If the company is an orchestra, strategy is the symphony, and the CEO is its conductor

For a while, I have been toying with writing an article on the importance of strategy for the success of an organisation. I didn’t want to re-iterate a statement that is widely accepted, but to delve deeper into why many corporate leaders get it wrong when it comes to articulating their strategy and how to implement it. After reading a Harvard Business School article titled "Many Strategies Fail Because They're Not Actually Strategies", it hit the nail on the head. I thought I will put to put pen to paper on my perspective.

The key message of the HBS article is that strategy is a set of choices of what the company or department does. What companies and leaders end up creating are either statements that read as targets and goals, or a catch-all statement that lacks focus with the aim of doing everything under the sun related to the sphere of their line of business

I will use the analogy of an orchestra to share my perspective, because defining a strategy is an art. It requires creativity, iterative development, many moving parts that need to work in complete coordination, it needs someone to actively lead everyone forward, choosing when each parts takes either a leading or a secondary role, and ultimately when it all works well it is a very beautiful.

What are the music types choices available for your orchestra to play?

When a conductor is starting an orchestra, they have to decide the type of music they will play. They have to choose whether to take an existing symphony and play it as is, develop on an existing symphony, or create something new. They need to assess what listeners may be interested in and connect with. They will have endless options but they need to start by exploring and understanding their different options.

To choose and shape your strategy, you need to have a thorough understanding of the market situation that you intend to compete in - It’s what most leadership teams or consultants will do at first. Even if you intend to launch an innovative product, you still need to understand the dynamics of what problem you are trying to solve for your customers and what substitutes they have in the market.

Where leaders fail is they look at this step as a hygiene factor, tick in the box and jump straight to decision making. Truly debating, discussing, understanding the market dynamics and market gaps, and most importantly where you can compete as a company to maximise your returns to stakeholders (moving beyond just shareholders) is one of the fundamental steps in formulating a strategy. Without this rich debate, comes a lack of clarity on the different options that are available for you as a company.

How good are the different musicians in your Orchestra, and what instruments do they play?

Assuming the conductor is not starting an orchestra from scratch, they will need to reflect on the different musicians. What instruments can they play, and how good they are? If they are starting from scratch, then this makes it more challenging but also provides a clean slate to start with.

As a company or a department, you need to understand what your capabilities you have and how good you are. This requires a true and honest reflection on:

1. How good and mature are your capabilities relative to companies in the same or different industries?
2. Are your capabilities unique to you, or are they also available / easily replicated by others? To quote Warren Buffet, do you have a moat around any of your capabilities?

Were leaders fail here, is to over estimate the maturity and/or uniqueness of their capabilities. This point cannot be emphasised enough - especially for leaders who struggle to find the time to look outside and see where their industry is evolving. It is very easy to assume that what has made you successful over the years will continue to deliver the same - it might be the case but you cannot make that assumption without thorough diligence.

Choose the type of music you will play

A conductor, having assessed their options and the capabilities of the orchestra musicians, can make a choice of the type of music that the orchestra will play. They may not be able to deliver perfectly immediately, but ultimately you have a clear goal of where you want them to get. 

As a leader you need to make a clear choice of your strategy and focus having assessed the different options and capabilities of your team (this is better articulated in the HBR article). This step also needs to be a very rich debate between the leadership as a whole. Lacking a real understanding and discussion on the different options, and the capabilities, you end up with strategies that are one or more of the following:

• an aggregate of all findings without any real focus,
• a continuation of prior years' strategy,
• misaligned and incompatible,
• difficult to articulate the rationale behind

What instruments do you need for your concert? 

Having figured what music to play and the capabilities of the musicians, the conductor will have to assess the gaps. Are their new musicians to recruit as some instruments are missing, or do some of the existing musicians need additional training? In an ideal world, a conductor would hire the best at each instrument and provide them with the best equipment. In reality, assuming a finite budget and an expectation to be profitable, the conductor will have to figure out which instruments are more critical than others, which musicians and equipment they will have to invest more on over others, and which new musicians they will need to hire.

Once you established where you want to go, as a company, you need to reflect on your own capabilities to figure out how you can get there.

1. The maturity of each capability or asset in the company
2. How good is the capability relative to companies in the same or different industries?
3. How good do we need the capability to be in order to achieve our strategy?
4. How important is each capability or asset to support you in achieving your strategy
5. Does the capability need to be a differentiator against your competitors, or is it a commodity?

 Asking the above questions will help you define the investment approach for each capability - acquire, enhance, maintain, reduce, dispose - and your management approach - decentralise, centralise, shared model, outsource. This will shape how your company or department will change, provide the playbook for the leadership team on what needs to be done, and where money needs to be invested. Where leadership teams fail is to assume that all capabilities need to be enhanced (or acquired), and that they need to be in-housed within the company or department leading to a lack of focus on delivery and on management time. You have to be honest when certain capabilities are beyond their time, or should be delved to others to manage.

Which songs will be played? 

Having defined what you will do as a company, and how you can achieve that, it is now time to orchestrate the delivery. It’s the role of the CEO to be the Conductor. It’s the role of the CEO to

• pre-empt when certain capabilities need to be ready
• shape the sequence of when certain capabilities need to activate
• shape the role of each capability
• ensure everything is synchronised

As much as an orchestra conductor has to be alert, motivated, and a leader, so does the CEO supported by his leadership team. With how each industry is now evolving, how competitive each industry is becoming, and how globalisation has broken down cross-border barriers there is no role for a passive CEO any longer. Companies and leaders need to play a very active role in shaping the development and implementation of a strategy. They need to take the process of strategy formulation very seriously and give it the right focus.