In an ever-changing global environment, businesses quickly become uncompetitive or inefficient when operating with a strategy and executive team established to address yesterday’s requirements. Faced with a decline in sales, increasing costs or stagnancy, an organisation has to review its strategy and the suitability of its leadership team to address future challenges. A rush to inject new blood, with fresh ideas, and to strive for a rapid turnaround of a corporation’s position is understandable but short-term strategy, even short-term success, can over focus on the ‘here and now’ and place too much value on different, radical thinking. Without appropriate consideration to the longer-term, a bleak outcome may result.
So how can a sluggish, deteriorating business safely appoint – and follow the advice of – a short-term strategist, without jeopardising their long-term success?
Short-term strategy characteristics
When an organisation commissions a new strategist, for the prime purpose of quickly turning-round its fortunes, the ensuing product is likely to be a revolutionary short-term strategy, characterised by so called ‘quick wins’ and optimism.
In a restricted timeframe only a limited amount can be done to positively affect the quality and efficiency of delivery. Pressure can be applied to the work force to deliver more, quicker, but in general focusing on improving the health of a company’s order book is a more realistic target for private firms. Achieving new sales also brings the benefit of a chance to re-define what an organisation delivers (within reasonable bounds). This allows a strategist to broaden his thinking, offering wider scope, and hence potentially greater success. In the public sector, short-term strategy typically comprises the definition of benefits that can be realised in the future – through roll-out of more advanced systems and work practices.
Transformational strategy frequently involves big ideas, with a preference for pursuing opportunities that can generate the largest wins. These, while immediately impacting an order book or supporting the promise of major efficiency gains, inevitably involve significant investment. At the same time, the probability of achieving a successful outcome reduces as the scale and diversity of proposals escalates. To create exciting fresh possibilities, the net will have been cast further a field, drawing in options less aligned with existing skills and corporate track record. This may mean chasing atypical sales prospects or introducing ‘cutting edge’ innovative technologies. Some degree of movement away from current customers and accepted capabilities is exactly what a healthy redesigned strategy requires, but the further the change in direction of travel, the greater the risk to subsequent delivery.
Following an agenda of adopting remodelled work methods or bidding for large scale, less familiar work – with no time for re-skilling or re-focusing the existing work force – an organisation has little choice other than to take on new permanent or temporary proven personnel to plug the gap. Such a policy, driven out of necessity, can become the beginnings of a two-tier staffing model, where existing (lower salaried) workers are concentrated on delivery, while expensive recent hires take on key roles aligned with a recently revised corporate direction.
When there is a desire to see improvements within twelve months – in profit and order book, or efficiency and customer satisfaction – a new recruit is often chosen for the recovery job. The benefits of this path are clear: fresh, uncontaminated thinking. An executive, brought in from outside, can transform a strategy, free from any misgivings or preconceptions regarding a business’s abilities.
While anyone tasked with revitalisation rightly seeks to extend competencies and widen an enterprise’s offerings, an outside hire will almost certainly push an organisation, both knowingly and unintentionally, further towards previously unexplored territories. Unintended repositioning is the consequence of a simple lack of understanding of the workforce and what they are actually capable of delivering. A new strategist usually spends little time on corporate familiarisation: he was, after all, taken on specifically to lay aside the old. Funds are available for indulging in prospective opportunities, when a need for investment to support more modern, more expansive new thinking is recognised.
To bring about rapid results, short-term strategy is often characterised by its disconnection from much of the business that it aims to ultimately make better. Energy is faced outwards, in the pursuit of a strengthened reputation. Existing delivery continues, largely unaffected by the potentially significant change that a revised strategy, if successful, will bring about. And a probable shift in leadership style passes unnoticed; time pressures and outward focus are hall-marks of transactional leadership and the associated hard-skills environment.
Long-term strategy contrasts
In contrast to its short-term equivalent, long-term strategy builds on evolution, rather than revolution. Heavy investments in implementing state-of-the-art IT systems and acquiring new work and fresh talent cannot be maintained over long periods. Therefore long-term strategy seeks to eek out funds by making greatest use of what already exists – workers, processes, systems, partners, customers and suppliers – and by ensuring investment risks are minimised.
At first glance a long-term strategy appears inwardly focused, operating to progressively change an organisation’s culture and capabilities such that they align with a more efficient, effective and marketable forward pathway. However there is a paradox: when spanning a more extensive timeframe, external factors beyond the control of a business have more occasions to change. Thus the long-term strategist’s job is made more difficult by the need to predict future outside changes and to accommodate these predictions within a sufficiently flexible strategy and change plan. None of these complexities confront the short-term strategist, who has the luxury of dealing with a more static environment, for which changes in the relevant time period can be read from the headlines of a newspaper.
For private companies, where long-term strategy has to address both sales and delivery – order book and profit – account management provides a valuable tool. Through effective account management, steady low-risk growth can be achieved year-on-year. New sales are built out of good delivery – cross-selling between accounts and penetrating the full breadth and depth of each client base. Furthermore products and skills developed for one customer become collateral – evidence of proven ability – with which to access and win over new clients in similar marketplaces. In these scenarios selling is clearly best undertaken by the existing workforce, precluding the requirement for expensive new hires to take on sales roles. Building on established successes in this way, moving across markets in small incremental steps, takes time to reach a desired goal, but it reduces risk and investment to a minimum, avoiding the ‘boom and bust’ dangers of much short-term strategy.
In the public sector the emphasis is on generating efficiency savings whilst maintaining – indeed increasing – customer satisfaction. Although it is relatively easy to reduce staff numbers in the short-term, unless improved business processes and systems are implemented – and their use fully embedded – the retained smaller workforce will be unable to deliver baseline services, let alone address rising needs. Well thought through changes to operating methods have to be designed and embraced, to ensure ongoing ability to meet citizens’ and government expectations.
A long-term strategist is judged by the holistic results of his endeavours. Faced with so many demands, but with the benefit of more time in which to succeed, the long-term strategist wisely turns to transformational leadership as his basic tool. Time, coupled with the transformational style – which is perceived as collegiate – provides the prospect of reshaping and redirecting an existing workforce on to a better strategic direction. Where a situation allows, re-skilling is a significantly cheaper option than recruiting, retaining wide-scale motivation and a ‘one organisation’ culture and image.
Relationship building both internally and externally is a cornerstone of long term strategy, increasing the probability of a successful outcome. While internally such personal commitment is rewarded by the retention of a motivated, directed workforce at relatively low cost, externally it creates trust and shapes customers’ thinking, keeping opposition and challenges at bay.
Thus, the simple time-scale difference between short-term and long-term strategy produces quite distinct variations in defining characteristics: short-term strategy is typically disjoint from what exists and opportunistic; long-term strategy is inclusive, evolving through small incremental steps.
Dangers of short-term plans to the long-term
Short-term strategic plans are a danger to the longer term when they disregard, and hence misalign with, too much of what already exists: work-force, skills, culture, systems, marketplace perceptions. If the messages within and outside an organisation become confused, then workers lose motivation and patrons become uneasy. Clients turn elsewhere – where options exist – to companies that project a more consistent, all-embracing profile; in single-provider situations – which covers the majority of public sector services – ‘mixed messages’ erode customer confidence and trust, leading to complaints and spreading scepticism.
A workforce that feels unappreciated and uninformed, as a consequence of the imposition of a new short-term plan to which it has not yet bought-in, is a serious threat to any business’s future. While some workers can be replaced, most are necessary for ongoing operations but, without the right skills and enthusiasm, effective delivery simply doesn’t happen. And if customers see a drop in the quality or timeliness of supplied work or services, they won’t remain as customers for any longer than they have to. New contracts and partnerships are placed elsewhere. Alternative goods are purchased. An establishment’s reputation can be dented. Unwelcome media criticism broadcasts the concerns of a few to a much wider audience. Such a situation couldn’t be a worse starting point for implementing long-term strategy, with its reliance on healthy external relationships and a committed workforce.
The apparent blessings of new orders for commercial firms, successfully won through the implementation of short-term strategy, can unfortunately bring their own difficulties. If a company was mis-sold – for example promised skills or services don’t exist – then the sizable investment involved in winning work will have to be followed by significant investment in delivery – leaving even less funding for the years ahead. And what if, as is possibly the case, sufficient allowance wasn’t built into the price of the new work to cover for deficiencies in ability to deliver?
Organisations too often rush into the set up of new delivery models – such as outsourcing and off-shoring – on the promise of notable cost savings. In reality, the driver for these ventures may well be the perceived opportunity to offload problems which have become unmanageable. But without good internal contract negotiation and management capabilities, a problem transferred to a third party simply becomes a bigger and more expensive threat in the future.
The wider the gap between a new corporate direction set by a short-term strategist and the existing skills and culture, the greater the potential for short-term policies to adversely affect the long-term; original workers and customers disengage and investment funds are over-stretched. Of course the short-term strategy may be so successful that an organisation is re-invented, tearing up its long-term plans and rewriting them, but with short-term thinking inevitably carrying high risks, the need for a reliable fallback position is strong. Jeopardising a long-term strategy for the sake of experimenting with a radical new short-term strategy could prove one risk too far.
Acquiring the best new strategist and an optimum strategy
Having taken the decision to work with a new strategist, to improve short-term success, an organisation can avoid longer term damage by careful selection and on-boarding of the critical new appointee and his strategic plans.
Selection – Finding a good strategist is a major hurdle for any business. Essential qualities include clear objective thinking and outstanding analytical skills. Crucial knowledge includes a thorough understanding of relevant customer bases, client and stakeholder expectations and alternative suppliers. These competencies must be coupled with a full appreciation of impacting factors, their likely changing profile and subsequent effects over time. While calm detachment personifies the short-term strategist, more empathy and passionate involvement are required from the long-term strategist, which complicates the search for someone capable of delivering both quick and lasting success.
Given the demanding profile of a strategist, not unsurprisingly they are in limited supply. It is thus very likely that an external recruitment will be necessary. Selecting a candidate based on a proven track-record in both short and long-term strategy setting is almost certainly wishful thinking; the odds on finding such a prize are too low. By nature the short-term strategist rarely stays around. His natural thirst for new stimulus isn’t satisfied by lengthy appointments. Hence, though a company should be able to verify that candidates possess superior short-term strategic planning expertise, assessing whether these skills are good for periods beyond twelve months is far more difficult. Yet, with short-term strategy such a potential threat to the long-term, appraising a contender’s understanding of the issues, and ability to work flexibly with them, is paramount.
Incentives – Without the benefit of proven enduring achievements as a selection tool, an organisation has little option other than to choose the best short-term strategist who is judged to have greatest potential overall – and then to offer appropriate incentives to support a successful conclusion. Influencing behaviours through generous, appropriately targeted bonuses is important for ensuring full commitment to the difficulty of balancing immediate and future needs. Rewards must focus on a business’s health three years ahead, not on instant successes.
However, with good strategists in such high demand, remuneration from day one has to be excellent. Furthermore, with the formulation of new strategy likely to be seen by a strategist as the most satisfying use of his intellectual skills, rather than the ongoing implementation of his plans, inclination to move on is probably high. Countering this tendency through financial compensation alone may not prove easy but, if the selection process identified a candidate on the verge of considering a wider, upwards career path, beyond strategy development to true leadership, then the right incentives ought to make the difference.
Requirements setting – It is vital to be absolutely clear what is required from a new strategy, by when, such as percentage increase in growth, profit, efficiency gains or customer satisfaction – and what constraints must be accommodated, like investment levels year-on-year. If selecting and incentivising have gone well, then the new recruit has the means to reshape an organisation’s future and, being a focused planner, he will aim to deliver exactly what has been asked for. Setting clear, high-level corporate goals is all important.
There is often the temptation to place too many constraints – retaining particular services, customers or cultural elements, providing for specific markets or needs, desiring a certain company image – but each constraint restricts the options available, impeding ‘blue skies’ thinking. On the one hand this could prevent the development of a strategy that is too revolutionary, and hence a possible threat, while on the other hand it may preclude choices, which though radical, present exactly the impetus needed. Requirement setting isn’t easy, but with a good strategist able to take a business to a defined destination, it is imperative directors know where they want to end up.
Corporate familiarisation – If the new strategist is an external hire, his belief that he knows and understands the organisation that he has joined is likely to be flawed. He’ll carry preconceived ideas, which need to be dispelled. Even a new internal appointee should refresh his perceptions. Rather than jump straight into the task at hand, holding back a strategist’s thinking, until he really appreciates the firm he’s working for, will certainly pay dividends in time. Corporate familiarity needs to embrace: the present strategy – its strengths and weaknesses; what a business currently does; why and how this is done; opportunities and restrictions arising from existing culture; how all these factors have a bearing on recent success or the lack of it.
The greatest threat of a new strategist to an organisation, particularly to the long-term, is that he creates a strategy for another enterprise, instead of the one he’s working for. He will make assumptions, so directors must ensure these are the right ones. By nature an optimist and an opportunist – in part that is why he was selected – directors have to be certain that betting is with the right chips, at the right odds. Senior managers have a duty to make sure their actual organisation features prominently in the strategist thinking, such that departures from existing norms are deliberate and planned, not accidental.
Strategy verification – Fully conversant with a business’s objectives and current situation, a new strategist is equipped to formulate an appropriate strategy. Questioning is then vital: what, why, how. Is the required investment affordable – short, medium and long term – calculated on the basis of best and worst case costs and payback? What are the risks? Has the strategist undertaken a full risk assessment himself, and built mitigation activities and costs into the plans? Does this risk assessment stand up to inspection? Are the strategy’s weaknesses fully understood? Why will this strategy succeed and provide turnaround, while previous ones did not? What underpinning assumptions have been made? Are these reasonable?
And the all important question: have both the short and long-term been accommodated? Will short-term actions adversely impact the long-term? If so, is this recognised, necessary and accounted for sufficiently? – not forgetting the softer aspects, such as the effects on the workforce of re-skilling, new hires, a change in direction and a possible modification of culture.
Strategist review – So, if the new strategy holds up to review, what of the new strategist? He should move seamlessly into the role of strategic leader, implementing the strategy. No one is better placed for the task. But a different set of behaviours define a good leader – inspiring, persuasive, supportive and resolute. Soft skills gain importance when transforming a business, through the adoption of a changed strategic direction.
Hopefully the careful selection process found a candidate capable of demonstrating leadership qualities. But, if doubts have arisen with time, then it may be necessary to provide coaching or further incentives to strengthen responsibility for strategy implementation. From top to bottom, directors to workers, an organisation must be convinced that a strategist truly believes in his own plans, so that they too can buy-in. Nothing demonstrates this belief more than lasting personal loyalty to an establishment.
Short-term implementation – The progress of strategy implementation needs to be continually monitored, particularly with regard to the success of delivering planned corporate outcomes. Close scrutiny is required of the impact on delivery, customer satisfaction, the work force and perceptions of an enterprise – by regulators and partners in the public sector, by the marketplace and competitors in the private sector. These shed light on the all important likely effect of changes on the long-term. The strategy will need refinement if risks to success increase.
Long-term implementation – Ongoing organisational success should be assured, if all the above steps were followed. The long-term was planned for right from the outset, when the new strategist was chosen, and remained clearly in the frame throughout.
Short-term strategist sustaining success
Left to his own devices, a strategist who naturally shoots for quick results frequently pays insufficient attention to how his short-range plans can adversely impact the longer term. However, offered suitably structured incentives, a carefully selected short-term strategist can be persuaded to take on the challenge of achieving good results year-on-year. His success will depend on his ability to adopt the wider spectrum of thinking and behaviours necessary, when addressing the varying and opposing agendas faced by any modern business.
© 2011 – 2014, Sandy Arpino. All rights reserved.