“Solving a problem simply means representing it so as to make the solution transparent.” — Nobel Prize winner Herbert Simon
It is a cold, damp January day in San Francisco. A software company leadership team is together in a downtown high-rise for their quarterly offsite, which includes annual planning. The tension is high. Overall, the company has done well; however, there is growing competition in all three of the company’s markets, and the economy is on shaky ground.
The CEO is at the whiteboard leading a conversation about which competitors are fiercest in each of the three markets and how they can compete across all three. Each of the eight leadership team members has strong opinions about where the limited resources should be spent for the best outcomes. There is turbulence as each team member picks their favorite market, product feature, and/or competitor to discuss during their debate. The CEO, frustrated after an hour of no conclusions, asks the most important question: How will we succeed?
Drama ensues because each team member debates from an entirely different perspective and is frustrated that the team is seemingly abandoning the debate they have had for the past hour.
Representation Before Conflict
Now, let’s turn to the team you lead.
I bet you have been in this type of conversation before. I also bet your team met this ambiguous complexity with more complexity by adding more data and perspectives to the discussion. Without an aligned starting point, your team has too much to argue about, and the conflict turns unproductive.
The team in the above example has their conflict backward. In our experience, and according to our friend Dr. Simon’s quote above, great decisions start at “representation.”
Representation should happen before teams launch into conflict to make a decision. And let’s be clear: one of the primary responsibilities of a leadership team is to make great decisions for the organization. The team in the above story could make its conflict, and hence their decision, much more productive if they answered “How will we succeed?” before entering into conflict. The answer to the “How will we succeed” question is strategic anchors.
Every company should have three strategic anchors to represent how the company will have the best chance to thrive and differentiate from competitors.
Let’s repaint this picture with the CEO presenting the correct representation of the opportunity before the conflict starts. Imagine if the CEO began the meeting with the following: “This discussion is to invent and discern new and better ways of competing in today’s tough market. In the end, we will commit to what is the most important step right now for us to take. As you debate, represent your ideas through our strategic anchors: Market leader in enterprise, Accelerate traction with the platform, and Make our customer the hero.”
As a forward thinking strategy, strategic anchors:
- Make your uniqueness practical and understandable – Clarity must be practical and memorable. So many organizations have a long, complicated strategy slide presentation – that no one uses – or uses to their political advantage by selectively utilizing when it fits their purposes.
- Empower – An organization’s strategy is simply a collection of intentional decisions. Imagine the power of ALL managers filtering every single decision intentionally and consistently through the strategic anchors. What alignment! Also, this teaches everyone in the organization to be strategic thinkers.
- Enable productive conflict – The common language of the Strategic Anchors narrows what we have conflict about during our meetings.
- Identify risks – We will and should make decisions that do not fit through the strategic anchor filters. But, using the anchors allows us to identify risks to success and plan to mitigate the risks. For example, one of Southwest Airlines’ strategic anchors is On Time. When Southwest purchased Airtran in order to fly out of Atlanta, Airtran had lower On-Time performance. The executives at Southwest identified this risk and took mitigating steps to improve legacy Airtran performance. Note: They still acquired Airtran even though it temporarily lowered their On-Time metrics.
So, what should you and your leadership team do next?
Decide on 3 Strategic Anchors:
If you do not have anchors, you can arrive at draft anchors in a couple of hours. Warning: This is a fun, energizing, and messy exercise. Pull your leadership team together and ask: What three decisions have we made to help us be successful? No decision is too small. Scribe everyone’s thoughts on a whiteboard or flipchart. Have the team go through and group the items based on big themes and narrow them down to the three most important.
It is best to focus your team on themes that are rare in your industry, difficult or expensive to copy, and create value by allowing your company to charge more, lower costs, or attract customers away from competitors.
Determine Metrics related to Anchors:
In your weekly tactical meetings, your leadership team should assess the company’s most important metrics for success. Strategic Anchors are a great place to find your metrics. Have your leadership team agree upon 1-2 measures of success for your Anchors. For example, in “Market leader in enterprise,” a team may assess the “trend in sales win rate vs. competitors.”
Use Strategic Anchors in your messaging about decisions:
Imagine if the team from the story above decided to redo their website to be all about customer success stories. The all-company message might be: “We know we will succeed if we make our customer the hero. Our leadership team decided to put most of our marketing resources this year into relaunching our website as an online magazine. We want to tell the stories of how our customers are changing the world. To make this happen, we will restructure some of our teams so that each of you will play an important part in this heroic effort.”
How to frame your team’s conflict:
One of our clients recently redesigned their strategic meeting pre-read slide template. All new ideas coming to the executive team are described through how they satisfy the strategic anchors.
Ideas that fit all three are described as a bullseye! If the idea is not a bullseye, the team now knows where to center their productive conflict about whether to pursue the idea.
Like all behavioral change, adjusting your approach to conflict and decision-making can be tough. The best teams pick one of the above recommendations and try it for ninety days. If you are not used to utilizing Strategic Anchors, it is important for your leadership team to test the answers before a full rollout of the concept to your entire company.
Once the leadership team is confident in the strategic anchor answers and approach, it is time to teach and empower all the managers in your company.