Yet, according to Donald Sull’s research in the March issue of HBR, almost half of top executives cannot connect the dots between their company’s strategic priorities; and two out of three middle managers say they simply do not understand their strategic direction. McKinsey and Company reported similar findings from its Organisational Health Index as did Timothy Devinney at Australia’s University of Technology in a recent experiment. Taken together, this research points to the fact that most leaders just don’t get what their organisations are trying to do.
As bleak as that sounds, leaders can avoid the problem by borrowing a technique from teachers: “compare and contrast.” As educational researchers have found, it is perhaps the single best way to teach new concepts.
Here’s how it works. Say you’re trying to teach a child what a rectangle is. It would be a mistake to only show the child a red plastic rectangle, and identify it as a rectangle, because she might erroneously assume that all rectangles must be red or that color is related to shape.
So you’d need to make finer distinctions. The best approach would be to teach the child that a yellow book and a white window frame are also rectangles (compare), whereas a red ball and a maroon can of beans are not rectangles (contrast). As a result, our burgeoning geometry student should be able to generalise that understanding to new situations. She’ll easily identify a television as a rectangle, but not a car tire — even though you never said anything about TVs or tires. She gets it.
Psychologists have found that the same type of compare and contrast technique is also a superior method for teaching adults how to apply abstract business principles to new situations like complex negotiations.
For example, if you wanted to explain something like the “foot in the door” sales technique to a business school student, your best bet would be to describe how a door-to-door vacuum salesman begins a sales call by requesting permission to examine the home-maker’s cleaning products before making the much bigger request to purchase a vacuum cleaner. Then ask the student to “compare and contrast” the vacuum salesman’s approach with a peace negotiator’s tactic of asking for a small and relatively unimportant parcel of land before requesting a large payment of reparations. By doing so, the students will grasp the general principle behind the “foot in the door” technique, and in the future they’ll be able to apply the same principle to completely new situations like business mergers or salary negotiations.
Isn’t that exactly what a strategy should do — help teams and leaders decide the right thing to do in the face of new threats and opportunities?
The problem is that most widely used planning processes like management by objectives and balanced scorecards overlook the contrast piece of the compare-and-contrast equation. They do a fine job of requiring leaders to spell out what the strategic objectives are, but they rarely require leaders to get clear about what they are not. As a result, most leaders score a C- in strategy comprehension.
Does this sound familiar? If it does, I would suggest adding a waitlist to your planning process — a list of objectives that you’ll put on hold for 3-6 months.
Let’s assume your planning process has revealed a list of key growth drivers including the launch of next generation product lines, enhancing the quality of existing products, boosting employee engagement, cutting costs, tightening up the supply chain, and many others. Before your team jumps into divide-and-conquer mode where everyone lists all the ways they can contribute to those priorities, first discuss which of those priorities should go on your waitlist. Even though all these priority initiatives will impact your profitable growth this year, challenge yourself and your team to put at least half of them on a waitlist for 3-6 months.
This isn’t just about trimming your list of projects. Evaluating top priorities side-by-side to make mutually exclusive, now-or-later distinctions will encourage your team to use comparative learning. If your team puts launching next generation product line on the waitlist, but leaves enhance quality of existing products on the list of near-term priorities, that contrast makes an invaluable distinction. You have suddenly clarified that even though your team or organisation absolutely values innovation, this year’s strategy is actually focused more on innovating the core product lines rather than the new products. This is a subtle, but important nuance.
This is precisely what Howard Schultz achieved in 2008 when he pulled Starbucks’ highly profitable breakfast sandwiches from store shelves for nine months. By doing so, he instantly clarified for board members and baristas alike exactly what he meant with the new strategy of “reasserting our coffee authority.” By pulling back on breakfast sandwiches while doubling down on research and development of new coffee creations, he engaged the whole organisation in comparative learning. Everyone suddenly understood that all sources of revenue were not equal in this strategy. It clarified for store managers that “because it makes money” was not justification for straying from the coffee core.
You can accomplish the same thing with waitlists. Slowly but surely, through this repeated act of comparing and contrasting top priorities, a common theme will begin to emerge. In the minds of your team members, the hodgepodge list of projects begins taking shape as a bona fide strategy. All of the sudden, they get it.
To be sure, execution will always be a multi-faceted beast. No one trick or tool will tame it. But a waitlist can give your team a much better grip on the reigns.
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