The question that Cynthia Montgomery poses at the beginning of her Harvard University Entrepreneur, Owner, & President Program [“EOP”] for business owners and senior executives is simply “Are you a strategist”? Why? Her mission is to take her class of executives and show them, through the many case studies she has written about in her book “The Strategist – Be the Leader Your Business Needs”, how to create a sustainable strategy for you company. So what is a strategist and why become one?
A strategist is not a “super manager” as the author calls it. A super manager is an “action-oriented problem solver for whom difficulties are daunting but solvable challenges”. The biggest risk of believing in the myth of the “super manager” is that super managers “tend to focus on what they can control and ignore what they cannot control”. Put another way, the Nobel Laureate Daniel Kahneman, in his book “Thinking Fast and Slow” may have called this the “inside view” – the tendency to ignore outside data to engage in independent decision-making. Super managers choose to ignore fierce competitive outside forces as not as important as their management inside capabilities to overcome them.
So how do you “become” a strategist? The author believes that you must first begin with creating a company’s “purpose . . . why it exists, the unique value it brings to the world, what sets it apart from other companies, and why and to whom it matters”? At its core it’s your sustainable competitive advantage. One way to determine if you have a core purpose is to ask yourself “if your company disappeared today, would the world be different tomorrow”? Once you ascertain your core purpose you then must plug in each component of your company and ask yourself, in a binary fashion, does the specific business activity advance your purpose or does it detract from your purpose of creating a real system of value creation. If it detracts from your purpose, stop doing it.
So how do you “own” your strategy? The author calls it the “strategy wheel”. It consists of your Products and Target Markets, Marketing and Service, Sales and Distribution, Manufacturing, Procurement, Human Resources, Information Systems, R&Ds, and Finance. Each “system” needs to be impacted by the center of the wheel – your core purpose. To digress, your “purpose” answers the question of why you exist. Your “strategy wheel” is HOW you are unique in each component. Without a core purpose tied to each component of your strategy wheel activities, you will be ineffective.
To be a strategist you must be a leader. At least once a year a company’s board of directors or LLC managers/members meet to look back at what happened over the past year, and then look forward to how it wants to operate the company next year. Too often it is a mechanical exercise that involves reviewing the financial statements and tax considerations but not much else beyond asking how you can save money. A good way to avoid this mechanical approach is to first ask yourself “are you the company strategist”? If so, then ask what is your company strategy for a different tomorrow?