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Concentrated Knowledge™ for the Busy Executive • www.summary.com Vol. 25, No.

Vol. 25, No. 3 (3 parts) Part 2, March 2003 • Order # 25-07

FILE: STRATEGIC MANAGEMENT


®

Drive Breakthrough Strategic Thinking Throughout


Every Level of Your Organization

THE ART AND


DISCIPLINE
OF STRATEGIC
By Mike Freedman
with Benjamin B. Tregoe
LEADERSHIP
CONTENTS THE SUMMARY IN BRIEF
In the 21st Century it is more critical than ever that CEOs provide
Beyond Vision
Page 2
clear strategic leadership. In the ever-changing business landscape leaders
must master both the art of strategy creation and formulation and the disci-
Preparing for Strategic pline of strategy implementation and review. Mike Freedman presents the
Leadership Kepner-Tregoe five-phase model for strategy formulation and implementa-
Pages 2, 3 tion to show how your company can develop a strategic vision and action
Phase 1: Strategic plan, communicate the vision, implement it, and monitor it to ensure ongo-
Intelligence Gathering ing success.
And Analysis
Page 3 What You’ll Learn In This Summary
Phase 2: Strategy
Formulation ✓ How to use The Enterprise Model to examine your company’s external
Pages 3, 4, 5
and internal environments before embarking on a strategic journey.
✓ How to gather and analyze the appropriate strategic intelligence to
Phase 3: Strategic
Master Project direct your company to a sound strategy.
Planning ✓ How to formulate a strategic profile using analysis, time frame, basic
Pages 6, 7 beliefs and your company’s Driving Force.
Phase 4: Strategy ✓How to determine whether your company is ready for implementa-
Implementation tion.
Pages 7, 8
✓How to develop a strategic Master Project Plan for implementation of
Phase 5: Strategy the strategic vision.
Monitoring, Reviewing ✓ How to monitor and update your formulation and implementation
and Updating process so that your strategy remains evergreen.
Page 8
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.
THE ART AND DISCIPLINE OF STRATEGIC LEADERSHIP
by Mike Freedman with Benjamin B. Tregoe

— THE COMPLETE SUMMARY

Beyond Vision succumbing to a default strategy that was inherited,


stumbled into, or borrowed from a competitor. Lack of a
Everyone throws around the word strategy, but what
clear strategy subjects your organization to competitor,
does it really mean? Freedman defines it as the frame-
shareholder and employee threats. ■
work of choices that determine the nature and direc-
tion of an organization. For Additional Information on threats of a default strategy,
go to: http://my.summary.com
A Framework establishes the boundaries and scope
of the business activity.
The Choices are about the products and services provid-
ed, the markets served, and the key capabilities needed. Preparing for Strategic
The Nature of the organization is what exemplifies it
and describes its character. Like Intel’s “chips” and
Leadership
McDonald’s “fast food chains,” nature gives strategic How Does Strategy Begin?
coherence to decision-making and communications. All strategic leadership starts with the chief executive,
Direction is the organization’s future course deter- and in order to succeed, he or she must understand the
mined by choices about future products and services, playing field. The Enterprise Model developed by Alan
future customers and future markets. Brache in How Organizations Work: Taking a Holistic
Also understand what strategy is not. A decision is not Approach to Enterprise Health presents a full picture of
strategic simply because it is long-term, or involves a the organization and the impacts on its strategy.
multi-million dollar expenditure. These decisions can be [Editor’s note: see Soundview Summary #24-17, How
made within the strategic framework, but only decisions Organizations Work.]
that change the framework are strategic. The model demonstrates the organization’s place in
the value chain, external and internal influences, and its
Critical Aspects leadership capabilities before developing a strategy.
There are three critical aspects to a strategy: Once the strategy is set, success relies on the issue reso-
● A strategic vision must be based on facts, lution systems that will implement the strategy. A chief
informed assumptions and the best-possible what-if executive must fully understand each area and how it
thinking. will affect and be affected by strategy.
● The vision must be communicated throughout the
The Strategy Process
organization to clarify and align the role of every
strategically critical player and process. Today’s volatile world and marketplace require a
● The vision must be monitored to ensure continued (continued on page 3)
strength, agility and relevance.
Recent strategic thinking has been weakened by The authors: Mike Freedman is president of the
dot.com-fueled fear of failure or the desire to appease worldwide strategy practice of consulting company
Wall Street analysts. When weak strategies fail, some Kepner-Tregoe, Inc. Benjamin B. Tregoe is the cofounder
assume strategy is irrelevant or unnecessary. In fact, a of Kepner-Tregoe, Inc.
company without a coherent strategy is particularly vul- Adapted by arrangement with The McGraw-Hill
Companies, Inc., from THE ART AND DISCIPLINE OF
nerable in these times, as is any company that has a
STRATEGIC LEADERSHIP by Mike Freedman with
clear direction but poor implementation. Benjamin B. Tregoe. Copyright© 2003 by Kepner-
Strategy requires the art of creativity to fashion a Tregoe, Inc. 218 pages. $27.95. ISBN 0-07-141066-X.
vision and the discipline to direct thought processes and
execution. Discipline turns vision into reality.
Executives must proactively create a strategy instead of For Additional Information on the author, go to:
http://my.summary.com

Published by Soundview Executive Book Summaries (ISSN 0747-2196), P.O. Box 1053, Concordville, PA 19331 Soundview
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Soundview Executive Book Summaries.
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2 Soundview Executive Book Summaries ®
The Art and Discipline of Strategic Leadership — SUMMARY
Preparing for Strategic Leadership the right data is not useful if you do not use it to make
(continued from page 2) judgments about the future. You only need enough data
to find implications of trends and assumptions for
robust process to guide strategy formulation and imple- your own business.
mentation. To formulate strategy, a CEO should concen- The team must ask universal questions that explain the
trate on the following issues: past and present and look to the future. Examine broad
● Strategy is built around the answers to a few vital areas of your external environment that are out of the
and specific questions, not from the masses of data organization’s control: trends in the economy, society,
typically drawn up by consultants. Executives should government, politics and technology that could affect
know the answers to these questions; they just have to your business. Then identify key players in your current
be honest and thoughtful about them. value chain: your major customers, purchasers and
● Process-based questions yield better strategy end users. What trends are likely in your supplier base?
than narrow, content-driven questions. Consider the What is the overall competitive scenario in the struc-
utility of these content questions. When should we enter ture of the industry’s value chain? What are the essential
the sub-Saharan marketplace? Which of those countries requirements for success for any organization in the
should we enter first? industry, and how do you measure up?
Now consider process questions. Should we pursue Find other clues to the future by looking at your com-
growth through entering new geographic markets in pany’s internal environment: When have you been suc-
Africa? What criteria should we use for selecting new cessful or unsuccessful with products and services,
markets? Does the sub-Saharan market meet our criteria customers or end users, or in various geographic mar-
better than other alternatives? The second group of kets? What was the cause? Questions about past internal
questions uses a rational process to resolve the issue strategy processes will also help: What basic beliefs or
through a logical sequence of gathering, organizing and values affect organizational culture and strategic behav-
analyzing information. ior? What is your strategic history? What are the
● The skill and commitment of the top team is key expectations of your various stakeholders? What are
to the success of strategy formulation and implementa- expectations for growth and return? How well have
tion. The rational process and tough questions allow you implemented previous strategies, and do your
everyone to use the same language and disengage from business plans and annual budgets reflect your strate-
personal agendas and politics. gy? Do you have a review process for your strategy?
The Five Phases These questions determine which data are strategical-
ly relevant. Your team will now move from information
In addition to the considerations above, there are five
to judgment to strategic insight. You will develop a set
phases of strategy formulation and implementation
of commonly held assumptions about the external and
processes that will be explored in the rest of the summa-
internal environments that the company will operate in
ry. These five phases are:
over its strategic time frame and the implications for
1. Strategic Intelligence Gathering and Analysis. your company. Assumptions, or general knowledge,
2. Strategy Formulation. should be distinguished from implications, which are
3. Strategic Master Project Planning. the insight into the effect on your organization. This
4. Strategy Implementation. process is inherently iterative and will take a lot of
5. Strategy Monitoring, Reviewing and Updating. ■ work; however, if done well it will provide a solid foun-
dation for the remaining four steps of strategy formula-
For Additional Information on the Nine Questions for Constructing
the Strategy Framework, go to: http://my.summary.com
tion and implementation. ■

Phase 2: Strategy Formulation


Phase 1: Strategic Intelligence Strategy formulation begins with the company’s strate-
gic time frame and basic beliefs. Time frame and basic
Gathering and Analysis beliefs will help determine how to guide the organization,
Executives often gather reams of data to help formu- define and strengthen your competitive advantage, recog-
late a strategy, but the data are only representative of the nize which key capabilities you need, allocate scarce
past and present. They say nothing about the future. resources, determine direction and scope for growth and
With so much raw data available today, it is difficult to new business, and plan expectations for return and profit.
discern what is relevant and not get sidetracked by
minutiae and research for the sake of research. But even (continued on page 4)

Soundview Executive Book Summaries ® 3


The Art and Discipline of Strategic Leadership — SUMMARY
focus for your competitive advantage, the scope of your
Overview of Gathering and products and markets, key capabilities and communica-
tions systems. It is also a filter for new growth opportu-
Analyzing Strategic Intelligence nities and a guide for phasing out non-strategic business
areas. After establishing a time frame and basic beliefs,
1. Gather accurate data, focusing on vital questions
you will brainstorm alternative strategic visions for con-
not masses of information.
sideration based on one of the eight Driving Forces at
2. Distill data into a manageable quantity and iden-
the core of all strategies.
tify common themes.
Three of the Driving Forces are quite common.
3. Analyze and agree on the meaning of the infor-
mation presented. Companies with a Products/Services Offered Driving
Force provide a limited range of products to an unlimit-
4. Make judgments based on environmental
ed market, such as Rolex and Toys R Us. Markets
assumptions and implications.
Served companies provide an expanding group of prod-
5. Analyze potential problems and opportunities.
ucts to a specific market, such as Dunhil and Nike.
6. Evaluate the validity of assumptions and implica- Return/Profit companies, such as General Electric,
tions. focus primarily on increasing financial returns.
The other driving forces are Low-Cost Production
Strategy Formulation (eg. commodity companies), Technology (eg. Cisco and
(continued from page 3) GoreTex), Natural Resources (eg. oil companies),
All goals must have an endpoint to create a sense of Method of Sale/Distribution (eg. express mail delivery
urgency for accomplishment. Your time frame should companies), and Operations Capability (eg. printing
be determined by your individual organization and and metal fabricating companies).
the forces that affect it — from macroeconomic trends Choosing the optimum Driving Force for your compa-
to emerging regulatory concerns to your value chain’s ny will be one of your most important decisions. It is an
timetable. The strategic time frame is not the same as intense and demanding job that will determine your
the time period for long-range planning activities, which organization’s competitive advantage and the key capa-
are often arbitrary and determined by accounting and (continued on page 5)
shareholder expectation.
Basic beliefs are deeply held tenets, creeds, convic- Finding the Driving Force
tions or persuasions that provide the social cohesion
of organizations. They set boundaries for day-to-day
Of Hallmark International
decision-making, reinforce strategic unity, and set a Sales for Hallmark International, the half-billion dol-
standard for performance and accountability. Basic lar global subsidiary of Hallmark Cards, Inc. were
beliefs must be defined during the strategic intelligence slumping. One reason was that the global company
phase and returned to throughout the process. Identify kept trying to emulate the driving force of its U.S. par-
beliefs by considering where they came from, how they ent, which had the characteristics of a Market Served
are articulated and demonstrated, how new beliefs organization — it offered its mostly female, middle
become implemented and accepted, and the desired aged, middle of the road clientele greeting cards, tele-
nature of your company’s relationship with its stake- vision miniseries, inspirational posters, a chain of por-
holders. Beliefs are meaningless unless they support trait studios in the malls and even the Crayola crayons.
your strategy. They are not just nice to have, they Hallmark International tried to base its strategy on
explain how an organization conducts its everyday busi- the Markets Served Driving Force, but its diverse,
ness, and they align communications, culture and prac- multi-national client base didn’t respond. The Method
tices with strategic vision. of Distribution Driving Force, based on the success of
the U.S. parent’s distribution network, was also con-
Driving Force sidered — but company executives thought Hallmark
Freedman coined the phrase Driving Force with his Card’s success would be difficult to emulate.
colleagues at Kepner-Tregoe. It is “the primary deter- Finally, Hallmark International settled on the
minant of the products and services an organization Products Offered Driving Force, which focused on
will and will not offer and the markets (customers, greeting cards and very closely related products. The
consumers and geographies) it will and will not decision played to Hallmark International’s strength:
serve.” It expresses the essence of what your business is meeting customer needs for greetings, expressing
about. You will need the Driving Force to provide the care and building relationships.

4 Soundview Executive Book Summaries ®


The Art and Discipline of Strategic Leadership — SUMMARY
Strategy Formulation
(continued from page 4) Thrust for Growth and New Business: Priorities
Each strategic Rubicon separates current and modified products from entirely new products, and current
bilities required to capitalize on it. Your team must and extended markets from entirely new markets. Determining the organization’s exact thrust for growth
determine a ranked set of objectives for the company and new business lies in the priority assigned to each of the four to six boxes the company will pursue.
and use a well-defined process to develop and articulate
future strategic visions for several Driving Forces. Products/Services
Current Modified Entirely New
A Every organization has current
Discuss how well each Driving Force fits the prioritized markets and products. Companies
goals, and choose the right one to propel your company should seek to maximize
opportunities in this area before

Current
toward unity and purpose. A B C venturing further.

Completing the Roadmap: Thrust and Priorities B Most organizations will pursue
current and modified products,
Now use the Driving Force to determine an actionable and/or current and extended

Markets
Extended
plan to drive the company’s product and market markets, early in the strategic
B B C period.
momentum. Your team must envision its future business
in terms of the thrust and priorities for growth and new C Many organizations will eventually
business, and then outline specific products to be aspire to address either products/
services entirely new to them, or

Entirely New
offered and markets to be served. entirely new markets.
Companies can rarely venture into entirely new prod- C C D
ucts and new markets at the same time and still main- D Few organizations will be able to
take new products to new markets.
tain their Driving Forces (see box at right). The excep-
tion is the Return/Profit driven company where the only
constraints are financial. A Products Offered company, Driving Force to segment products and markets into
such as a carmaker, will generally remain with current strategic categories that share a natural synergy. Place
or modified products instead of completely new prod- all current and potential products and markets that are
ucts, but may enter new markets. A Markets Served consistent with the strategy along the two axes.
company, such as Playboy, will offer modified and new ● Determine Criteria for Emphasis — Using previ-
products, but stay in its current market. If there is a rela- ous strategic intelligence gathering, Driving Force, com-
tively risk-free and potentially profitable way to head in petitive advantage and key capabilities, basic beliefs,
both directions, the strategy team should make it clear and initial financial targets, establish criteria for assess-
that this venture is outside the core business. Fully ing the relative role for each product/market combina-
exploiting the current product in the current market is tion, or cell in the Matrix.
often overlooked in pursuit of more exciting options, but ● Assess Each Cell — Use the established criteria to
it can be an excellent source of growth. conduct a small-scale decision analysis on the future
After clarifying the company’s products and markets, activity for each cell that reflects the contribution to the
the team establishes the financial goals it expects from strategic intent. Determine the future degree of empha-
the strategy. Only a purely Return/Profit company has sis (Low, Medium, High) and the type of emphasis
financial goals as its prime motive behind strategy. For (Develop, Sustain, Opportunistic, Monitor, Explore,
other companies, financial success should be an output Phase Down) needed to achieve the ideal future.
of strategy, not a motivator. Financial goals should be ● Review Matrix and Strategy — This is an itera-
expressed through specific parameters like ROI, profit tive process, and most companies find they have too
targets, cash flow requirements, as well as through gen- many “High” and “Develop” types of emphasis cells.
eral parameters like increased revenue and improved The team must review and rework to obtain a real action
year over year performance. These are not financial plan rather than an unobtainable wish list.
plans or projections, but goals describing an ideal future. At this point the team will have gathered so much
The Product/Market Matrix information, it is time to stop and articulate a strategic
profile using all of the information, judgments and
Now it is time to create the Product/Market Matrix as a
implications developed so far. It will allow the team to
roadmap to achieve the strategic vision. This matrix (see
effectively get to the nitty-gritty of implementation. The
example on following page) is a robust tool that allows
CEO must also take time to consider the team and how
you to manage strategy by determining relative emphasis
it is working. Do roles have to be changed? Does the
of each product/market combination and showing you
team need more support? ■
how to allocate scarce resources to exploit competitive
advantage. There are four steps to create the matrix. For Additional Information on how to build the Product/Market
Matrix, go to: http://my.summary.com
● Segment Products and Markets — Use the

Soundview Executive Book Summaries ® 5


The Art and Discipline of Strategic Leadership — SUMMARY

Example of a Product/Market Matrix


Entirely
Modified New KEY
Current Products Products Products
Non-

Total Overall
Alcohol Sodas Juices Coffee, beverage, Degree of Emphasis

Customer
Emphasis
Coke Tea, Nuts, Chips,
Beer Wine Spirits Clones Others Organic Standard Milk Pretzels, H = High
Cookies M = Medium
H D H D L PD M S L S H D L O E L D H L = Low
Supermarkets
M M M M L L M O O M N/A = Not applicable,
Retailers

H S M D M S L S L S M D L O E L D M e.g., lipstick to men


Specialty L M
H L M L L O O O O = Choose not to pursue
N/A L PD L S L D L O E L D L at this time
Corner Shops N/A N/A
M L O L O O L
H H D M PD M S L S L D L PD M D L D H
Current Markets

Chains
H M H M L O M O O M
future X
Pubs

Independents H H D M PD M S L S L D L PD M D L D M
H M H M L O M O O M current
Educational L PD L PD L L PD L E O E L
Establishments N/A N/A N/A M O O M
M M H Type of Emphasis
Government

D = Develop
Hospitals L S M D O PD L S L S H D L PD H D O E M
L
S = Sustain current effort
L L L L L M M O L
OPP = Opportunistic
Retirement L S M D L S L S L S H D L PD M D M M M = Monitor
Homes L L L L L L M H O L E = Explore
L
PD = Phase Down
Total Overall H H M L L H M L
Product Emphasis H M H M L L M O O

Phase 3: Strategic Master The projects that address the critical issues discussed
above are of highest priority. The team then looks at the
Project Planning strategic profile and determines the difference between
Reluctance or incompetence in crafting a process for the organization’s current state and the ideal. The strate-
implementing strategic change is the most reliable pre- gic profile developed in Phase 2 consists of the
dictor of failure. Every corner of the organization must Product/Market Matrix; competitive advantage; key
change, so strategy implementation should be built into capabilities; basic beliefs; strategic intelligence gaps;
the work of the entire organization. The scheduling, functional, divisional or business unit strategies; and
resourcing and sequencing of project management are potential mergers, acquisitions or joint ventures.
familiar to us all, but the Strategic Master Project Plan Existing key projects such as moving headquarters or
has the following distinguishing characteristics: upgrading a telephone system must be considered in the
● All projects in the Plan flow directly from the way they affect the organization’s ability to implement
strategy. strategy. Finally, the top team should use the Enterprise
● Plan includes a considerable number of diverse Model as a diagnostic tool for determining affect of
projects. strategy on the organization as a whole. For each com-
ponent of the Model ask, “How do we compare with our
● Plan requires the disciplined prioritization of ini-
strategy ideal for this component?”
tiatives.
By drawing on these four sources, the top team gath-
● There is enterprise-wide adoption of common pro-
ers a potential pool of projects for the Strategic Master
ject management language and methodology.
Project Plan, and then prioritizes them based on impact
● Plan includes disciplined approach to project man-
and urgency of their results. By using the strategic crite-
agement methodology.
ria they develop an optimal portfolio of projects that can
● Success depends on discipline, commitment and be accomplished within the constraints of available
active support of entire top team. resources. As organizational capacity and resources
The purpose of the Strategic Master Project Plan is to become available, more projects can be added to the
assess the necessary strategic initiatives, integrate the portfolio.
existing operation projects, identify which projects must Once the portfolio is determined, the top team must
be accomplished first, and create an overall system that
keeps implementation in line with the strategic vision. (continued on page 7)
6
Soundview Executive Book Summaries ®
The Art and Discipline of Strategic Leadership — SUMMARY
the Driving Force to suggest a different structure. A
Common Implementation Pitfalls Products Offered company will most likely consider a
structure reflecting its major product categories. Most
✓ Strategic inertia or not getting started. importantly, the selection criteria for structure must be
✓ Lack of stakeholder commitment to the vision. rooted in the strategic vision.
✓ Strategic drift, or not focusing on the destina- Strategic Information Management: Companies
tion. expect their capacity to gather and synthesize informa-
✓ Strategic dilution where things are moving, but tion to play a crucial role in success, but the analysis and
it’s not clear who’s driving. dissemination of critical strategic information must be
✓ Strategic isolation where things are happening, built into the implementation plan. The Driving Force
but no one communicates. will determine the most important strategic information
✓ Failure to understand progress or know where needs, such as a Markets Served Driving Force company
you are on the journey. that will need data on demographics and related trends.
✓ Initiative fatigue when things are happening, Complexity: Because CEOs don’t like to say no and
but nothing gets done. companies try to be all things to all people, there is a lot
✓ Impatience for immediate change. of unnecessary complexity in companies. Strategy teams
✓ Not celebrating success and rewarding progress. must ferret out any organizational complexity that will
cripple implementation.
Aligning Strategy, Culture and Performance
Strategic Master Project Planning
(continued from page 6) Ignoring the “soft” or human side of implementation
jeopardizes your strategic goals from the outset. There
set the foundation for the best possible execution. is a direct line of sight from strategy to culture to per-
They must choose a single systematic process that formance, and then on to business results. Freedman
defines project management discipline. It needs and Tregoe define culture as “the combined effect of
robust tools for resource planning, scheduling and behaviors, values, heritage, thinking and relation-
monitoring, and should also make time for the people ships and the way these are embedded in an organi-
side of project management, including communica- zation and its performance.”
tion, motivation, and time management and balance. Culture: To align strategy and culture, leadership
The strategy formulation team must have its own must address both the explicitly expressed values and
management structure with the systems to support it, behaviors and the latent elements hidden in the organi-
including stewardship and support from the top team zation’s subconscious, with a focus on those culture ele-
and a well-funded support office dedicated to the ments that have remained unchallenged for years. Basic
implementation. The top team also devotes ongoing beliefs are key to setting strategy, but without leadership
effort to monitor and manage the success of the they don’t define or create a strategic culture.
overall Plan, including reviewing the portfolio and Performance: Consider the extent to which the strate-
managing employee behavior. ■ gy and its supporting culture are embedded in the way
your organization directs, manages and rewards its peo-
For Additional Information on typical roadblocks of Strategic Master
Project Planning, go to: http://my.summary.com
ple? How does your organization produce behavior from
employees that are directed toward achievement of a
specific goal? How are people rewarded and encouraged
to behave? It is also important to align the performance
Phase 4: Strategy system with the strategy, so people are encouraged to
Implementation pursue the strategic dimension of their jobs and receive
negative consequences when they ignore them.
Aligning the Infrastructure
The fourth strategic phase is implementation. Though Communicating Strategy
all Strategic Master Project Plans are different, they do Failure to communicate the strategy throughout the
have some common traits that are so important that they ranks is a death sentence for implementation. There are
must be regularly reviewed and realigned with the many stakeholders involved when a new strategy is
strategic intent when necessary. implemented — employees, unions, analysts, sharehold-
Organization Structure: When approaching imple- ers — and all of them have their own biases and precon-
mentation, first examine the current structure. If it pro- ceptions about a new strategy. They will ultimately
motes implementation, leave it alone. If it doesn’t, use (continued on page 8)

Soundview Executive Book Summaries ® 7


The Art and Discipline of Strategic Leadership — SUMMARY
Strategy Implementation
(continued from page 7) Components of the
respect a strategy that shows clear direction and purpose, Communications Plan
because they will have important roles in its future.
✓ Strategic message
Communicating strategy promotes ownership and
gives people a reason to support the implementation. ✓ Means of testing the listener’s understanding of
the strategic message
Stakeholders can also be an important feedback source
when they understand the strategy. Communication ✓ Understanding of the costs
translates the big-picture vision into specific expecta- ✓ Schedule for releasing information and obtaining
tions from individuals and groups, and helps to motivate feedback
and get people committed to change. When communica- ✓ Evidence of top management’s direct involve-
tion is implemented properly every internal and external ment
stakeholder will know “what does this mean to me?” ✓ Built-in feedback mechanism
Finally, proper communication changes behavior,
because strategy informs the processes of setting goals, jects in the Strategic Master Project Plan. Is strategy dri-
developing job descriptions, managing projects. ving the decisions made in your company, or are man-
When the top team sets out to communicate the plan agerial “lone rangers” operating independently of strate-
they must explain the strategic profile and Strategic gic imperatives? Leadership determines if the environ-
Master Project Plan to the internal or external profession- mental assumptions made during strategy formulation
als who will execute the plan. They must know the nature are still valid, if the company is performing well against
of each audience and the appropriate message. For financial expectations and other key indicators of strate-
instance, communication about the company’s thrust for gic success. If not, the strategy may not be viable. The
growth and business will be communicated differently to top team must continually revisit the components of the
middle managers, plant workers and investment bankers. strategic profile to make sure they are still applicable.
Communications should begin early to quiet rumors Renewing: Leadership must consider the implications
and reassure employees, and the top team should shoul- of any identified deviations from the strategy discovered
der the responsibility. When communicating with a spe- during monitoring. The strategy generally needs to be
cific audience, they should stick together and remember reevaluated when small deviations occur on a regular
to communicate face-to-face as much as possible, involve basis, or when there is a major deviation. Determine if
the supervisor closest to the target audience, listen as well the deviation is the direct result of the strategy rather
as talk, skip the dazzle and focus on the message, engage than operations, but avoid blame and finger-pointing. In
the audience, and connect every message with an action the absence of identifiable deviations, there should be at
or plan to be implemented. People will watch closely for minimum, an annual review of the strategy.
congruence between actions and words, but if communi- Sticking to it: It is important to recognize that moni-
cation is built into the Strategic Master Project and used toring is just as important as strategy formulation and
effectively, it is invaluable for driving the changes in cul- implementation. Executives may not want to keep up
ture and individual performance that make implementa- with monitoring because it is never-ending, and in the
tion possible. ■ current fast-paced business environment it is hard to
keep an evergreen approach, even though it is more crit-
For Additional Information about constructing a Communications
Matrix, go to http://my.summary.com 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 to
changes in the business environment if it is necessary to
Phase 5: Strategy Monitoring, maintain strategic focus. Successful companies antici-
Reviewing and Updating pate change and alter their strategies in advance. World-
The final phase of the strategy process asks the top class companies dictate the nature and pace of change,
team to keep the strategy “evergreen” by asking what redefining their industries and even drive the value
could go differently than anticipated, how will you know chain. The difference between these kinds of companies
if it occurs, and what will you do when it occurs. is the rigor of their strategy monitoring, reviewing and
Monitoring: The top team monitors both the continu- updating. ■
ing viability of the strategy and its implementation. They For Additional Information on Strategy in the 21st Century, go to:
review how well the company is implementing the pro- http://my.summary.com

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Soundview Executive Book Summaries ®