able to take new products to new markets.

Thrust for Growth and New Business: PrioritiesEach strategic Rubicon separates current and modified products from entirely new products, and current

and extended markets from entirely new markets. Determining the organization’s exact thrust for growthand new business lies in the priority assigned to each of the four to six boxes the company will pursue.

Products/Services

Mar

kets

Entirely NewModifiedCurrent

Entir

ely

New

Curr

ent

Exte

nded

A B C

BB C

CC D

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Strategy Formulation(continued from page 4)

Phase 3: Strategic MasterProject Planning

Reluctance or incompetence in crafting a process forimplementing strategic change is the most reliable pre-dictor of failure. Every corner of the organization mustchange, so strategy implementation should be built intothe work of the entire organization. The scheduling,resourcing and sequencing of project management arefamiliar to us all, but the Strategic Master Project Planhas the following distinguishing characteristics:

● All projects in the Plan flow directly from thestrategy.

● Plan includes a considerable number of diverseprojects.

● Plan requires the disciplined prioritization of ini-tiatives.

● There is enterprise-wide adoption of common pro-ject management language and methodology.

● Plan includes disciplined approach to project man-agement methodology.

● Success depends on discipline, commitment andactive support of entire top team.

The purpose of the Strategic Master Project Plan is toassess the necessary strategic initiatives, integrate theexisting operation projects, identify which projects mustbe accomplished first, and create an overall system thatkeeps implementation in line with the strategic vision.

The projects that address the critical issues discussedabove are of highest priority. The team then looks at thestrategic profile and determines the difference betweenthe organization’s current state and the ideal. The strate-gic profile developed in Phase 2 consists of theProduct/Market Matrix; competitive advantage; keycapabilities; basic beliefs; strategic intelligence gaps;functional, divisional or business unit strategies; andpotential mergers, acquisitions or joint ventures.Existing key projects such as moving headquarters orupgrading a telephone system must be considered in theway they affect the organization’s ability to implementstrategy. Finally, the top team should use the EnterpriseModel as a diagnostic tool for determining affect ofstrategy on the organization as a whole. For each com-ponent of the Model ask, “How do we compare with ourstrategy ideal for this component?”

By drawing on these four sources, the top team gath-ers a potential pool of projects for the Strategic MasterProject Plan, and then prioritizes them based on impactand urgency of their results. By using the strategic crite-ria they develop an optimal portfolio of projects that canbe accomplished within the constraints of availableresources. As organizational capacity and resourcesbecome available, more projects can be added to theportfolio.

Once the portfolio is determined, the top team must




Example of a Product/Market MatrixGo

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ment

Pub

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R

etail

ers

KEY

Degree of Emphasis

H = HighM = MediumL = LowN/A = Not applicable, e.g., lipstick to menO = Choose not to pursue at this time

future X

current

Type of EmphasisD = DevelopS = Sustain current effortOPP = OpportunisticM = MonitorE = ExplorePD = Phase Down

Curre

nt M

arke

ts

Supermarkets

Specialty

Corner Shops

Chains

Independents

EducationalEstablishments

Hospitals

RetirementHomes

Current Products

Tota

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Custo

mer

Emph

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Total OverallProduct Emphasis

ModifiedProducts

Coffee,Tea,Milk

EntirelyNew

ProductsNon-

beverage,Nuts, Chips,

Pretzels,Cookies

Alcohol Sodas Juices

Beer Wine SpiritsCoke

Clones Others Organic Standard

H DM

H SH

HH

N/A

HH

N/A

L SL

L SL

HH

HM

H DM

M DL

N/A N/A

N/A N/A

L PDM

L PDM

M SM

M SM

L SL

L SL

L SL

L SL

L SL

L SL

H DL

H DM

H DM

M PDH

M PDH

M DL

M DL

L SL

L SL

L SL

O PDL

L SL

L PDM

L PDM

M SM

M SM

MH

LM

LL

L SL

LM

M DO

LL

L DO

LL

L DO

L DO

L PDM

L PDM

L PDM

L PDM

L PDM

LH

H DL

H DL

HL

LM

O EO

L DO

MO

LO

L DO

L DO

L DO

L DO

O EO

O EO

MO

O EO

O EO

M DO

M DO

L EO

H DM

M DH

HM

MM

LL

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ML

ML

set the foundation for the best possible execution.They must choose a single systematic process thatdefines project management discipline. It needsrobust tools for resource planning, scheduling andmonitoring, and should also make time for the peopleside of project management, including communica-tion, motivation, and time management and balance.The strategy formulation team must have its ownmanagement structure with the systems to support it,including stewardship and support from the top teamand a well-funded support office dedicated to theimplementation. The top team also devotes ongoingeffort to monitor and manage the success of theoverall Plan, including reviewing the portfolio andmanaging employee behavior. ■

Phase 4: StrategyImplementationAligning the Infrastructure

The fourth strategic phase is implementation. Thoughall Strategic Master Project Plans are different, they dohave some common traits that are so important that theymust be regularly reviewed and realigned with thestrategic intent when necessary.

Organization Structure: When approaching imple-mentation, first examine the current structure. If it pro-motes implementation, leave it alone. If it doesn’t, use

the Driving Force to suggest a different structure. AProducts Offered company will most likely consider astructure reflecting its major product categories. Mostimportantly, the selection criteria for structure must berooted in the strategic vision.

Strategic Information Management: Companiesexpect their capacity to gather and synthesize informa-tion to play a crucial role in success, but the analysis anddissemination of critical strategic information must bebuilt into the implementation plan. The Driving Forcewill determine the most important strategic informationneeds, such as a Markets Served Driving Force companythat will need data on demographics and related trends.

Complexity: Because CEOs don’t like to say no andcompanies try to be all things to all people, there is a lotof unnecessary complexity in companies. Strategy teamsmust ferret out any organizational complexity that willcripple implementation.

Aligning Strategy, Culture and Performance Ignoring the “soft” or human side of implementation

jeopardizes your strategic goals from the outset. Thereis a direct line of sight from strategy to culture to per-formance, and then on to business results. Freedmanand Tregoe define culture as “the combined effect ofbehaviors, values, heritage, thinking and relation-ships and the way these are embedded in an organi-zation and its performance.”

Culture: To align strategy and culture, leadershipmust address both the explicitly expressed values andbehaviors and the latent elements hidden in the organi-zation’s subconscious, with a focus on those culture ele-ments that have remained unchallenged for years. Basicbeliefs are key to setting strategy, but without leadershipthey don’t define or create a strategic culture.

Performance: Consider the extent to which the strate-gy and its supporting culture are embedded in the wayyour organization directs, manages and rewards its peo-ple? How does your organization produce behavior fromemployees that are directed toward achievement of aspecific goal? How are people rewarded and encouragedto behave? It is also important to align the performancesystem with the strategy, so people are encouraged topursue the strategic dimension of their jobs and receivenegative consequences when they ignore them.

Communicating Strategy Failure to communicate the strategy throughout the

ranks is a death sentence for implementation. There aremany stakeholders involved when a new strategy isimplemented — employees, unions, analysts, sharehold-ers — and all of them have their own biases and precon-ceptions about a new strategy. They will ultimately


7

Strategic Master Project Planning(continued from page 6)

Common Implementation Pitfalls✓ Strategic inertia or not getting started.✓ Lack of stakeholder commitment to the vision.✓ Strategic drift, or not focusing on the destina-

tion.✓ Strategic dilution where things are moving, but

it’s not clear who’s driving.✓ Strategic isolation where things are happening,

but no one communicates.✓ Failure to understand progress or know where

you are on the journey.✓ Initiative fatigue when things are happening,

but nothing gets done.✓ Impatience for immediate change.✓ Not celebrating success and rewarding progress.

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respect a strategy that shows clear direction and purpose,because they will have important roles in its future.

Communicating strategy promotes ownership andgives people a reason to support the implementation.Stakeholders can also be an important feedback sourcewhen they understand the strategy. Communicationtranslates the big-picture vision into specific expecta-tions from individuals and groups, and helps to motivateand get people committed to change. When communica-tion is implemented properly every internal and externalstakeholder will know “what does this mean to me?”Finally, proper communication changes behavior,because strategy informs the processes of setting goals,developing job descriptions, managing projects.

When the top team sets out to communicate the planthey must explain the strategic profile and StrategicMaster Project Plan to the internal or external profession-als who will execute the plan. They must know the natureof each audience and the appropriate message. Forinstance, communication about the company’s thrust forgrowth and business will be communicated differently tomiddle managers, plant workers and investment bankers.

Communications should begin early to quiet rumorsand reassure employees, and the top team should shoul-der the responsibility. When communicating with a spe-cific audience, they should stick together and rememberto communicate face-to-face as much as possible, involvethe supervisor closest to the target audience, listen as wellas talk, skip the dazzle and focus on the message, engagethe audience, and connect every message with an actionor plan to be implemented. People will watch closely forcongruence between actions and words, but if communi-cation is built into the Strategic Master Project and usedeffectively, it is invaluable for driving the changes in cul-ture and individual performance that make implementa-tion possible. ■

Phase 5: Strategy Monitoring,Reviewing and Updating

The final phase of the strategy process asks the topteam to keep the strategy “evergreen” by asking whatcould go differently than anticipated, how will you knowif it occurs, and what will you do when it occurs.

Monitoring: The top team monitors both the continu-ing viability of the strategy and its implementation. Theyreview how well the company is implementing the pro-

jects in the Strategic Master Project Plan. Is strategy dri-ving the decisions made in your company, or are man-agerial “lone rangers” operating independently of strate-gic imperatives? Leadership determines if the environ-mental assumptions made during strategy formulationare still valid, if the company is performing well againstfinancial expectations and other key indicators of strate-gic success. If not, the strategy may not be viable. Thetop team must continually revisit the components of thestrategic profile to make sure they are still applicable.

Renewing: Leadership must consider the implicationsof any identified deviations from the strategy discoveredduring monitoring. The strategy generally needs to bereevaluated when small deviations occur on a regularbasis, or when there is a major deviation. Determine ifthe deviation is the direct result of the strategy ratherthan operations, but avoid blame and finger-pointing. Inthe absence of identifiable deviations, there should be atminimum, an annual review of the strategy.

Sticking to it: It is important to recognize that moni-toring is just as important as strategy formulation andimplementation. Executives may not want to keep upwith monitoring because it is never-ending, and in thecurrent fast-paced business environment it is hard tokeep an evergreen approach, even though it is more crit-ical than ever to have one. Companies should not moni-tor for the sake of monitoring, but so that they can man-age change. Survivor companies adapt quickly tochanges in the business environment if it is necessary tomaintain strategic focus. Successful companies antici-pate change and alter their strategies in advance. World-class companies dictate the nature and pace of change,redefining their industries and even drive the valuechain. The difference between these kinds of companiesis the rigor of their strategy monitoring, reviewing andupdating. ■



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Components of theCommunications Plan

✓ Strategic message✓ Means of testing the listener’s understanding of

the strategic message✓ Understanding of the costs✓ Schedule for releasing information and obtaining

feedback✓ Evidence of top management’s direct involve-

ment✓ Built-in feedback mechanism

Strategy Implementation(continued from page 7)

Documents

The Art and Discipline of Strategic Leadership