How Great Leaders Approach Strategy Formulation

Ben Bradlee, the former Executive Editor of the Washington Post, said,
"you can't make these [critical] decisions without good people around you."

There have been many successful visionary leaders and the academic community studies their strategy formulation processes so we all can mimic their successes. The best all say surround yourself with smart, good people.

Mintzberg, Ahlstand and Lampel in Strategy Safari categorized these leaders approaches into ten schools about strategic thinking. Some approaches are prescriptive with a focus on forecasting, analysis or positioning for the future; others are descriptive, how do strategies emerge (the best of decision makers' styles, the shrewd design of businesses, cultures, power processes); and some schools focus on how a firm reacts to market changes during the life cycle of a business.

The Fundamental Perspective — Position, Adapt or Align

After studying my clients for many years and analyzing the best approaches the academics identified, I have settled on three fundamental perspectives people bring when they formulate strategy: folks tend to focus on either positioning the firm for future profits, on rapidly adapting to customers' needs or on aligning a team to efficiently make the business perform. These perspectives create tensions in the team: pressure to grow, the pressure to innovate, and always, the pressure to control costs.

The strategy formulation process has three fundamental critical success factors that accommodate the tensions and blend the three perspectives: focus on the customer benefit, design a sustainable business process and share assets. Later in the website, we'll describe the best tactics.

As a facilitator, I support leaders who craft an environment where strategy emerges from the informed discussions between the key players who will take responsibility for the implementation. The strategic planning process should prepare the key leaders, should rehearse them, so they act with confidence. People call this alignment.

Studying the future is the only way I know to anticipate it, but the result is often messy, because we just don't predict very well. I had two huge successes, one success in progress and one dismal failure as the leader — I am no longer a believer that with enough study a visionary can predict the future. It is necessary step but without involving other key players in the thought process, the team will not react fast enough or have the patience to know when to wait. The process has to pit the positioners against the adapters against the aligners with an slight edge to the adapters.