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When it Comes to Strategy, Planning and Execution, How is Your Vision?

I read a great McKinseyQuarterly report from January 2011 that looks at business strategy. The subject matter of the study is, “Few companies create strategies that deliver more value than the sum of their business unit parts, but those that do also excel at moving resources and removing barriers.” The results of the study are both fascinating and provide further evidence of what I’ve been advocating for such a long time. Successful companies put a strategy together and then work that strategy.
Are you looking into the distance and making a plan on how to get there?

How can this be?

What concerns me is that only 6.5% of respondents rated their companies as having an effective approach to business strategy development. In addition, it appears that these executives “spend more time developing strategy, review strategies more frequently, and are much better at eliminating barriers to implementation.” Only 19% of respondents said their companies have a distinct process for developing corp0rate strategy, and this isn’t getting done on an ongoing basis. Of this 19%, only 8% look at strategy on a regular/ongoing basis. Twenty-five percent feel their companies need to evaluate/develop strategy on an ongoing basis. The vast majority (44%) review annually, with 25% reviewing every 2-3 years, and 11% reviewing every 4-5 years. My question is if BODs and investors are as disturbed by this as I am and, if not, why not?

The long and winding road

To continue down this path, I’ve had conversations with a number of retained search professionals over the past few months. All are with well-known national firms and have their fingers on the pulse of what’s happening in business. A common issue keeps cropping up in conversation that has been bothering me. When I ask about the CEO’s they work with, and which of their clients have a talent strategy that’s aligned with their business strategy, they have all said without hesitation that their clients need to implement this type of strategy. Although these companies may have alignment at the executive level, they don’t revisit this. Further, they have little or no real alignment with their talent strategy or they lack one that’s effective. Every recruiter I spoke to about this couldn’t think of one of their clients that would consider looking at this area to solve their talent problems.

Reading between the lines

While many CEO’s consider themselves visionaries, they don’t look ahead more than 90 days at a time. This 90-day window, in my opinion, is what’s hurting business across industry. I assert this is what’s really at work given the results of the McKinsey study. I’m not sure if it’s pressure to produce from shareholders, investors, and/or boards of directors. Companies must look into the future and examine where they want to be and then put a plan in place to achieve it. Call me naïve, but isn’t annual performance more important than quarterly performance at the macro level? When did we become so shortsighted?

Say it aint so

On a final note, I had a conversation last week with a recruiter who told me that the director of HR for one of his clients (a 2B company) has more power than the CEO. He was as mortified to tell me this as I was to hear it. “When no one in the company is willing to take a step without checking with HR you have a real problem”, he said. One of my long-time clients is a VP WW Sales for a well-known technology firm. A few months ago he told me that they had hired a Director of HR. When I asked whom it was he replied, “I have no idea. You know I hate HR”. My intention isn’t to slam HR as a whole; I know there are some outstanding HR professionals out there, but this is a huge issue. If so many people feel this way, why isn’t anyone doing anything about this? HR needs to be a partner/consultant with the executive team and with consultants who solve their human capital issues. Ultimately it’s those consultants that will end up making their life easier and make them look like heroes. Who wouldn’t want that? Are CEOs passing their talent issues on to the HR leaders instead of being ultimately accountable for talent success in their organization?

I am committed to exploring this issue and welcome any questions, comments, concerns, etc you may have on this issue.

Creator and Host,

Carol Schultz

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