Why Strategic Clarity is Your Biggest Lever for Growth
June 2020
Early in my career as a product leader, my CEO gave me a book that not only had a tremendous impact on my professional growth as a team leader, but also taught me some powerful lessons on leading an entire organization. 'The One Thing You Need to Know' by Marcus Buckingham covers insights on how to be a great manager, how to be a great leader, and the difference between the two. A great manager wakes up every day focused on the individual team member, and how to help her be successful in her work. Great managers are building deep, individual relationships with their team members, closely observing their behaviors and output, identifying their strengths and then putting them to work in areas of their strengths. A very noble calling, and one that has tremendous impact on an individual's growth, not just professionally but in their personal lives as well.
A great leader, by contrast, is not deeply concerned about each individual separately, but rather in rallying the entire team or organization as a whole to a better future. Great leaders inspire people to act, and do so by focusing on the common needs that all of us share. Buckingham references the work of anthropologist Donald Brown, who studied and compiled a list of human universals across all societies, 372 in all. These human universals, that are shared across all people, can be grouped into five fear categories that translate into corresponding needs:
The Fear of Death - The Need for Security
The Fear of the Outsider - The Need for Community
The Fear of the Future - The Need for Clarity
The Fear of Chaos - The Need for Authority
The Fear of Insignificance - The Need for Respect
While a leader can use, or misuse, any of these fears and their corresponding needs to motivate others towards a common goal, the most powerful lever that is used in successful organizations is satisfying the need for clarity. Clarity in why we exist as a company, where we are going, why we will win, what our current progress is, and what are our next steps. This is known as Strategic Clarity, and unfortunately it is not easy to find in most organizations.
In today's highly uncertain world, where sweeping changes are occurring at an ever-increasing rate, fear of the future is the main driver of anxiety in many professional’s lives, eating away at their ability to creatively solve problems and think logically. In addition, several recent studies show how people are deeply craving meaning and purpose in their work, and how their work is positively impacting the world around them. Strategic clarity reassures, motivates and inspires your organization to action, and drives everyone’s efforts towards a common end goal.
When resources are tight, and they always are, you want everyone pulling in the same direction to maximize return on your organizational investment. Elon Musk conveyed this best in a conversation he had with Dharmesh Shah in 2017. Not surprising for a smart guy with a degree in Physics, Musk likened people's impact in an organization to mathematical vectors, consisting of both magnitude and direction. The sum of all of these individual vectors translates into the progress of the organization as a whole. When everyone is aligned through a clear and well-communicated strategic direction, all of their efforts are additive towards a common goal of moving the organization from the current state to where you want the organization to be in the future. However, if strategic clarity is not delivered and the purpose of the organization and its goals are not understood, then people's efforts in the organization are misaligned. This misalignment leads to much slower progress in moving the organization towards its goals, or worse case, moves it in another direction. For those who might not recall the definition of vectors from your Trigonometry class, the graphic below created by Rand Fishkin of Sparktoro does an excellent job in visualizing what Elon conveyed.
Your Strategic Foundation
For small business leaders operating in today's highly competitive and uncertain markets, strategic clarity is your biggest lever for growth when you realize its power in bringing everyone's efforts into alignment towards a common goal. This clarity begins with your organization's strategic foundation:
Mission: Why do we exist?
Vision: Where are we going?
Values: How are we going to go about it?
Strengths: How will we win?
Once this foundation is set, it drives the Strategy (the next steps we take to move us towards the goal) and Score (our progress). The figure below shows how all of these come together to provide your organization the clarity it craves to understand what is important, why and what to do next.
To provide strategic clarity to your organization, we should not forget that the most important part is clarity. As Buckingham points out: if you want to use balanced scorecards, keep them in the executive boardroom. Your organization needs your strategy and strategic foundation to be easily understandable in addition to inspiring and elevating, so keep it simple, to the point and easy on the eyes when presenting in quarterly updates to your organization.
To develop your strategic foundation, put together a small planning team that will conduct executive interviews and surveys to selected individuals or the entire organization, both driven by key questions to discover insights that will be used in workshops to draft up the strategic foundation document.
Mission: Why do we exist?
Your organization's mission answers the existential question of why the organization exists and its core purpose. It is written in the present tense, and as Peter Drucker so wisely said, it should be 'short enough to fit on a t-shirt.' It should be based in core competencies, inspire and motivate your people, and be realistic. Key questions to ask in formulating your mission statement are:
Who is our customer? Be very specific, and clearly define the one customer type that your organization is focused on serving the best. As an organization, it can be overwhelming to serve all people all of the time. This singular focus not only motivates your people as they get a deeper understanding of the specific person they are serving, but also drives customer intimacy that endears customers to your brand.
What is our value to this customer? What do we do that makes our customer's life better? How are they better off with our product? Nothing is more impactful to meaningful work than knowing how our work is making the world a better place.
Some examples of effective, customer-centric mission statements are:
Starbucks: To inspire and nurture the human spirit - one person, one cup and one neighborhood at a time.
Google: To organize the world's information and make it universally accessible and useful
Zappos: To live and deliver WOW
Twitter: To give everyone the power to create and share ideas and information instantly, without barriers.
Out of all the strategic foundation pillars, mission is the most important as it answers the fundamental question of ‘why’. It brings clarity to what we're all here to do, connects individuals through shared purpose, and enables effective decision making aligned to the organization’s core purpose. Don't skimp on this one, and make sure you deliver on a statement that is sincere and authentic in order to inspire, not cause eye-rolls.
Vision: Where are we going?
Your organization's vision paints a picture of where you want to go. It should be vivid, clear, and audacious with a time frame of 3 to 5 years. Using your mission statement as a guide, it should be based on the organization's core purpose. The difficulty in developing your vision comes from contradiction. It should be bold, but not so much that your organization will not believe it is even remotely possible. It should paint a detailed picture of the future, but yet be abstract enough to accompany changes the world will throw at you during the time period. Some good examples of vision statements are:
Alzheimer's Association: A world without Alzheimer's disease
Nike: Bring Inspiration and Innovation to every athlete* in the world (* if you have a body, you are an athlete)
Amazon: To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online
Southwest Airlines: To become the world's most loved, most flown, and most profitable airline.
Although all of the vision statements above are inspirational and motivating, Southwest Airlines has a bold vision that can actually be measured and enables the ability for the organization to track and report on its progress towards the goal.
As vision is important in that it places a target of where to aim, it can be more detailed and divided into both a vision statement that is easy to remember, and a narrative that provides additional clarity around the future picture of the organization. The more clarity that can be provided of what the future state of the business is desired to be, the more context your organization has for its decision making to get you there.
Values: How are we going to go about it?
Values are the core beliefs of the organization, and act as the guiding principles that everyone in the organization will adhere to as it executes on its objectives. Although the other pillars may change over time due to changing market dynamics or competencies, the organization's values do not. These are deeply held convictions and explain what you hold dear. The organization's values are important in the development and ongoing maintenance of the corporate culture, and therefore drive what type of people you recruit, train and promote. Values are best expressed as short phrases that can be easily recalled. Some examples of corporate value statements are:
Google (a few selected value statements):
Focus on the user and all else will follow
Its best to do one thing really, really well
Fast is better than slow
You can be serious without a suit
Great just isn't good enough
Starbucks
Creating a culture of warmth and belonging, where everyone is welcome
Acting with courage, challenging the status quo and finding new ways to grow our company and each other
Being present, connecting with transparency, dignity and respect
Delivering our very best in all we do, holding ourselves accountable for results
It is important to make sure managers throughout the organization lead by example and reinforce these values with their teams, not only using them in performance reviews, but in coaching and providing feedback to their team members. Human Resources along with managers should also construct interview questions around these values to ensure the organization is hiring the right people to build the desired culture.
Strengths: How will we win?
Strengths, otherwise known as competitive advantages in this context, are statements of what the organization is best at. Painting a compelling vision of market leadership is a great start, however outlining what specific and differentiating strengths the organization has will drive credibility of the vision. SpaceX has an implied vision (within their mission statement) of enabling people to live on other planets. With a competitive advantage in building the most advanced rockets in today's world, their vision seems realistic in our lifetime. However, if Ford Motor outlined a vision to enable life on other planets, not many people within the organization would be on board as being good at building cars does not necessarily translate into space travel.
People are led by confidence. Clarity in the vision aims everyone at the target, while articulating the company's core and differentiating strengths drives confidence throughout the organization that the goals are achievable. Another key reason to highlight the competitive advantages is to drive decision making that will protect and grow them. Without this clear understanding, budgeting and resourcing decisions could be made that will weaken an area of required differentiation that will make the vision unobtainable.
Competitive advantage statements can also be aspirational, but in the shorter term. Stating that you will win through unmatched operational excellence does not have to be true today, but something that the organization realizes that it has to achieve to make the vision a reality.
Now that the strategic foundation is laid, we turn our attention to guiding the organization through the next steps.
Strategy and Score: What's the plan and how are we doing?
Once the strategic foundation is laid through communicating a clear mission, vision, values and strengths, an articulated strategy aligns the organization behind the near term objectives and the score highlights the progress. While the strategic foundation is focused on inspiring, motivating and driving confidence towards the long term goal, the strategy is focused on the near term: what action do we need to take today to move closer towards our long term goal? Strategic objectives are typically set annually, with quarterly milestones that are measured and reported to the entire organization. Each team within the organization uses these strategic objectives to set team and individual objectives, thus bringing into alignment all vectors to drive towards the vision as a unified whole.
Quarterly business updates by leadership to the organization should highlight progress, and show where the organization is succeeding and where it is not and needs to improve. Clarity is absolutely key. This should not be a 80-slide deck or a 20-page document, but a simple and visual representation of where we are, what we are doing well, where we need to improve, and what we are doing next. Clarity is amplified through simplicity. The strategic foundation should be reinforced at each of these meetings and continues to operate as the North star in driving the organization forward towards its vision with purpose.
Aligning your organization for successful growth through strategic clarity is not an easy task. Making decisions on what is most important, and figuring out how to communicate it in the most simple and succinct way is difficult, but worth it. After you have gone through the exercise once, you will find that it makes virtually everything else easier and faster. It is the touchstone for all decisions going forward, and provides your organization a framework for making effective decisions in a rapidly changing market environment. Keep it customer-centric, simple, and inspirational. And when you see or hear aspects of the strategic foundation being talked about in the hallways, used in pitches for development or operational projects, and in performance evaluations, you know you've been successful in embedding it into your culture.
