Virtual strategy meetings: a dozen ‘must-do’ tips for holding strategic planning meetings online

Dedicated in-person strategic ‘away-day’ meetings have long been a regular event in the diary for Board members or senior staff at many organisations. Sadly, of course, the coronavirus pandemic has made such meetings difficult over the last year, so leaders have had to get used to doing things virtually. If you’re planning to hold a virtual strategy meeting soon, here are some suggested ‘must-do’s, which I hope might be helpful to you.

In-person strategy meetings can’t really be beaten for allowing their natural conversation flow and easier team atmosphere, but leaders can still achieve effective strategic conversations online. And we should remember too that online meetings do offer some obvious advantages like zero travel costs for participants. So, in future, organisations are very likely to use a combination of both in-person and online meetings for their strategy-making and, indeed, more individual meetings are likely to be hybrid in-style, where participants are split between some attending in-person and some remotely online.

For virtual strategy meetings to work well, managers need to adapt, of course, to the different nature of online conversation. But, at the same time, it’s also worth trying to adapt in some ways to how strategy itself is best handled to suit today’s more uncertain, fast-moving and complex world.

Firstly, strategy nowadays is best treated less as a ‘multi-year’, detailed plan and more as a broad ‘strategic framework’ that can guide and steer an organisation forward flexibly – with such a framework typically including long-term purpose, mission, key company values/beliefs, and a few specific, longer-term goals. Secondly, leaders can then use such a framework to focus on choosing and managing an ‘agile’ cycle of short-term (I suggest six-monthly) actions, experiments and projects, seeking rapid feedback from the marketplace before the next period. Thirdly, strategy nowadays typically needs to put less emphasis on numbers and a bit more on exploring ‘soft’ data e.g. qualitative feedback from customers, connections between events, trends, implications of events, and, of course, creative ideas.

Also, strategy – to encourage rich thinking and combat individual bias – needs not only a decent level of ‘cognitive diversity’ in the senior team (boardroom) but also a good level of ‘collective intelligence’ from extensive involvement of many stakeholders. Indeed, strategy today can often be about finding opportunities across an organisation’s wider marketplace (‘ecosystem’) and working collaboratively with other organisations. This more ‘open’, participatory approach to strategy also, of course, makes wider ‘buy-in’ and support for defined strategy much easier.

Another vital point is that, given today’s fast-moving world, strategy is no longer something that a Board or senior team should look at just once a year or occasionally. Instead, strategy needs to be seen as an active, ongoing process, ideally with your top team setting some dedicated time for an area of strategic discusion at every regular meeting (alongside operational or routine governance topics) – supported in-between, of course, by required research, detailed thinking, further analysis, planning or other tasks by various colleagues.

So, what are some good tips for running a virtual strategy meeting? Well, the foundation of such a meeting remains similar to what is best for an effective in-person meeting, including: clear objectives, a well-structured agenda, a relevant group of attendees, advance reading, and good facilitation. But there are several practices specific to virtual meetings that I’d recommend, including the following:

  1. Keep virtual strategy meetings short: Holding strategic discussions online can, of course, be tiring. So, best in your strategy process to hold a few more, separate meetings compared to traditional in-person planning and also try and keep each individual meeting to no longer than about 3-4 hours maximum (or half a day). If your Board is used to an annual one (or two) day ‘awayday’, best instead to divide that up into a set of short meetings over one or two weeks. An overall work plan needs, of course, to be prepared across the meetings and the supporting tasks in-between. Don’t be too rigid, though, as strategy is heavily an iterative process, where ideas or views can evolve or change along the way.

2. Ensure all attendees are familiar with the technology ahead of time: Although traditional conference ‘dial-ins’ are still possible, the expected standard nowadays is to use a modern video conferencing tool (like Zoom, Microsoft Teams, GotoMeeting, Slack, or Webex), as they can make people feel like they’re all at the ‘same meeting’. But an absolute ‘must’ is to ensure all participants try out the technology before the meeting and check they are comfortable with the major features. Nothing kills the opening of a meeting like a 10-minute delay because someone can’t connect!

3. Ensure the right size and composition of the group: A common mistake, in my experience, with away-days is that organisations invite too many participants. In a virtual setting it is even more tempting – and easier – to do so! Managing a strategic conversation online is much more challenging, so try to keep numbers down to a minimum – no more than about 8 or 9 people if you want to really ensure everyone is going to be fully engaged. And, of course, make sure those are the right people best suited to the purpose of the meeting in question: if someone is only needed really for a specific part of the agenda, get them to join later for that item only.

4. Create a team feeling from the start, if not beforehand: As with any group endeavour, it’s very helpful if the people know each other to some extent, as this will encourage trust and greater openness. Where participants don’t know each other – or they come together only infrequently – be sure to set aside a little time at the very start for some informal ‘social’ chat or have the facilitator use a suitable ‘ice-breaker’ technique. After this informal exchange, the facilitator should turn to confirming the overall aims and agenda of the meeting and check everyone is clear and allow for any queries to be answered: this step helps for everyone to see themselves as a group that has a joint task to work on.

5. Appoint a facilitator and assign any other roles: A virtual strategy meeting needs a suitably competent person to act as facilitator – ideally an independent, external professional, especially if the meeting is going to run for several hours or involve a lot of creative thinking or open discussion (a virtual meeting is much more challenging than an in-person meeting for a CEO or Chair to both facilitate and contribute input to). For any individual segment in a meeting, although it’s possible, best to avoid having two co-facilitators, so there is no confusion. Beyond the facilitation task, decide who – if not the facilitator – is to handle tasks around the technology, for example monitoring the chat function, splitting participants into break-out groups, handling any voting, and resolving any technical issues that occur.

6. Minimise presentations, maximise discussion: The only thing worse than a long presentation in-person is a long presentation during a virtual meeting! So, circulate detailed or long documents for participants to read ahead of the meeting. Ensure all papers are well-structured and sections and paragraphs precisely numbered/labelled so that participants can all locate a particular section quickly on the day, if needed (shared document tools or virtual portals e.g. Sharepoint and Google-Docs can be very helpful here). If someone does need to present, limit to a few pages only and use screen-sharing to show the material, so everyone can easily follow along.

7. Make sure all faces are clearly visible: To get close to the feel of an in-person meeting, it is best if the faces of everyone participating can be seen altogether on-screen (and throughout all sessions). The facilitator also needs this in order to be able to maintain a roving eye across everyone and ‘control’ discussion. To help everyone’s visibility, ensure all participants have enough light on them, get everyone to sit close to their webcam and ask them to look into the camera lens when speaking (this helps enhance eye contact and enables participants to read each other’s facial expressions better). Also, ask everyone to keep their on-screen backgrounds free from distractions and movement as much as possible at all times.

8. Define some basic rules of meeting etiquette: Like any away-day, there’s a need for some basic rules of suitable behaviour. Typical ones used for an in-person meeting still apply – for example, don’t be rude or offensive, don’t interrupt others until they have made their point, make points succinctly, and return from breaks on time. Others need to be more specific to virtual meetings – including, typically: ”mute’ when not speaking, stay on-video throughout, ‘raise hand’ if want to speak and wait for the facilitator, and how the facilitator may ‘cut-off’ a person if they act unreasonably!

9. Use well-planned sessions and a facilitation style that balances engagement with control: As it’s not easy in a virtual setting for a facilitator to redesign a meeting ‘on the fly’, all agenda sessions should be carefully planned ahead and precise time-slots set. Try and vary the format, interaction approach and content style of on-screen materials across segment sessions, so things don’t get boring. On the day, in each agenda segment, the facilitator should at the start ensure all are clear on what is intended and during discussion he/she should regularly summarise points made. During all sessions the facilitator should also keep a constant eye across all participants to check everyone looks engaged. To reinforce everyone’s engagement, a good approach is for the facilitator to ‘call-out’ each person in turn to give their view before a decision is finalised, rather than have a ‘free for all’. To balance the control need, a facilitation style that is collegiate as well as warm and frendly is normally best online.

10. Use break-out groups and other technology tools to boost engagement: To further help to keep up participants’ interest and engagement, be sure to make good use of some of the interactive tools that most video conference platforms come with. In particular, I’d recommend some use of small, virtual ‘break-out’ groups – best to divide up participants in advance (less distruption on the day), give a precise question or issue to discuss, and don’t let them run on too long). Another, very useful tool is the ‘chat function’ whereby participants can send short messages either to the whole group or directly to the facilitator: this tool can be helpful, for example, to support a brainstorming session. Examples of other tools include virtual white-boards and voting buttons, but I would advise not using too many different interactive tools, as more complexity risks confusing some participants, technical glitches or extra delay.

11. Take frequent breaks: Because sitting and concentrating in front of a screen for any length of time is physically demanding, be sure to divide up your meeting with regular breaks. I’d recommend at least a 10-minute ‘pit-stop’ break every 60-75 minutes or so and a longer (45-60 minute) break after two and a half hours. Encourage people at each break to get up out of their chair and have a stretch or walk around the room.

12. In hybrid meetings, give extra attention to the remote participants: If your meeting has some people together in a conference room and some attending virtually, the facilitator should stay a bit more mindful about the remote individuals, to ensure they feel equally involved. Some specific tactics I would suggest: firstly, at the very start of the meeting when everyone gives some initial remarks and then each time there is a ’round-robin’ sharing of views as a group, go first to the remote participants; secondly, the facilitator should maintain a constant, sweeping eye on both groups of participants, particularly calling out any remote person who looks distracted or concerned to speak; thirdly, emphasize to all participants that they should follow the meeting etiquette of raising their hand to the facilitator if they want to speak (rather than blurt out or interrupt a colleague speaking); and fourthly, the meeting should, of course, try and avoid any long presentations or speeches where a person in the conference room makes heavy use of a traditional flipchart or other off-line materials: far better for participants to view on their laptop screens together electronic documents that have been pre-circulated (using a suitable document sharing tool or portal).

Written by Mike P. Owen, CEO & Principal Consultant at The Owen Morris Partnership – a consultancy practice based in the centre of the UK specialising in strategic and management facilitation. If you have a project we can help with, please do not hesitate to contact us at: or telephone us at the office (00 44 1886 881092).

Above is copyright of Owen Morris Partnership, 2021.

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Achieving radical change: the challenge of transformational leadership and making it work

Every organisation faces the need for serious or radical change sometimes.  A time when just making more incremental or small-scale changes won’t be enough.  This is when words like ‘transformation’ and ‘transformational leadership’ are perhaps banded about to refer to the big-scale, deep-seated changes leaders seek to make.  But what exactly is meant by these terms and, more significantly, why it is that research consistently reveals that over 70% of transformations fail ?  And are there any key principles than can increase the odds of success ?

In my view – based both on the management literature and my consulting experience – a transformation is best defined as being a major shift around an organisation’s core ‘strategic fundamentals’ –  involving all or most of the elements of vision, business focus, capabilities, business model and identity – with the aim being to achieve a ‘step-change’ in performance which the organisation could not deliver previously.

A transformation involves a substantial re-invention of the organisation.  This contrasts to ‘change management’ which is best thought of as delivering a few discrete, well-defined and quite focused shifts.  A transformation is much more wide-ranging, looser, holistic and dealing with a range of initiatives which are usually interdependent and cross-functional.  A transformation is also unpredictable, iterative and experiential with a much higher level of uncertainty and risk.  In contrast, change management focuses on executing a specific set of known/wanted adjustments to how an organisation operates and is mostly about managing a pool of specific projects in a systematic and efficient way.

Many books and articles have been written on ‘change management’ and there is a large number of different change ‘models’ (e.g. Kotter) available to guide leaders and managers with sound principles and suggested tips – for example, making the business case for change, building a coalition of leaders, getting early results, engaging stakeholders, executing with discipline.  However, despite many of such tips still being relevant and useful for dealing with transformations, in most cases leaders struggle with carrying out a transformation.  A lot of the problem, of course, is the much bigger scale and complexity involved with a transformation, but I think it’s often because leaders don’t see the core difference in leadership approach needed between a change and transformation.

True transformation is very much about inspiring people’s hearts, minds, motivations, beliefs and aspirations – as individuals and collectively.  It’s about moving people emotionally and changing the overall culture in an organisation.  In my view, this is the stuff of true ‘leadership’ – it’s where leadership combines with radical change.

The term ‘transformational leadership’ (or transforming leadership) was initially introduced by political historian and biographer James MacGregor Burns, who in a seminal book published in 1978, contrasted it with ‘transactional leadership’.  Transforming leadership occurs when both leader and followers raise each other’s motivation and sense of ‘higher purpose’.  Transactional leadership, on the other hand, relies on motivating employees through rewards or punishments:  an ‘exchange’ between leader and followers in return for followers’ compliance with the leader’s wishes, with no sense of any higher purpose.

Transformational leadership, according to Burns, addresses people’s ‘higher-order’ needs for achieving self-esteem, self-actualisation and sense of contribution to the ‘common good’ (reflecting, of course, the well-known Hierarchy of Needs model developed by Maslow).  Transactional leadership is best suited to situations that require routine, consistency, reliability and structure – areas were there is not much need for innovation.  On the other hand, transformational leadership is ideally suited to situations where there is frequent change in the environment and creativity is important.

Burns’s ideas around transforming leadership were notably expanded upon by researcher Bernard M. Bass to develop what is today referred to as Bass’s Transformational Leadership Theory.  According to Bass, transformational leadership can be defined based on the impact it has on followers:  through the strength of their vision and personality, transformational leaders inspire followers to change their expectations, perceptions and motivations to work towards common goals.  They are able to do this particularly by garnering trust, respect and admiration from their followers.

Bass suggested that there are four different components of transformational leadership:

a) Inspiring Motivation – transformational leaders have a clear vision that they are able to articulate to followers.  They are also able to help followers experience the same passion and motivation to fulfil those goals.

b) Intellectual stimulation – transformational leaders not only challenge the status quo, they also encourage creativity amongst followers.  The leader encourages followers to explore new ways of doing things and new opportunities to learn.

c)Individualised Consideration – transformational leadership involves offering support and encouragement to individual followers.  In order to foster supportive relationships, transformational leaders keep lines of communication open so that followers feel free to share ideas and so that leaders can offer direct recognition of the unique contributions of each follower.

d) Idealized Influence – the transformational leader serves as a ‘role model’ for followers.  As followers trust and respect the leader, they emulate this individual and internalise her/her ideals.

What are some typical signs of a transformational leader ?  They include a person who brings a driving purpose and direction to a group by conveying a clear vision for the group’s goals;  a person who shows a real passion for the work of the group;  a person who leads by example;  a person who gives positive feedback for good performance;  and a person who makes the rest of the group feel energised and re-charged.  Such leaders are also invariably genuine, open, positive, energetic and trustworthy.

Research shows that groups led by transformational leaders achieve higher levels of performance and higher levels of individual satisfaction than groups led by other types of leaders.  A lot of this is because transformational leaders believe their followers can do their best and they lead them to feel inspired and empowered.  Staff turnover in such groups tends to be low as the leader is able to engender a great deal of commitment and loyalty.  Also, in such a group, there is a positive influence on employee well-being.

Despite all these positives, though, transformational leadership may not be the best choice in all situations.  In some cases, in particular, groups may need a more managed or even autocratic style with closer control and more direction – especially where group members are relatively inexperienced, unskilled or there is a need for a lot of oversight.

Accepting, then, that transformational leadership can bring benefits in the right circumstances, why is it that research shows that the majority of transformations fail?  On this issue I turned to the latest management literature to note the key insights or pointers.  In particular, I noted the findings from a dedicated group at McKinsey that assisted over 100 clients with transformations over several years from 2010 (see reference below):  below is a quick summary of a dozen things they advised organisations should particularly do to increase the odds of a transformation being successful:

a) McKinsey’s most fundamental finding was that average companies rarely have the combination of mindsets, energy and ongoing commitment needed to pull off a transformation:  typically most leaders are more used to a fairly steady-state – involving quite stable structures and making only incremental changes – rather than dealing with the faster-paced, more visionary, and bruising work involved in a transformation.  So, for a transformation to succeed, leaders need to start by getting out of their usual mindset and adopt a fundamentally different perspective.

b) Leaders need to tell a compelling and engaging story / narrative of why serious change is needed.  It is not adequate for leaders to say to employees things like “we need to increase our bottom line by 25%”  or “we need to raise our market share to become number two in the market”.  Employees do not get motivated or excited by such metrics or goals!  Rather, employees want to hear more about the wider context and about a wider aspirational vision for the future and, ideally, what’s in it for them as individuals, not just for the organisation.

c) Leaders should set performance goals/aspirations that will really ‘stretch’ the organisation to its full potential, rather than make them too modest or ‘safe’.  To judge what is really stretching, leaders will typically need to ‘step outside’ the organisation and adopt more of the perspective of an objective outsider.  Also, leaders need to ensure thinking follows from well-grounded facts and clear analysis, not untested assumptions or personal views (which will invariably be biased).

d) Don’t start by accepting assumed ‘trade-offs’ – for example, “we could cut our costs a lot, but that would mean us having to sacrifice customer experience or quality ….”.  Don’t just accept such ‘either/or’ assumptions:  instead be ready to challenge conventional thinking.  Also, focus on thinking about growth and expansion, not just cost-cutting.

e) Appoint a dedicated person to be ‘transformation director/leader’ and make sure he/she sits on the executive team.  The role of this person is to oversee, champion and lead overall delivery and progress of the transformation programme.  This senior person must have the power to make decisions, not just be a ‘staff’ off-line appointment. A key aspect of their role is to emphasize the overall, organisation-level view of what is right for the organisation as a whole and to act decisively to unblock difficulties or local obstacles that will arise as the overall project evolves.

f) Set up a dedicated ‘Transformation Office’ (akin to a Programme Management Office) with a small dedicated, experienced team (typically a mixture of project managers and one or two analysts or specialists), headed by the Transformation Director.  This team is there to do the detailed work of monitoring, co-ordinating, assisting and reporting on the wide array of individual initiatives and projects involved in a transformation.

g) Structure and plan the overall transformation journey carefully and in detail up-front – including, not least:  main workstreams; aims/outputs and actions/activities for each workstream; accountability plan for key work areas; key timings;  budgets;  how work teams will feedback/share/report back to each other;  and progress tracking/reporting mechanisms.  Of course, the programme won’t end up following the first-cut plan, but starting with an overall structure and plan at the start will help bring a disciplined approach.

h) Make extensive use of ‘agile’ project/activity teams and agile project management techniques for developing solutions and the running of dedicated workstreams/activities.  Ideally, this approach  should be combined with an overall cadence of regular (weekly or fortnightly) meetings – facilitated by the Transformation Office – where the leaders of each team come together to share and discuss progress in each team and agree/shape work to be done in the next time period.

I) Ensure the organisation has the right managers and supervisors in the right positions with the right mix of talent and capabilities needed to handle the transformation.  Involve middle managers early on in the overall programme in terms of winning their support for the aspirations and letting them help shape new ideas/policies/ways of working.  Equip managers with appropriate tools, resources and support they need.  Ensure managers and supervisors know how to provide their staff with appropriate personal support, coaching, guidance, assistance, time and space to help them make the change needed in their individual roles.

j) Align incentives well to motivate and encourage senior managers.  Set a focused, small number of objectives with rewards/recognition against each.  Don’t just stress financial targets but, rather, recognise the behaviours that drive he outcomes for the initiatives that really matter (e.g. finding an original solution to a big, unresolved issue).  Offer an outsized pay-out for outside performance.  Use non-monetary incentives, not just financial incentives – for example, a handwritten note from the CEO for an excellent contribution.

k) Keep people’s mindsets focused on overall desired outcomes from the project, not just on completing individual activities.  Leaders must emphasise the ‘big picture’, not let people get lost in the small details.  This is especially so because, as the overall project evolves, there is very likely to be change in what precise activities are needed compared to the very original plan.

l) Build in reinforcement mechanisms to maintain forward energy and ‘lock in’ particular changes once agreed on, so as to prevent the organisation slipping back into ‘old ways’.  These include, for example, widespread/regular updates for employees (and other stakeholders) on progress and early successes/wins;  incorporation of new approaches/ideas/methods straight into company manuals/procedures;   public celebration and recognition of outstanding work by particular individuals or team;  and widespread/maintained communication and visibility from top managers to remind people about the aims and hopes for the transformation and to help keep motivation levels up.

Good luck with your organisation’s potential transformation project!  I hope the above article is of some help.

Written by Mike P. Owen, Snr Partner at Owen Morris Strategic Partnership

Copyright of Owen Morris Partnership, Aug 2019

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Start managing your ‘organisational health’ as rigorously as your short-term financial performance!

In today’s fast-changing world where there is often pressure to get results faster, it is tempting for leaders to focus their thinking on the short-term and define goals and projects that will deliver results quickly.  Indeed, the move in recent years towards ‘agile’ business thinking and ‘agile’ working can encourage leaders and managers to think in such terms.  However, the best route to sustained organisational performance is actually for leaders to manage their organisation for both the long-term and the short-term at the same time.  Leaders need to be artful spinners of plates of different time-frames!

On the business development front, for example, good strategic leaders know this twin-focus requires them to be planning new product development for several years ahead whilst at the same time today selling existing products or launching recently developed products.  What is less appreciated by many leaders, though, is that they need to be thinking about and managing their company’s longer-term ‘organisational health’ whilst they are also managing short-term operational performance.  The problem is, whilst managing organisational health sounds like a great idea to many leaders, it doesn’t feel like a necessity for achieving their short-term goals – which is typically what they are judged on and rewarded against.  Leaders may worry that it is going to distract them from dealing with the ‘here and now’.  This is misguided.

What, then, is meant by ‘organisational health’?  It’s a term that goes beyond the physical and mental state of people in a workplace.  It’s also more than just culture, employee satisfaction, or employee engagement.  It refers to an organisation’s overall ability to align around a defined vision and strategic direction, execute against that vision, and renew itself in response to fresh opportunities.  In other words, how well it runs and adapts, no matter who is in charge and what strategy has been chosen.

The concept of organisational health has been particularly promoted by leading consultancy firm, McKinsey, who have monitored the health of hundreds of different companies across dozens of countries over the last ten years using a measure they developed called the ‘Organisational Health Index’ (OHI).  This is a composite ‘score’ based on asking employees and managers about their perceptions of how well they think their organisation performs against nine specific dimensions of organisational health (see below) and what supportive management practices they see or don’t see being used there.

The notion of organisational health was well set out in the book Beyond Performance in 2011 by McKinsey consultants Scott Keller and Colin Price.  In contrast to the very slender research evidence of earlier ‘classic’ books that tried to identify the keys to sustained company performance (e.g. In Search of excellence, 1982, based on a study of only 43 companies and Built to Last, 1994 which looked at – remarkably – just 18 companies!), the research base used by Keller and Price has been wide and deep – including responses to OHI surveys from more than 600,000 employees at more than 500 organisations, 6,800 senior executives who subscribe to McKinsey Quarterly, data from 100+ projects of McKinsey’s own clients, and reviews of more than 900 publications.

From their many years of research, McKinsey have consistently seen a strong correlation between organisational health and the financial performance of the companies they monitored.  Key findings have been:

Almost all companies perform better if they improve their health.  Around 80% of companies that took concrete actions on health saw an improvement in performance (in terms of earnings and total returns to shareholders).  The majority of these companies moved up an entire quartile against all other companies in McKinsey’s database.

-The top quartile of publicly traded companies in McKinsey’s OHI delivers three times the returns to shareholders as those in the bottom quartile.

Those companies that rise to the top quartile achieve the biggest financial rewards.  Companies whose health improvement efforts took them from the second quartile of the OHI to the top quartile recorded the biggest financial performance boost:  a clear indication that working on health is an important factor in going from “good” to “great”.

In more recent, complementary research, McKinsey looked at the relationship between organisational health and performance over the long-term at 51 companies where they had a rich set of data on both fronts.  Factors they used to assess long-term performance included earnings history, consistency of investment patterns, and the extent to which companies focused on long-term ‘value creation’ rather than short-term targets.  The research found a strong, two-way correlation between health and long-term performance – with the healthiest companies being the ones that focus on long-term value creation and, in the other direction, those companies focusing on long-term value creation outperforming their peers on all nine of the key dimensions to organisational health.

Another noteable finding from all of McKinsey’s research over the years is that organisations can see tangible performance improvement in as little as 6 to 12 months.  This holds true for companies across different sectors and regions, as well as in contexts ranging from wide-ranging turnarounds to more specific improvement initiatives.

So, given this evidenced case for organisational health, what exactly makes up ‘organisational health’ ?  In a nutshell, good health has three key attributes:  good internal alignment, good quality of execution, and good capacity for renewal.  Supporting and enabling these attributes are ‘nine elements of organisational health’:

i) Direction – a clear sense of where the organisation is heading and how it will get there that is meaningful to all employees;

ii) Leadership – the extent to which leaders inspire actions by others;

iii) Culture & climate – the shared beliefs and quality of interactions within and across the different parts of an organisation;

iv) Accountability – the extent to which individuals understand what is expected of them, have sufficient authority to carry it out, and take responsibility for delivering results;

v) Co-ordination & control – how well an organisation is able to evaluate performance and risk, and to address issues and opportunities when they arise

vi) Capabilities – how much an organisation has the skills and talent required to execute strategy and create competitive advantage;

vii) Motivation – how enthusiastic employees are to put in extra effort to deliver results

viii) External orientation – the quality of engagement with customers, suppliers, partners, and other external stakeholders;

ix) Innovation & learning – the quality and flow of new ideas and the organisation’s ability to adapt and shape itself as needed;

Each of these nine elements has been broken down by McKinsey into a small number of specific, helpful management practices.  Some examples:  one of the practices related to ‘direction’ is “articulating a clear direction and strategy for winning, and translating it into specific goals and targets.”  For ‘leadership’, one practice is “involving and empowering employees through communication, consultation and delegation”.  For ‘co-ordination and control’, a practice is “focussing on operational KPIs, metrics, and targets to monitor and manage business performance”.  And, for ‘capabilities’, one practice is “embedding capabilities and know-how through codified methods and procedures e.g. training manuals and SOPs.”

Altogether, thirty-seven specific practices were identified and defined by Scott and Price in their OHI.  Too many to list here, but all are sound and reasonable, save that some are very similar in being basically about good people management or good performance processes and so several could perhaps have been merged to simplify the model overall.

The key to gaining from applying the model is for leaders to put the notion of organisational health at the heart of how they direct and run their organisation, managing it as rigorously as their financial and operational performance.  It means maintaining that twin-track mind-set of concern for both long-term health and short-term results, at the same time.  It means leaders thinking about and developing their organisation’s health proactively and strategically, not being passive bystanders watching the organisation shape itself.  However, don’t just think about health in overall terms:  you need to look at each of the individual constituent elements that make up organisational health (as described above) and seek specific opportunities for improving practices, processes or behaviours.   Then check that your policies in each area will support each other and work holistically together.

Three ‘must-dos’:  Firstly, be sure to set some targets for key areas of your organisational health and integrate health into your company’s overall performance scorecard and regular performance reviews, with data to show how you’re doing against targets  (Consider that organisational health is a useful ‘leading indicator’ i.e. advance signal of performance, whereas financial results are a ‘lagging’ indicator).  Secondly, be sure to weave health into the design and planning of all critical business initiatives and projects.  And thirdly, guide and motivate individuals to value and support organisational health by including guideline behaviours and practices in people’s individual job descriptions and using appropriate financial and other incentives.

Overall, the concept of organisational health is a very valuable and research-justified aid to securing effective organisational leadership and performance results.  Its central message is “pay attention as much to your organisational health as your P & L”.  To be honest, though, it’s still not a phrase or model that I come across routinely in my various consulting or executive work – which I find curious.  I suspect that the slight complexity in the McKinsey model has not helped:  37 exemplar practices and 9 not-so-easy to remember elements – in contrast to some other organisational models like the very familiar ‘7-S’ model that came out with the In Search of Excellence book I mentioned earlier.

Nevertheless, I think we should all be impressed by the existing (and continuing to grow) evidence behind the ‘organisational health’ model and be sure to try and incorporate it into our overall approach to organisational planning and performance management.  Not least, the model is a pointed reminder not just to consider and measure employee-centred issues in organisational development in terms of employee satisfaction or employee engagement:  those nine elements of organisational health point to a lot more!

Written by Mike P. Owen,  CEO at Owen Morris Strategic.

If we can be of help with your organisational planning or performance, do get in touch.

Email:       Office tel:  01886 881092


Copyright of Owen Morris Partnership 2018

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Goodbye to strategic planning. Hello to ‘agile’ strategy!

Traditional strategic planning is dying.  In today’s dynamic world fewer and fewer organisations practise the conventional process of ‘forecast ahead, prepare 3-year plan, then get staff to implement’.  This rigid, top-down approach is in complete contrast to the approach used today by, for instance, leading tech companies where, using the context of a visionary framework they have defined, goals and actions are decided and reviewed every few months for staff teams, and strategy emerges from their ongoing innovations and tactical decisions.  In effect, strategy merges with tactics.

This is ‘agile’ strategy.  It echoes the now well-established agile approach to software development and now being used for wider IT, operational and organisational innovation and change projects.  But what exactly does the agile strategy process involve?  How is it   different from traditional strategy?  And is it really right for every organisation?

Agile strategy avoids trying to pre-design and map out the future in detail – like traditional strategy tries to – and instead is very much a continuous, osmotic process that involves trying out different tactics and ideas all the time to serve customers/stakeholders better and ensuring the organisation responds fast and effectively.  In contrast, traditional strategy tends to be a periodic exercise and be more of an analytical and linear process with change mostly happening in ‘fits and starts’.

However, agile strategy still needs to start with the established notions of ‘purpose’ and (medium-term) ‘vision’ – in order to provide a fundamental anchor to guide ongoing decisions and tactics.  A purpose statement is needed to answer such questions as ‘how do we fit into the wider world?’, ‘how fundamentally do we make our customers’ lives better?’, and ‘what space in the market can we make uniquely ours?’  And having a specific aspirational vision/sense of direction for the next few years ahead is important too – ideally with a few definite goals or broad priorities – to inspire and galvanize people.  Without carefully defined purpose and vision statements, agile strategy would result in chaos and totally un-coordinated decision-making!

Once purpose and vision have been defined, the crux of the agile strategy process involves following a regular and frequent cycle of setting very short-term strategic/output goals (typically for 3 or 4 months ahead) for every team in the organisation and then reviewing their implementation 3 or 4 months later, making any adjustments or adding new goals to suit the latest performance results, match people’s latest ideas, or better suit the latest changes in the environment.  In setting everyone’s 90-day goals/outputs, it is important, obviously, that all functions in the organisation are well aligned.

The traditional annual operating plan goes out of the window.  However, there’s still a need for an annual, overall financial budget – to act as a framework for the quarterly performance plans.  From a governance point of view, just having quarterly budgets with no attempt at thinking further ahead at all about future resourcing needs would not be prudent.  However, with agile strategy, the annual budget does not act as the dominant yardstick and focus for senior managers:  the conventional, overriding focus of hitting a set of annual ‘figures’ does not apply.  Instead, the budget becomes more of a guide simply for co-ordinating forward resource thinking.

The other key feature of the agile strategy process is a performance measurement system that matches the quarterly goal-setting/review cycle of the organisation and includes a rounded/holistic set of success measures.  The familiar concept of the ‘balanced scorecard’ is relevant here, but with less stress on sales or financial metrics and more on customer-centred metrics (particularly customer satisfaction e.g. Net Promoter Score), people management metrics (e.g. employee retention, employee satisfaction) and  practices that foster good organisational health (e.g. flexible job roles, good internal communications, a learning culture, wide use of coaching by managers, and performance data shared fully across all staff).

Agile strategy involves a shift in approach in several aspects compared to traditional strategy.  Here’s a summary of eleven key ways:

a. From reliance on long-term forecasting  …… to …… ongoing wide market-scanning + (collective) intelligence/feedback.                                                                                                      b. From ‘wait and react’ to customer changes …… to ……  deep customer understanding and close involvement of customers, allowing proactive creativity.                                           c. From annual analysis/planning exercise ……. to …… a continuous process of experiment and change.                                                                                                                                             d. From developed at the top of the organisation …… to …… full staff involvement:  both top-down / bottom-up.                                                                                                                         e. From innovation occurs irregularly / in pockets ……. to ……. continuous / proactive innovation and across the organisation.                                                                                            f. From short-term performance/results focus  ………  to …….. both long-term + short-term thinking                                                                                                                                                    g. Gap between strategy making and execution ………. to ……… strategy making and execution are intertwined/happen together                                                                                     h. Focus on financial returns/shareholders ………. to ………..   focus on customers/wider stakeholders                                                                                                                                             i. Pursuit of long-term competitive advantage ……… to ……. pursuit of multiple, transient advantages                                                                                                                                               j. Employees and suppliers treated as resources ……… to ……… all treated as partners        k. Slow, linear approach to adopting changes ……….  to ………… fast, flexible, mixed-team approach to development

A matching (but not always fully suitable) part of the overall agile strategy process is to use an agile-type methodology for tackling and progressing individual projects and initiatives involved in or arising from the organisation’s strategy.  In particular, for example, an agile method can be used to help the development of new or improved products, services, or operational processes, or to develop sales/marketing initiatives, or to solve problems or plan changes concerning internal management systems or policies.  There are a few different versions of what is meant by an agile project (e.g. lean development, which focuses on the continual elimination of waste, and kanban, which focuses on reducing lead times and the amount of work in process), but the most common variant goes by the name of ‘scrum‘ which emphasizes the uses of adaptive teamwork to tackle challenges.

The typical, core features of a scrum-type project include appointing a dedicated and cross-functional team (of 3-9) individuals to work together full-time (or most full-time);  setting an overall goal but not having any detailed or fixed start-to-finish work plan;  working towards the goal in incremental steps involving short ‘sprints‘ of work;  daily short meetings of all team members to update each other and discuss ideas/solutions together; prompt testing/trialling of the outputs from each sprint with active input from the customer;  and the team itself deciding what outputs from each sprint should be taken as the starting basis of the next sprint to advance things further.  A series of sprints adds up to an ‘iteration’, at the end of which either a usable new/improved product or service or  process is presented to the intended customer, or a following major milestone is set if the project is part of a very large or complex development/initiative.

The key benefits/advantages of agile strategy – compared to traditional strategy – include:   i) an organisation is able to respond faster to environmental change and achieve more rapid innovation;  ii) avoidance of trying to predict/forecast the future and of the use of lengthy planning documents;  iii) increased staff engagement and motivation and minimal silo-thinking, as agile strategy involves almost everyone in an organisation;  and  iv) more opportunity for staff to use intuition and creativity to contribute to innovation, not just rely on the customer.

Further benefits brought by agile strategy are:  v) the value and productivity of individuals’ work is higher as there is rapid testing and feedback of their outputs;  vi) overall work is simplified and overall risk is reduced on account of the short, rapid bursts of work and the prompt feedback received;  vii) relationships with customers and suppliers are closer and more dynamic, as they are treated as co-creators/partners in the development process; viii) higher customer satisfaction, thanks to the early and regular feedback on delivered outputs;  ix) by the use of self-managing teams, senior management is freed of micro-managing projects and able to focus on higher-value duties (e.g. selecting strategic priorities and coaching staff);  and  x) the use of cross-functional teams broadens organisational experience for staff and builds mutual trust and cohesiveness.

However, an agile approach to strategic projects is not always appropriate.  There are a number of key issues to consider.  Perhaps most importantly, how suited is the organisation’s culture and management style to deal with decentralized decision-making and ‘loose’ innovation and change?   If the culture is hierarchical and not very empowering (e.g. staff are not well trained or coached by managers), a classic strategic planning approach is likely to be more apt.  Equally crucial, how suitably skilled, confident and experienced in acting as a self-managing team will the people working on the project be?  The lower the level of skills, the more supervision will be required and a less agile approach will be necessary.

Other key factors to consider include:  i) How stable and uniform/fixed are the company’s operating conditions or future customer requirements?   The less stable things are and the more opportunity there is to achieve some product/service differentiation in the marketplace, the more an agile approach will be useful;   ii) How easy/feasible is it to achieve prompt and specific feedback from customers after each sprint?  If it’s not easy, an agile approach is unlikely to work well.   iii) How large or complex is the overall project requirement?   When there are a small number of complex, major projects underway, the discipline of a plan-driven approach is usually a sensible choice.   iv) How risky or time-critical is the overall project?  If a very high level of assurance is needed, a traditional plan-based approach is likely to be best.  v) How many people are needed to complete the project?   A team of 10 can be agile, but a team of a few hundred cannot.

So, overall, agile strategy and traditional strategy both have circumstances when they are more suitable than the other.  But the distinctions between the two approaches are likely to increasingly blur, as the new digital landscape and fast-changing competitive conditions increasingly characterise all markets and sectors everywhere.  For the next few years, though, except for markets that are extremely fast-moving like high tech, I think agile is likely to be used more for handling individual strategic projects rather than totally transforming companies’ overall strategy process:  truly agile strategy requires a very supportive and empowering organisational culture which many senior managers will simply find far too daunting and difficult!   In the longer-term, though, – say within 5 years – agile strategy is likely to have transformed the vast majority of organisations’ total approach to strategic development.  The degree of adjustment needed will be huge and quite painful for many organisations, but the unstoppable pace of change around us will demand it!

As ever, if I can assist your organisation with any of the issues arising in this article, do get in touch.

Mike Owen.       E:        T: 01886 881092

Copyright of Owen Morris Partnership

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Keeping a senior team on course: what can cause a poorly-working team and how a simple, facilitated approach can help

As the Captain of your ship, you know that your senior crew need to work well together to be sure of getting to your target destination.  Through both difficult seas or calm seas, if your crew aren’t pulling together, looking out for one another, or responding to challenges as one, then you won’t reach your destination – on time or at all.

Few teams function as well as they could.  But the stakes get higher, of course, with senior leadership teams:  dysfunctional ones can slow down, derail or even bring down a whole organisation.  The danger signs are all too obvious:  individuals not speaking to each other, off-the-cuff jibes or insults, lack of agreement on crucial decisions, weak co-ordination of cross-functional projects, a tense atmosphere amongst the rest of the staff ….. and so on.

A key issue, of course, is that senior teams are commonly made up of a mix of strong, confident personalities.  Many executives have probably tried one or two ‘personality profiling’ tools in their career and know that they are a Myers Briggs ‘ENTJ’ or a Belbin ‘resource investigator’ or other such category description!  These profiles are certainly useful for helping team members to understand each other better but too often little action is taken in response.  Also, of course, for identifying ways to boost a team’s effectiveness, a wider set of issues needs to be considered beyond just team members’ personalities.

A simple approach that we use as consultants/facilitators centres not on looking at profiles but encouraging team members to open-up and talk freely about overall team issues, firstly in a 1:1 confidential discussion and then in a group workshop that we facilitate.  The aim, crucially, is that team members are helped to self-reflect, surface their feelings, raise questions of each other, and build up trust and willingness to resolve team issues together as a group.  The team itself can normally readily recognise and propose what needs to be done to boost team effectiveness:  there typically just needs to be a gentle dose of skilled, external coaching support!

So, what are some of the main causes of a poorly-working senior team?   Here’s a brief list of some of the main types of issue we often come across:

-The role, focus or powers of the team are not clear or fully understood.  Many senior teams, for example, don’t keep enough of a focus on strategic or cross-functional topics and get bogged down on issues that should be delegated elsewhere.

-The team is too small or too large or doesn’t have the right individuals on it in terms of a balance of skills, experience, ways of thinking or personalities.

-There is a basic lack of clarity or agreement in the team about the organisation’s strategic direction.  This could concern the company’s purpose, vision, values, future goals, specific strategies, or order of strategic priorities, for example.

-Responsibilities between team members have not been effectively organised or aligned.

-Not enough attention has been paid to defining and agreeing particular values, standards and behaviours (‘norms’) and practices for the team to follow.

-The ‘dynamics’ i.e. relationships between team members are poor.  This is a common problem and includes such issues as how individuals feel towards each other and how they interact together e.g: respect, trust, confidence, openness, willingness to disagree.

-The team does not have the right support or back-up to do its job  e.g: poor quality performance reports, poorly prepared business cases received for new proposals, lack of adequate specialist or advisory support, or poor action follow-up of the team’s decisions.

-The team does not have an effective leader – for instance, he/she is poor at inspiring, showing empathy, or acting as a role model.

-The team does not focus its time on the right issues or work efficiently when it meets.

-The system of incentives used for team members is not effectively aligned to encourage a team focus or reward collective performance.

-Team members don’t spend enough time reviewing/reflecting how well they’re working together and discussing ways of how they can improve.

Such a list can be seen like a ‘menu’ of issues to think about when considering how well a team is working.  The two most basic elements for a strong team are having the right people in the right roles and ensuring there is a strong and clear purpose and set of goals to work to.  Many CEOs see to this ‘structuring’ part of their job quite well but then focus the rest of their time managing operational issues and carrying out external duties like meeting clients.  However, they neglect at their peril the crucial ‘soft‘ issues also involved in team leadership:  in particular, establishing strong ‘norms’ for team members to follow, building trust and harmony between team members, and supporting/coaching individual team members.

Trust and openness in a team are particularly vital to boosting senior-level relationships.  Without it you have protectionism and lip service.  All the personality/behavioural profiles in the world won’t, in themselves, lead to this trust and openness.

If you aren’t familiar with these profiles, the most commonly used ones include:

Belbin:  Focuses on defining a range of particular ‘roles’ that people can adopt in a team e.g: plants, shapers, completer-finishers.   Originally introduced in the early 1980s.              –Myers-Briggs:  An in-depth personality profile which focuses on how we perceive the world and respond to it.  Done properly it involves a questionnaire and interpretive interview, although more recently an online version has been introduced.                               –DISC:  This looks at individual behaviour traits in terms of four categories – Dominance, Influence, Steadiness, and Conscientiousness – and also team dynamics.  The latest version of the model is one of the new kids on the block.                                                                      –NBI Brain Profile:  Also known as Whole Brain Thinking.  Gives a profile of how we and others think, and can be used in a variety of scenarios to improve relationships.

Such profiles themselves are not the problem.  It is rather that very often the findings are noted with interest – even fascination sometimes – by individual team members but then too often no changes are actually implemented at the team level and the questionnaires simply gather dust on a shelf!   In our experience, behavioural profiles are rarely embraced as a way of judging the optimum mix of roles and personalities required to make the team effective and then actually going on to apply that assessment in terms of assembling or adjusting the overall team to match.

And there’s another hidden consequence of these profiles:  they can sometimes constrain an individual’s thinking and performance.  They pigeon-hole.  An individual may believe that being a Belbin ‘resource investigator’ is all they are capable of.  Or they may believe they can only ever be a ‘Left Brain’.  And, worse than that, these profiles can become part of a person’s identity such that it constrains them from trying different ways of working:  “I’ll be no good at that because I’m a completer-finisher …..”

And none of that helps build trust.  What’s needed, instead, is a pragmatic approach that involves 1:1 face-to-face discussion and then coming together of the whole team to jointly discuss issues.  Trust is created by team members when they know and are true to themselves, their actions match their words, they are sincere about their reactions, they are open to feedback, and they accept their colleagues as (valued) individuals.

Our approach aims to develop this trust.  Some might say we’ve gone back to basics.  Rather than eliciting information about team members through the use of profiling, we meet each team member individually, on their territory, for a confidential 1:1 discussion.  We build rapport and develop a dialogue.  We create trust.  We establish what’s important to them, how they work, what they find challenging, what they think of their colleagues, what they’d like to say to their colleagues but don’t feel able to, what their understanding of the common purpose is.

And we obtain their permission to share this information at a follow-up workshop for the whole team, with the intention of creating openness, honesty, dialogue and trust within the team.  In this group workshop, the aim is to establish a fresh, reinvigorated sense of shared purpose and unity for the whole team.  It can often work well to do this as part of a wider strategic away-day or business planning/problem-solving programme – where the team needs to engage and discuss things together and agree a way forward.  The facilitator will be able to apply a careful range of tools and collaborative techniques to support the process.  Tools like De Bono’s ‘Six Thinking Hats’ – which you may know – to help ensure all the issues are put on the table early on:  getting all the barnacles off the boat first will reduce resistance, create speed and make the ship easier to steer!

The most successful team-building events that we’ve participated in have been ones where trust is created in the room and barriers come down.  Protectionist behaviour is replaced by supportive behaviour.  This creates a platform where the most common team-working issues highlighted above can be discussed openly, and then a shared vision can be agreed and embedded.  The environment is one where individuals let go of their own agenda because they understand that their success comes from the whole rather than the individual.  This leads to more effective performance and greater success.

To return finally to our maritime metaphor – when the wind changes direction and the ship has to respond carefully, having a crew that hoists the main sail together is likely to determine whether you harness the wind and speed ahead, or capsize!

If you are interested in strengthening trust and enhancing performance in your senior team, we’d love to hear from you.  Contact us for a complimentary ‘discovery session’ and we’ll talk to you about how the power of 1:1 and group facilitation could make a powerful contribution to putting some fresh wind into your organisation’s sails!

Written by Mike Owen, CEO at Owen Morris Partnership, together with my colleague Meriel Swain, executive coach at Sweet Success Coaching.

Contact for Owen Morris Partnership:

Tel:  01886 881092    Email Mike at:


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Leading an organisation with Purpose: is this the new route to success?

Purpose seems to be the new mantra for organisational success.  This urges that, whether you are a business, non-profit or public-sector body, you should fundamentally think of your organisation as existing to help people live better lives or improve society at large – rather than focusing on the narrow, internal interests of your organisation.  For commercial organisations, that means putting purpose before and beyond profit.  But what’s the evidence for this argument?  And how does the concept of purpose link to such issues as strategy, brand, leadership, and organisational culture?

Purpose seeks to go to the heart of what an organisation is about:  it addresses the fundamental question of Why an organisation exists …. what it brings to this world.   Purpose seeks to define a long-term, societally-based cause or aspiration to relate to and serve, rather than just serve a profit goal or other internal interest of an organisation.  The idea is to have an appeal across many stakeholders, not just one stakeholder group.  Of course, organisations can still have a range of motives like profit and customer satisfaction, but they are supplementary to the core primary driver of purpose.

What does a statement of purpose look like?   As the concept is still evolving, there’s not yet a wide field to point to and the traditional ‘mission’ and/or ‘vision’ statement still mostly prevail (for example, Oxfam: “a just world without poverty”).  But a few examples of some leading companies’ declared ‘purpose statements’ are:  Google:  “To organise the world’s information and make it universally accessible and useful”;  Telecom O2: “To connect customers with the people and things they want”;  Procter & Gamble:  “To touch and improve more consumers’ lives … everyday”;  Diageo (global drinks firm):  “To celebrate life, everyday, everywhere”.

These are helpful but, sadly, I think they are still more like slogans:  something as important as a purpose needs a fuller statement to be fully understood:  use a summary slogan, yes, but back it up with at least half a dozen sentences to explain it.  Point to one or two driving beliefs you have about how people’s lives and/or society can be improved and, secondly, what role or product/service you can offer to help bring about that improvement.  Companies can perhaps learn something in this regard from charities.

Purpose is not a wholly new idea, of course:  many charity and community-based organisations have existed since Victorian days and earlier that put social need at their core.  But what is new – in the last 15 years or so – is the wider belief, particularly amongst younger people, that businesses should also be more transparent, accountable and socially-focused.  This attitude has been driven a lot, of course, by increased popular criticism of Western economies’ failure to produce more equality of wealth and the many bank and corporate scandals (e.g. PPI mis-selling) over recent years.  But, interestingly, more businesses themselves have taken to putting social purpose at the heart of what they do (not just random ‘corporate social responsibility’ acts to look good) as they have found doing so actually helps their own performance.

So, what are the benefits of being ‘purpose-driven’?  Supporters claim several advantages:

Firstly, purpose engages employees extremely well:  people who work for organisations have an innate desire to contribute to something bigger, to find meaning in their lives and in their work, and working to help other people is particularly motivating.  Secondly, purpose gives an organisation’s external stakeholders – particularly customers, suppliers and partner organisations – a connection to the organisation and encourages support and collaboration.  Thirdly, when focused on a compelling bigger picture, purpose encourages innovation, agility and change inside organisations, as employees and others are less likely to focus on short-term considerations and defend the status-quo.

Two other advantages:  Purpose goes a long way to helping businesses build and improve trust perceived by their stakeholders, including regulators.  Also, in strategy terms, purpose encourages an organisation to think ‘big’, outwardly and with a more rounded mind-set, rather than just thinking about beating their direct competitors.

So, what is the evidence to justify the new talk about purpose?  To begin with, there’s some strong scientific backing.  Secondly, there have been some noteable academic studies on the subject, together with some empirical research.

Firstly, the science (which I quite like!).  Modern understanding of the brain reveals that it has two key areas:  the neocortex area which is responsible for our rational and analytical thought and language, and the limbic brain which is responsible for all our emotions/feelings and all our decision-making and behaviour.  If leaders lead by relying just on rational argument or giving facts and data, they are not appealing to the second area of the brain.  However, if leaders focus on presenting a Why for doing things (as opposed to just saying what is to be done or how) – as Purpose does – they appeal to humans’ emotional side and their leadership efforts will be more effective.  This subject was well set out by author Simon Sinek in his classic book ‘Start with why’.

Related findings from recent neuroscience studies indicate that providing people with a clear and attractive sense of direction and meaning for what they are doing – especially if it involves doing things for others – changes the chemistry inside people’s brains by releasing ‘positive’ chemicals like oxytocin.  This is the effect that Purpose has on people – especially when combined with social interaction between people.  The positive feelings produced can lead to an impressive mix of psychological and behavioural effects, including less anxiety, increased motivation, more willingness to get involved, better able to learn and concentrate, more creativity, and higher productivity.

Two noteable individuals who have written about purpose are former Chief Marketing Officer at Procter & Gamble, Jim Stengel, and Harvard Professor Michael Porter.  Stengel, in his 2011 book ‘Grow – How ideals power growth’, reviewed a 10-year study he carried out of more than 50,000 companies around the world and he concluded that companies that had based what they did on closely connecting with fundamental human emotions, values and greater purposes ended up out-performing their peers by a huge margin.  Porter’s contribution – also in 2011 – was his famous article that defined the core concept of ‘shared value’ and how it can work.  More recently, consultant authors include Kevin Murray, whose very recent book ‘People with Purpose’  (2017)  examined the subject well.

But the amount of actual empirical data proving the worth of purpose in terms of business performance is rather limited to-date, it seems.  The CIPD (Chartered Institute of Personnel & Development) did a survey back in 2010 of 2,000 employees entitled ‘Shared Purpose, The Golden Thread’:  it found that workplaces that had a sense of shared purpose rather than just a profit-based purpose did have better organisational performance overall – on both hard (e.g. profit) and soft measures (e.g. employee engagement).  Another survey was carried out by the EY Beacon Institute (with the Said Business School) a few years ago – The state of the debate on purpose in business:  that was more of a qualitative review of leaders’ attitudes to purpose and what benefits and challenges they saw in applying the concept, but the overall finding was that more and more CEOs are definitely taking up the purpose concept.

The CIPD research stressed that, to be most effective, the key issue is to make sure an organisation’s purpose is strongly aligned with its values, vision and strategic goals.  The four make up what could be termed the ‘leadership compass’ for an organisation and, actually, this alignment was found in the research to be more important than the specific purpose chosen.  Ideally, the aim is that everyone in an organisation should understand and be committed to what their organisation is about and they see what they do day-to-day (in their job) connects with that bigger picture.  That’s what shared purpose means.

Values, as all leaders know, are the driving beliefs, attitudes or principles that guide how an organisation should be run.  Common values are words like integrity, teamwork, customer-focus, respect, innovative and professional.  The problem, of course, is that often organisations don’t give much thought to their choice of values and leave them as a generic set of rather bland words that could almost apply to any organisation and without any supportive explanation of each value with examples of specific behaviours expected.

Vision can mean different things to different organisations, unfortunately.  Generally, though it means a picture of how an organisation would like to see things looking – for itself or change in the external world – at some point in the medium-term future – usually 3 or 5 years ahead.  Vision statements can sometimes be confused with mission (role) statements and I certainly don’t think an organisation needs both as well as a new ‘purpose’ statement!   So, I would advise combining the ‘traditional’ mission statement into a fuller Purpose statement (to describe the long-term, socially-based cause the organisation is concerned with + what sort of role/contribution it is making to help address that cause ) and have alongside that simply a Vision statement (to identify a more precise desired state of progress/development in the medium-term).  For both statements, summary statements are helpful, but they should be backed-up with fuller explanations.

Strategic goals –  These are the set of specific high-level, priority areas of action that an organisation will adopt over the next few years to achieve its defined Vision.  They will typically include a mix of some specific functional priorities (e.g. build up a better balance sheet and cost base) and a few general (enterprise-wide) themes e.g. increase productivity, become more customer-centred).  Together, they define the essence of the organisation’s overall strategy for the coming few years.

What else is important to get right to support a purpose-based organisation?  The issues of culture, brand, leadership style, employee management, customer service, innovation and performance are worth highlighting briefly:

Culture, of course, is very close and actually embraces values, but it also includes ‘the look, feel and how we do things around here’ in an organisation.  So, it covers areas like the physical environment in which employees work, technology and systems used, and working procedures.  All these areas must be aligned to support the organisation’s defined purpose.  For example, Transport for London (TfL) has over the last few years removed staff from behind glass screens at many stations to enable them to be more visible and available to help customers better:  this supports their aim to be more customer-focused.

An organisation’s branding must be right to match an organisation’s purpose.  This includes brand identify and communication style/tone but also, significantly, the particular messages and promises highlighted and promoted with the brand.

Leadership style and employee/HR management must, of course, support organisational purpose and values.  Suitable practices, policies and processes need to be defined and followed by all managers.  For example, if an organisation’s purpose centres around providing s high level of tailored advice and service to customers, an ’empowering’ leadership style is likely to be needed, supported by HR policies that include lots of training.  For all organisations, policies that ensure strong communication with and close monitoring of employees’ views and levels of motivation are vital.

Customer engagement – as with engagement with all stakeholders – is a key area to get right.  Providing a quality, reliable product/service is a basic, but the greater issue is to really understand customers’ needs, ensure strong communication with them, and increasingly, to provide a memorable service experience for them.  Offering 24/7 service across different channels is also increasingly expected.

Innovation needs to be driven by organisational purpose to focus on the right product, service and operational areas to improve and develop.  Successful, sustained delivery of purpose also needs matching innovation.

Finally, performance reporting.  In this area, traditional reporting focused just on a narrow set of targets/measures is inadequate.  What’s needed is a wider, more integrated reporting system that tracks not just progress towards your key ‘hard’ goals (e.g. revenue or number of clients) but also how you are managing the ‘softer’/intangible issues that influence purpose – including, notably, levels of engagement among employees, satisfaction amongst your customers, relationships with key suppliers/partners, your brand/company image and reputation, and your innovation performance.

Overall, my take on the above is that the move to purpose-driven leadership is here to stay and more and more organisations will embrace it.   In the short-term, I think the impetus will come mostly from the moral, normative argument and how citizens everywhere will increasingly demand businesses to be more socially-minded – and to demonstrate how they are so.  I think the empirical evidence base in terms of proven better business performance will take more time to build up, but in the meantime I hope the growing evidence from neuroscience will be noted more widely.  Anyway, for the foreseeable future, there will be enough of a challenge inside organisations in terms of learning how to integrate effectively all the different issues involved in purpose-led leadership.  Not easy!

As ever, if I can assist with any of the above issues, do get in touch!

Written by Mike Owen, CEO at Owen Morris Partnership.

Contact Mike at:   OR   Tel:   01886 881092

Copyright of Owen Morris Partnership

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How to avoid the problem of ‘group-think’ in your boardroom. But also how to deal with ‘hazy-think’!

Most leaders today are aware of the problem of group-think:  when the pressure for group consensus and cohesion overrides individuals’ readiness to speak up, critique a position or express a different opinion.  When it occurs in the boardroom it can be a major liability, effectively driving out good decision-making and problem-solving.  It can make group members blind to risks, bad ideas and flawed decisions.  In my years as a director and facilitator, I have seen it across every type of organisation and sector I’ve worked in.

But before I suggest a range of ways for limiting the effects of group-think, do you recognise the opposite form of group bias?  It doesn’t seem to be written about so much or even have a recognised label:  I call it ‘hazy-think’.  It’s when a group has no defined sense of direction or there is a muddled, incoherent position on an issue with a significant lack of harmony amongst group members.  The obvious result for senior teams is that their leadership is seen as weak, ineffectual, and often fractious.  In the UK’s political sphere, just think of the state today of PM Theresa May’s leadership on Brexit and the clear disharmony amongst her leading ministers!

In organisations, at board/senior level, the problem of hazy-think applies often with regard to what are the organisation’s key elements of strategic direction:  purpose, vision, goals, strategy, operating model and values.  Such things may well be written down in a carefully-drafted document approved by the board, but typically if you were to ask in any organisation each member of the top-team to spell out what exactly they understood such elements to be, the chances are there would be some worrying inconsistency or misalignment across the views expressed.  It can cause real confusion amongst executive managers in terms of how they should deal with some operating decisions, as they try to read the different signals from board members.

An obvious thought for how leaders can avoid either group-think or hazy-think is to get all members of their team or group altogether and thrash/iron out collectively the issues at hand and define actual consensus in clear detail – backed up ideally by an inspiring leadership style from the leader him/herself and with a readiness, if needed, to invoke sanctions against any team member who ‘steps out of line’ too much.

Of course, leadership get-togethers like this are often best supported by a neutral facilitator:  I do a lot of such work.  But dealing with the problems of groups really needs a much wider range of measures.  So, here are some particular measures I suggest to try and limit the bad effects of group-think, plus a few more actions specifically to deal with its opposite form.

a) The best starting point is to know how to recognise some of the chief signs of group-think, as you can then proceed to plan ways to mitigate its effects.  Firstly, look at the composition of the group itself:  if the background of group members is very similar or there has been no change in membership for a long period, those are danger signs.  So are the following signs in terms of how the group behaves:  a very dominant or over-persuasive group leader;  group discussion is short, rushed or narrow in terms of alternatives considered or how issues are assessed;  some team members avoid speaking at all;  some group members criticise or rebuke a colleague for giving  a minority view;  team members show little concern for contrary facts or views from people outside the group; and the group becomes complacent in thinking any decision it takes must be correct.

b) Value and increase diversity.  The more diverse your board/senior team is in terms of its composition, the stronger force you will have against group-think, because diversity sharpens all team members’ thinking as well as producing more varied perspectives.  Diversity should, of course, not just be in terms of socio-demographics like gender, age, occupational background and education level but, ideally, wider variables like cultural background, thinking style, ideas and social attitudes.  Boards with a mix of executive and non-executive directors should help to boost diversity – but only if the non-execs are recruited from a wider pool than where the executive directors themselves come from!

c)  Change and vary dedicated roles on the leadership group.  To help vary and widen board members’ thinking, ensure every member has a particular aspect / area of the organisation to focus on or champion (e.g. audit committee or champion for innovation) alongside their general role as a director.  However, try to avoid group members retaining any key, specific/allocated roles (e.g. board chair, treasurer, committee chair) for excessively long periods because this can lead to entrenched positions and views and a lack of fresh thinking in those roles.  Use fixed term limits for the chair and other senior roles.  Rotate certain roles periodically between different group members to widen individuals’ perspectives and experience.  Don’t allow the chair to pick his/her own vice-chair and be sure to have board members vote in secret, where needed, for key roles (not simply by raising hands in an open meeting, as I have seen often!).  Ensure also new non-execs receive comprehensive induction training to enable them to contribute well in their role.

d) Inform and support board discussions well with hard, objective data.  This is an obvious but vital step to reducing group-think.  Of course, all decisions involve people using some degree of subjectivity/judgement in the end and using data and analysis brings its own risks of bias like ‘confirmation bias’ (interpreting data in a way that does not upset existing beliefs) and ‘framing bias’ (presenting a string of data in a slanted or false way to create a desired narrative).  However, do what you can to bring in as much factual data as possible to the table to guide key decisions:  doing so will often disarm individuals who have unfounded, extreme or obviously biased positions.

e) Ensure board members are widely informed & exposed to diverse/external views.     To help stimulate wider thinking, management should provide directors with regular briefings and updates about what is happening inside the organisation (e.g. financials, operations, customer research, new product details) and outside (e.g. market trends, competitor news, new technologies).  External experts/specialists should be invited to present on key topics at board meetings to help contribute to discussions or reviews of key strategic issues.  Directors should meet often with customers and other stakeholders, backing up periodic formal survey research to track stakeholders’ views.  Also, look at establishing one or two ‘advisory’ boards/panels – for example, of clients or suppliers – to boost external input and provide for dedicated/extended consultation on issues.

f) Help board members to get to know each other and build team relations.  As well as formal board meetings, be sure to provide regular opportunities for members to socialise together and have time to get to know each other well at an individual level.  This is vital to help members develop mutual trust, confidence and respect – which in turn will encourage them to speak up and share different ideas and views in board meetings.

g) Define and promote an open ‘team’ ethos/culture for the board.   Like for any team, it’s a good idea if board members agree and follow a defined ‘code’ of expected behaviour and practice to guide how they will conduct their meetings and ongoing working relations.  This code should stress values like respect for openness, the right to hold different views, regard for new ideas/innovation, as well as guiding how members are to handle differences in opinion, make decisions and resolve conflict when it occurs.

h) Ensure there is a defined process and set of criteria for guiding decision-making.  To help avoid group-think, it is vital to have in place an objective, well-defined process for how proposals are to be made, how issues and alternatives are to be evaluated, and how decisions/choices are to be made by the board.  For example, it should be defined what minimum background data and risk factors need to be included in proposals and what sort of financial criteria should be applied to assess new investment proposals.  Such measures will go a long way to reduce subjectivity and bias in group decision-making.

i) Make use of suitable group-thinking/decision support techniques – to help open-up and structure your team’s discussions and their assessment of ideas/options.  Examples of common tools include brainstorming, force-field analysis. six thinking hats, fishbone diagrams, designating one or two individuals to play ‘devil’s advocate’ and the Delphi technique.  With any group discussion, though, from my facilitation experience, I would always urge group members – if time allows – first to work alone to think about the issue at hand and then come together for a group discussion:  group-thinking actually tends to come up with fewer ideas than individuals working alone, but a group is the best place for then evaluating ideas and converging on an agreed position.

j) Ensure your chair facilitates discussions in a neutral and fair way.  This critically includes defining the problem to be discussed at the start in a way that objectively addresses the core issue and avoids any implied type of solution;  the chair avoiding giving his/her own opinion on an issue at the start of a discussion or railroading or skewing the debate in a particular way;  preventing over-confident individuals from having too much ‘air-time’;  and reading people’s non-verbal behaviour during discussions to know when to prompt particular individuals to speak up.  A good chair will also hold over a group discussion if he/she can see that not enough ideas or alternatives have been raised or where further data or perspectives are needed to test or confirm positions taken in the meeting.  Of course, for discussions that can be expected to be contentious or complex or where the chair lacks facilitation skills or is known to have a strong opinion on the issue at hand, it’s best to ask another board member to act as chair – or use an external facilitator.

k) Promote general bias-consciousness amongst board members.   A healthy and effective board will have all members aware of the dangers of biased thinking and biased group decision-making and all will be on the proactive look-out for possible signs during their discussions, so the group can try and limit any serious bias taking effect.  Of course, this is a bit idealistic – one can’t prevent politics completely on boards – but it is worth taking action like providing some training on cognitive biases; the chair (with vice chair and/or company secretary) going through meeting agendas in advance to think of any particular biases that might arise for items;  and including ‘bias-free’ behaviour in individual directors’ role descriptions and performance reviews.  Of course, where non-exec directors are appointed to represent a particular shareholder or stakeholder constituency, expecting them to be fully bias-free is unrealistic:  in this case the company needs to rely more on having strong, objective processes and criteria for governing board decision-making.

And finally, how to deal with that notion of ‘hazy-think’ I mentioned – where your top team has no clear or agreed position on an issue or overall direction.  Of course, again, the most obvious answer is to get all group members concerned into the same room and thrash out  a consensus via a rigorous, well-facilitated discussion (or a number of discussions).  And, if necessary the chair must assert his/her position and declare what will be the final position.  But here are a few quick, specific suggestions to go with that basic approach:

-Where there is a wide mix of views across group members, it’s essential that everyone is given a full and equal opportunity to express their views and that extra time be afforded for the fullest, open discussion.  If necessary, divide up the topic or problem into separate sub-issues and hold a dedicated meeting for each of those topics.  For big/complex topics, it can also be a good idea to separate out the stage of thinking of ideas/alternatives from the stage of evaluating/making a choice and planning implementation.

-Don’t worry about not achieving 100% consensus i.e. everyone agrees on everything.  Life is not like that!  Most group members can live with a group decision they may disagree with partly (or even largely) as long as they feel they have been given a fair chance to input their view and make comment on others’ views.

-As referred to above, make strong use of hard data and evidence to inform your discussions, together with reference to views from relevant outsiders.  Neutral, factual information can go a long way to guiding and aligning group members’ final views.

-Ensure your board has a well-considered, balanced/varied topic agenda plan for future board meetings – what company secretaries call a ‘forward’ work-plan – so board members know there will be definite, upcoming slots when particular issues will be discussed.  In this way, directors will be less frustrated and contentious because they know they will have dedicated ‘air-time’ in future to give their opinions on topics they are keenest on.

-Ensure your board takes time at regular intervals to look back and assess the soundness of major, past decisions it took.  Again, this will help avoid frustration building up amongst individual directors as they can see that the organisation won’t be ‘locked-in’ forever to previous positions.

-Your board chair should ideally have a leadership style that is both inspiring and democratic – meaning he/she is concerned that all team members are listened to but equally he/she has the force of both vision and personality to influence the whole group in the most appropriate direction and limit disharmony.

-Check your company’s senior executive incentives and reward policies are working appropriately to foster co-operative team-working, rather than excessively emphasizing individual director performance.

Altogether, if not dealt with proactively, group-think and what I call ‘hazy-link’ can be serious impediments to sound decision-making on any board.  To deal with the two forms of group bias, it’s not adequate simply to make board members aware of such biases and expect them to adapt their behaviour because – as with cognitive biases generally and as I have described in other blog posts here – individuals are so largely unconscious of what drives much of their thinking and behaviour.  Rather, organisations need to design-in and require the use by executives of a range of objective decision-making processes and deliberate organisational policies that help mitigate for group bias.  I hope the above, specific suggestions are helpful in this regard.

If I can help your board or top-team with a review or improvement of how it deals with group-think and other forms of decision-making bias, do get in touch.

Mike Owen, CEO & Principal Consultant.    Owen Morris Strategic Partnership.

T:  01886 881092                E:

Copyright of Owen Morris Partnership, UK, August  2017

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Getting strategic change right: how to win support, re-organise well and be a great transformational leader!

Success today requires organisations to be strategically-flexible and effective at change.  Successful change often requires re-organisation, sometimes major transformation, and always sensitive management of people.  On these issues, three recent publications in the leadership field caught my eye.

The first is a recently published book: ‘Stragility:  Excelling at Strategic Changes’  by academics/consultants Professor Ellen Auster and Lisa Hillenbrand.  Although it lacks a full or original model on the subject, the book has attracted attention – not least, I suspect, because of its clever, one-word title – and it does contain some wise nuggets.  Its central argument is that too many leaders:  fail to update their strategies regularly enough in response to external change;  they don’t manage strategy and change in an integrated way;  they don’t manage change enough as a people-centred process;  and they tend to see change as top-management pushing action ‘down’ the organisation.

The authors urge leaders to develop four “critical” skills.  Firstly, rather than see business strategy as fixed and set for years at a time, leaders should instead follow a continual ‘sense and shift’ approach that focuses on closely monitoring what’s happening in the external world and then update/refine their organisation’s strategy in response.  Not exactly a novel view on strategy, but a welcome reminder.

Secondly, leaders should face up to, rather than ignore, the politics that inevitably exist in any change programme by building support proactively across stakeholder groups.  The authors suggest a five step process:  i) map the ‘political’ landscape;  ii) identify the key ‘influencers’ within each stakeholder group;  iii) assess influencers’ receptiveness to the planned change;  iv) mobilise influential ‘sponsors’ and ‘promoters’;  and v) engage influential ‘positive’ and ‘negative’ sceptics.  This is the best and most original part of the book (but a better explanation of these ideas was given in a previous article by Auster a few years ago – see my blog post of August 2013 here on Stratminder reviewing that article).

The third skill that leaders should develop is ‘inspire and engage’ rather than the more usual ‘tell and sell’ approach to change.  This means taking time at the start of a change project to communicate with people who are going to be affected by the change and, in particular, explaining ‘why‘ the change is needed and exciting people about a future vision based on appealing to their emotions, not just presenting facts.  It also means leaders helping people to understand, asking for their ideas and input (to develop a feeling of ownership of the change) and working through their concerns.  Where change requires a move from a current state which is settled but not stable or viable long-term, leaders need to persuade people by presenting fresh facts about the current state to show how continuing with the status quo is not acceptable/desirable.

The final skill is creating ‘change fitness’ – helping people to cope with the almost continual level of change seen in organisations nowadays by using efficient project management practices.   Tactics the authors prescribe include:  reduce the total number of change projects happening at any one time by bundling related projects together;  prioritising projects well;  and using limited-life task-forces rather than open-ended projects.  Other tactics suggested include:  make extensive use of pilots and prototypes before rolling out initiatives; ensure projects have contingency back-up plans;  ensure project plans have some early quick-wins and have frequent milestones;  and take time to look back at completed projects and learn what went well or not so well.  All good stuff, even if not new thinking.

The next, recent publication I liked on change dealt with the subject of re-organisations:  it was entitled ‘Restructure or Reconfigure?’ by strategy professors Stephanie Girod and Samina Karim in the March/April issue of HBR.  Based on research and experience looking at re-organisations over the last couple of decades, the authors propose some very useful and clear guidance on how to re-organise well.

Their starting point, though, is to distinguish between two different types of re-organisation (or ‘re-org’).  A ‘re-structuring’ involves changing the core structure around which resources and activities are grouped and co-ordinated:  companies commonly organise around function, product line, customer segment, technology platform, distribution channel, geography or perhaps a matrix combination of these.   In contrast, a ‘re-configuration’ involves adding, splitting, transferring, combining or dissolving organisational or business units without modifying an organisation’s core structure.

The goals for both types of re-org are often basically the same:  to improve operating performance, customer satisfaction or innovation.  Furthermore, the authors urge that companies need to use both types, rather than choose one or the other.  But the key is to use each at the right time, depending on the specific circumstances facing the company.

More specifically, if a company is operating in a fast-moving, quite open or turbulent marketplace, it’s best to go for regular re-configurations – involving reasonably quick, easy-to-implement, small-scale changes which can put the organisation in a better position to seize ad-hoc opportunities:  a re-structuring in this situation would be too slow and cumbersome.

However, if your market is facing a big disruption and a big shift in strategy is called for, piecemeal re-configurations are not sufficient and re-structuring should be used.  If your industry is generally quite stable and predictable, re-structuring is also more appropriate.  But don’t use restructurings too often, though, as they can cause a lot of turmoil and tension and – importantly – they usually need at least three to four years to bear fruit.  The general, overall rule should be: re-structure sparingly but be ready to re-configure more often in between restructurings (but not so often that chaos or change fatigue set in).

Both restructurings and reconfigurations work best when they are explicitly designed to build on an organisation’s competitive strengths or increase differentiation against competitors.  It’s also important to remember, of course, that with either type of re-org, when activities are re-organised, the resources needed to support them must follow.  But with a restructuring, additionally, many other aspects of the overall organisation should be changed too – and quickly – to avoid dysfunction:  these include management processes, IT systems, culture, leadership styles and people incentives/rewards.

The final, recent publication that caught my eye was an article in the HBR May 2017 issue entitled ‘What the Best Transformational Leaders Do’, written by two strategy writers/consultants S. Anthony and E. Schwartz.  They did a study of S & P and Global 500 companies and found that the leaders who achieved the most successful transformations – those involving creating new product/service offerings and business models to push into new growth markets – shared some revealing, common characteristics and a similar approach in how they led their transformation.

Such studies, of course, always need to be taken with a good pinch of salt because they involve wide, qualitative judgements, but I noted in this case the assessment was done by a combination of desk analysis of companies’ performance and then using a panel of ‘expert’ judges including luminaries like former CEO of Procter & Gamble, A.G. Lafley.  Their ‘top 10’ transforming companies included a cross-sector mix, ranging from stars like Amazon, Netflix and Microsoft to less obvious names like Danone and ThyssenKrupp.

But more interesting than such details are the general, five recommended principles and practices that the authors propose arising from the study:

The first principle is that the most successful transformational leaders tend to be individuals who are what the authors term “insider-outsiders” – that is leaders who have both some relevant, transferable experience from another sector or field as well as some knowledge/experience in their current organisation or its sector.  Furthermore, these leaders maintain an outsider/external perspective throughout the transformation journey they manage.  That perspective helps them see and explore paths to growth or improved success without being constrained by yesterday’s success formula.

The second principle is that successful transformation requires a “dual process” of two separate but simultaneous journeys:  one is developing and repositioning an organisation’s existing, core business, whilst the second involves actively investing in and nurturing the new growth business.  The classic exemplar here is Apple:  all those years ago Steve Jobbs launched a radically new type of consumer product cum content eco-system involving iPod and iTunes, but at the same time, whilst he nurtured that new growth engine, he reinvigorated the core Mackintosh business by injecting a new sense of thinking and design for what computers could be used for in the age of the internet.

The next principle is that successful transformational leaders actively use culture and values to help drive engagement amongst employees and create the best, supportive environment to favour the desired change.  For example, at Microsoft, in the first four years with Satya Nadella in charge as CEO, he converted a traditionally cautious, insular culture that involved large teams working for years on a major new version of a program into a new culture where dozens of new features and improvements were introduced every month (and no one would fully know ahead of time what they were).

Another principle is that leaders should develop and communicate a powerful story / narrative about the future.  The leader needs to present a stark but realistic assessment of why the status quo cannot continue and then build a picture of a fresh, exciting new vision of a better future and explain the path of how to get there.  Leaders should tell the story repeatedly, consistently, and persistently, telling different aspects of the same story to suit the different groups of people affected by the change.

The fifth and final principle recommended by Anthony and Schwartz is that transformational leaders should note that transformations typically need several years before their full aims are realized, so leaders should develop a long-term road-map for handling the journey and get started as soon as possible on the journey.  In this way, when likely difficulties or disruption do occur down the line, leaders will be more prepared and in a stronger position because they will have pushed forward more of the planned changes by that time and their planning well-ahead will help them deal with and move on from the disruption when they see it.

Altogether, I think the book and the two articles outlined here present a practical and valuable pot of good ideas and recommended practices to help with the leadership of strategic change.  They don’t give an exhaustive list of good practices, but they do show, in particular, that change is a complex, multi-faceted challenge that demands proactive and thoughtful management of both ‘hard ‘ aspects of change (e.g. structure) and ‘soft’ aspects e.g. people and communication.

As always, if I can be of assistance with change in your organisation, do get in touch.

Mike Owen

E:         T:  01886 881092

Copyright of Owen Morris Partnership

May 2017

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What does it mean to be a good ‘strategic thinker’? And how can leaders best encourage more strategic thinking across their organisations?

How good are you at strategic thinking?  Certainly, it’s a skill referred to in most job descriptions for senior execs.  But whilst much has been written about how to do strategic planning, I am always surprised by how there is relatively little guidance (books, courses etc.) on how to ‘be strategic’.  This is despite the fact that strategic planning typically happens only once or twice a year in organisations, whilst a true strategic leader needs to act strategically almost everyday.  So, what does it mean to be strategic and what can be done to foster more strategic thinking across an organisation?

The critical need for strategic skills has been highlighted by several research studies over recent years.  For example, in 2013 the Management Research Group completed a large-scale global survey amongst 60,000 managers in 140 countries regarding their views of effective leadership and it found that a ‘strategic’ approach to leadership was considered on average 10 times more important than any other behaviours (e.g. communication).  In 2015 a study by PWC of 6,000 senior executives similarly enquired about leadership practices and attitudes and revealed that only 8% – yes 8% – of the executives could be considered as ‘strategic leaders’ or capable of leading a transformation at their company.

It seems, then, that many organisations have leaders whose primary skills are focused just on running things operationally and essentially maintaining the status quo.  But, of course, in today’s turbulent and uncertain world organisations need leaders who have the know-how, experience and confidence to tackle ‘big’ and difficult strategic challenges.

Strategic thinking is one of the key ‘executive’ skills needed today by senior leaders and, actually, in my view, it is the primary, driving skill behind all the others (thinking drives choices, which drive actions, which lead to outcomes!).  Leadership studies suggest that those other skills include several that deal with getting things done through other people, viz:  setting a vision and direction;  leadership/strategy execution;  communication and influencing skills;  team/relationship/collaborative skills;  and change management.

Two other skills are technical skills:  firstly, there is ability/knowledge in one (or ideally several) functions of business e.g. finance, marketing;  and, secondly, knowledge/skills relating to technology/IT/digital/social media.  Another skill category includes general cognitive skills (e.g. computational ability, ability to deal with ambiguity) and key personal traits (e.g. integrity, level of drive/energy, courage, ability to handle stress, ability to prioritise).  A final category – which I think is more vital than ever – is a wider, multi-sector/external outlook based on experience beyond just an executive’s current organisation (including, ideally, some international/cross-cultural experience).

Strategic thinking itself is often simply taken to mean stopping to think about an issue (or situation) carefully or perhaps with a longer-term perspective.  But actually there’s more to it:  strategic thinking means viewing an issue with a multi-perspective mindset  i.e. from a range of different angles and reaching a decision or conclusion by following a considered, systematic approach.  It’s half perspective, half process.  More specifically, but briefly, the main component skills involved in strategic thinking include:

Analytical thinking:  breaking down the issue in greater detail to see things in greater depth and discern patterns and connections between the different aspects.               –Holistic thinking:  looking at a situation with a broad lens – not narrowly – to see things ‘in the round’ and identify the whole/big picture.                                                                           –Contextual thinking:  looking at the ‘edges’ of the situation, seeking to see how it connects with related or adjoining issues/people/factors.                                         –Future/longer-term thinking:  predicting future trends / considering how the issue today may look from a future perspective, not just how it looks here and now.                     –Creative thinking:  devising novel ways to view or develop the current issue or situation.  –Intuitive thinking:  perceiving a situation by drawing on insight, experience or feelings from inside oneself.                                                                                                                     –Multi-lateral thinking:  considering how other specific groups of people (stakeholders)may view the issue.                                                                                                                     –Ethical thinking:  considering what ought to be the case – from a moral, legal or regulatory case, for example.                                                                                                                  –Evaluative thinking:  interpreting everything gathered about the issue and judging/assessing overall what are the appropriate implications/conclusions to be drawn

Of course, not all these different types of thinking need to be called upon each time – which is a relief! – but they form a ‘menu’ for a leader to choose from depending on how much time is available and how important/complex the issue is.  Use of more thinking types will result in a richer canvass of perspectives and increase the chances of a more original or appropriate decision.  However, no executive is blessed with all these skills or all possible perspectives, so often strategic thinking is best done by a group.  Many tools and techniques exist to help each area of thinking and an external facilitator can be useful too.

Often strategic thinking is linked to making a decision and this is where adopting a  systematic approach comes in.  We all know what such a thing involves, but an example of a suitable process could be the following steps:   define the issue clearly;  identify the key background goals;  define some criteria for making a decision;  develop a range of options;  collect data for each option;  analyse and appraise;  select preferred option;  get approval/buy-in; and implement.  The above types of thinking particularly kick in for defining the focal issue, developing options and analysing/appraising those options.

Being systematic with strategic thinking also particularly means trying to prevent, or at least limit, the influence of a range of potential human cognitive biases that can (quite naturally) skew and distort a person’s approach to a situation or problem – very often without the person being aware of such influence.  Examples of major biases which you’ll know of include:  confirmation bias (the tendency to interpret information in a way that does not upset existing beliefs);  ‘groupthink‘ – where everyone in a group aligns their opinions with the perceived majority view to avoid being seen as the misfit;  framing bias – assembling a number of unconnected elements falsely in order to present an appealing but false narrative;  availability bias – creating a picture of the world by paying attention only to things that most easily come to mind;  and information bias – the delusion that more information always guarantees better decisions!

Several personal traits and behaviours are very helpful for good strategic thinking.  These include, for example:  a sense of curiosity; an ability to be open-minded;  an ability to cope with partial information and uncertainty;  an ability to deal with ambiguity;  flexibility;  patience; a positive and ambitious outlook;  an ability to be sometime playful/childlike in terms of experimenting with ideas;  a readiness to be bold and challenging;  and a concern for keep broadening and developing one’s own knowledge and experiences.

It’s important to see strategic thinking as a skill-set and approach that everyone in an organisation – not just senior managers – can practice and apply to help how they do their job and improve the decisions and choices they need to make.  Being strategic is not just about business or organisational-level strategy – making high-level choices about how to compete or major operating decisions – despite what the mountains of published books on ‘strategy’ might suggest!  Leaders of organisations need middle and junior managers to be strategically-minded just as much as themselves – in order to achieve high levels of collective performance.

So, what can leaders do to foster widespread strategic thinking in their organisations?  Here is a quick list of several measures I would suggest, for example:

Communicate and promote your organisation’s vision, mission and goals strongly across the organisation:-  Individuals and departments need to understand the broader organisational strategy in order to have a context for their own plans and actions.  –Distribute responsibility down and across your organisation:-  Senior leaders should push power downward, across the organisation, empowering people at all levels to make decisions.  Doing this gives managers the opportunity – and increased confidence – to develop their strategic skills and take risks.                                                                                  –Be generous and open in distributing information across the organisation:-  One of the major prerequisites of strategic leadership is having relevant and broad business information that helps managers elevate their thinking beyond the day-to-day.  So, not only should leaders keep staff informed of what is happening internally but they need also to provide regular news and information on external things like markets, regulations, competitors, new technologies etc.                                                                                        –Provide multiple paths and opportunities in the organisation for staff to raise and test ideas (rather than insisting on a person’s line-manager’s first approve!):  For example, a  suggestions board on the staff intranet and a monthly ideas incentive scheme for staff.     –Provide extensive opportunities for managers to meet each other – to share/discuss ideas and work together on cross-functional task-groups that look at company-level issues  –Encourage managers to plan regular time slots for reflecting and local strategic thinking with their teams.  Allow meetings sometimes away from the office:  thinking is helped by having fresh surroundings.

Promote a culture that values strategic thinking –  refer to in staff job descriptions, train people how to think strategically and recognise /reward people for evidence of good thinking (rather than just reacting to events).                                                                                  –Promote a culture that values learning, performance and innovation:- this includes a well-defined and motivational ‘performance management’ system for all staff.  Ensure the culture ‘allows’ people to make mistakes.                                                                                       –Ensure Board meetings include dedicated time to discuss strategic issues and opportunities – and invite senior and middle managers to join often to contribute ideas and solutions.                                                                                                                                   –Rotate managers at intervals around different departments and functions.                 -Ensure all directors and senior/middle managers meet regularly with customers and other stakeholders  – either external visits or at open-invite meetings at the company        –Keep your organisation’s operational systems and processes flexible and agile as much as possible – if not, managers will soon lose interest in thinking of new ideas!             –Connect (high potential) managers with a ‘strategic’ mentor/coach and encourage them to mix with peers in other organisations.  Encourage perhaps some to become a trustee of a charity.

Overall, strategic thinking is not a simple skill/process and that, of course, goes a long way to explain why it is in short supply in most organisations!   Sadly, too often organisational politics, culture, poor top-leadership or inappropriate policies get in the way and serious strategic thinking and change do not happen until either there is a crisis or an outsider CEO is appointed.  Short of such a radical situation, though, of course, an external consultant/facilitator can often play a vital role in helping the organisation to gain fresh thinking and change.  At the end of the day, however, organisations need themselves to cultivate internally amongst their own ranks more strategic thinkers.

I wish you well with strategic thinking in your organisation.  If I can help, do let me know.

Mike Owen    (E:    T:  01886 881092)

Copyright of Owen Morris Strategic Partnership.  January 2017

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How to create value for customers? A new model gives useful pointers and adds to existing insights about customer value marketing

To survive, the idea of ensuring ‘customer value’ is important for every organisation – whether you are a business or a non-profit.  Amongst many existing views and approaches on the topic, a new model caught my eye in a recent issue of HBR (Sep 2016).  Two of my clients also immediately liked it when I mentioned it last week.  It’s called the “Elements of Value” model, developed by consultants at Bain & Co (E. Almquist, J. Senior & N.Bloch).

Briefly, first, though, it’s useful to check what is meant by ‘value‘ and the related phrase ‘value proposition’, as the words often seem to be bandied about inconsistently.  In my view, ‘value’ refers to the range of potential benefits customers appreciate about a type of product/service (less costs incurred in obtaining that product).  And a ‘value proposition’ is the particular set of benefits designed by a specific provider aimed at a defined target market and presented with a distinctive appeal or approach (using appropriate branding and pricing).  In today’s competitive world, life is about designing attractive value propositions and then delivering via a suitable, cost-effective business model.

The new Bain model offers a framework to guide the search for customer value.  Based on research looking at 10,000 US consumers’ perceptions of 50 well-known US companies and then assessing the recent trading performance of those companies, the model breaks down customer value into 30 fundamental, generic parts, which it calls “elements“.  Inspired by the classic Abraham Maslow’s ‘hierarchy’ of human needs, the authors arranged these elements in a pyramid of increasing levels of impact on customers.  At the bottom are “functional” elements, such as quality and saves time;  above that are “emotional” elements like well-being and fun;  and then two further ‘higher-order’ categories.  Here’s the full list of the thirty elements:

i)Functional benefits:   reduces effort, avoids hassles, reduces cost, quality, variety, sensory appeal, informs, saves time, simplifies, makes money, reduces risk, organises, integrates, connects

ii)Emotional benefits:  wellness, therapeutic value, fun/entertainment, attractiveness, provides access, reduces anxiety, rewards me, nostalgia, design/aesthetics, badge value

iii) Life-changing:  motivation, investment for the future, affiliation/belonging, provides hope, self-actualization

iv) Social impact:  self-transcendence

The study found that companies that appeal to more elements tended to perform better (in terms of higher customer loyalty and faster revenue growth).  But they also found that the most powerful forms of value are the emotional, life-changing and social impact elements, with companies that appeal more on those types of element (particularly emotional benefits) doing better than those companies which appeal strongly just on functional benefits alone.  Furthermore, companies need to first satisfy on functional elements before they can win appeal on the other, ‘higher impact’ value categories.

Interestingly, of all the thirty, individual value elements, perceived quality was consistently found to be the top-ranking factor influencing customer satisfaction and loyalty.  Products and services must attain a certain minimum level on this front and no other elements can make up for a significant shortfall on that issue.  After quality, the most critical elements were found to depend on the industry sector.

The authors believe their model can help organisations to identify and explore better the true, underlying benefits of their products/services rather than just accept the immediate ‘on the surface’ descriptions customers might use.  For example, when someone says his bank is “convenient”, more precisely, this is likely to mean that value comes from a combination of the functional elements saves time, avoids hassle, simplifies and reduces effort.  For a professional association, the value of “networking” might be better understood as a combination of the elements connects, fun/entertainment, provides access, and affiliation/belonging.

The model can play a valuable role in helping companies to identify and explore which value elements are the most and least important for their industry and, from there, to identify how they stack up on those elements relative to competitors.  In terms of innovation, the model can guide companies in their thinking of new ways to develop, improve or differentiate their value propositions more strongly.  In particular, it prompts companies to consider opportunities to add new sources of value to offer to customers.

I like this model because it is simple and practical.  But, actually, it is just one of several approaches or perspectives that have been proposed over recent years on the topic of customer value.  To mention just a few noteable examples, briefly:

i)‘”Jobs to be done” approach:  Developed in the early 2000’s (Harvard’s C.M. Christensen et al), this urges companies to understand what customers want not (as was often the case traditionally) in terms of simply looking at their socio-demographic characteristics and direct purchase behaviour but, instead, by examining their surrounding context and, in particular, uncovering their ‘below the surface’ wider goals or ‘jobs to be achieved’.  The focus is on trying to understand what are the core, driving, benefits the customer is trying to gain or what pains/problems he/she is seeking to avoid.

ii)”Transient” competitive advantages:  Popularised by Columbia Business School Professor Rita McGrath in her book ‘The End of Competitive Advantage’, this approach argues that, given the pace of change in today’s world, traditional ‘long-term’ competitive advantages are no longer sustainable.  Instead, companies must develop the ability to rapidly and continuously address new, ad-hoc opportunities as they come across them and seek only “transient” (i.e. short-term) advantages.

iii)”Long tail” value marketing:  Originated by IT writer, Chris Anderson, this now well-known concept says that, given the extremely low marginal costs of selling on the internet, companies can profitability offer products/services which have value appeal to only tiny-volume, niche customer bases rather than only consider products which are going to be big-volume ‘hits’.

iv) “Freemium” products:  Also based on the same cost features offered by the internet, this approach from the last decade says that companies can afford to provide completely free – or for a very small charge – an initial ‘layer’ of benefits in the expectation that some customers will be attracted to go on to demand chargeable (very profitable) ‘higher value’ benefits separately available in the overall product/service offer.

v)”Minimum Viable Product”/Lean Development:   Based on the “Lean Start-Up” approach developed by Eric Ries, the idea here is to avoid the normally high degree of uncertainty, risk and slack that comes from developing a fully-formed and finished new product at first launch by, instead, launching and testing initially only a ‘basic feature’ product version and from there developing and testing progressive iterations of the product based on learning from direct customer feedback after each version.  It’s close to a concept called “design thinking” and definitely is part of the current wave of what’s called “agile” approaches to innovation and management.

vi) Service and brand experience:   This perspective argues that it is the intangible features/benefits that are most significant for any product/service offer nowadays, as opposed to any physical properties.  For service-based organisations, in particular, the stress should be on designing customer-centred service processes that run day-to-day with seamless and consistent quality across multiple touchpoints.  Equally, a company should promote a brand image based on emotional-type ideas and benefits to customers to counter the fact that physical product dimensions can be easier to copy by rivals and it can be hard to maintain a performance edge based just on periodic product innovation.

vii) Socially-based value:  This approach from the last eight years or so (e.g. “Shared value”, an article by Harvard Prof Michael Porter in the HBR Jan/Feb 2011 – see my post on this blog of May 2012 entitled ‘Think Purpose to drive your organisation forward’) urges companies to put benefits in their products/services which are useful to their wider communities and stakeholders, not just to satisfy their immediate customers and their own direct, financial interests.

There are several other perspectives too  – for example, the ‘customer big-data’ approach which stresses finding value propositions through deep analysis of customer data;  the notion of ‘social-media based value’ whereby customers show a great deal of concern about the social communities attached to a brand and what messages/ideas interactions between brand followers are revealing;  and the idea of ‘value co-creation’ where companies work closely in partnership with particular customers and/or even competitors to design and/or deliver value together.

And just one more, to finish – as, in my view, it is probably one of the biggest ‘game-changers’ in business over the next few years.  It’s how value creation will be crucially influenced by and will need to work with the ‘internet of things’ and the spread of ‘smart, connected products’.  An arresting fact, for instance, will be how companies will be able to change the functional performance or suitability of an existing product/service already provided to a customer via direct, web-based ‘re-programming’ of that same product based on direct feedback up to then from the product itself, rather than having to re-sell a whole, new product to that customer.

Altogether, then, I hope you’ll agree that, whilst the new “elements of value” model I have outlined above is a welcome, very helpful framework, it is but one of the many concepts and approaches around that touch on the subject of how to create and develop customer value.  Which reflects the key point, of course – which I make regularly in my posts – that strategy is not an exact science and much more a matter of original thinking and applied judgement!   I wish you well with strategic value creation in your own organisation!

As ever, if I can be of assistance, please do get in touch!

Mike Owen

Copyright of Owen Morris Strategic Partnership.

November 2016

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