Quality Through Collaboration
Because, in practice, so many organizations find it difficult to determine and communicate strategy, we use the methods of collaborative leadership to ensure that work on strategy, its implementation, and communication is of high quality and includes a broad range of considerations and what-if scenarios. Collaboration requires an open environment, one that encourages the free flow of ideas, hears the ideas, and passes no judgments — so leaders can truthfully consider the factors that lead to sustainable advantage and those that do not. This collaborative work must be done with decision makers and leaders from all parts of the enterprise. As a group (and in an open, high-trust, non-blaming environment) the decision makers and leaders brainstorm what they know about the market, market needs, internal capabilities and weaknesses, long-term goals, action plans, et cetera. Through this collaboration process, each department starts to see where how it aligns to the strategy and its role in supporting the strategy. Each leader then volunteers for which strategic and tactical elements they will own and implement and by when. Ideally, this work on strategy is widely dispersed through the organization so that each person can make decisions aligned with strategy. Leaders accomplish this by cascading the strategic and tactical decisions and tasks to their functions and departments.
Collaborative leadership requires first filling the organization with the right people — those with integrity, motivation, and capacity. Then, implement the principle of Trust First! If you can’t trust the people in your organization, why are they there? Let teams tell the leaders what to implement based on their participation in the collaboration process of creating strategies. Finally, the most difficult step, stand back and let the teams deliver. These collaborative leadership methods are essential in today’s rapidly changing, competitive marketplace. The agile enterprise uses a collaboration process to regularly assess and revise the implementation of strategy. Leaders meet regularly to assess the alignment of projects with strategy. What is regularly? It depends on the velocity of the marketplace. It may be once per month, every other month, or once per quarter. In our experience, it should never be longer than once per quarter.
Aligning on Purpose
To further help determine strategy, I use an approach (Process Purpose) that evaluates the business purpose of business activities. To use this approach, evaluate all business activities in two dimensions. First, the extent to which the activity differentiates the organization in the marketplace. Second, the extent to which the activity is mission-critical to the organization. These combine into the four activity types and purpose shown the next diagram.
As a general rule, the activities in the upper-right quadrant are those that the organization uses to gain market share and create a sustainable competitive advantage. The activities in the lower-right quadrant are those that keep us in business. Sometimes it is easier to define strategy by first segregating business activities according to the purpose. The purpose of the upper-right activities is to differentiate in the marketplace. There should be a direct link between these activities and strategy. This linkage makes is it simpler to define strategy after identifying the differentiating activities. The purpose of the lower-right activities is to achieve and maintain parity in the marketplace. Many of us treat parity activities as if they were differentiating. While an accounting system is essential to doing business, it is unlikely that an accounting system will win customers or gain market share (unless the business builds and sells accounting systems). It would not make sense to design a marketing campaign that proclaims, “Buy our cars (or jets or LCD monitors). We have the world’s best accounting system!” Most business activities fall into the parity category. The purpose of parity activities is to achieve market parity. As a result, an investment in projects, designs, or ideas that attempt to make these activities better than they should be are an over-investment. For example, the customization of the purchasing system.
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