Towards the end of August in the Philippines, the annual wave of college entrance examinations begins. In the corporate world, the annual planning process is well under way. Essentially, the third quarter of the year is a time for assessing and planning.
While many people think of strategic planning as a linear process beginning with assessment and ending with the creation of a plan, the reality is that plans, whether annual, medium-term or long-term are all part of a cycle.
At the Asian Institute of Management, we think of the planning cycle as being anchored by a few basic questions. The cycle itself often begins with one question: Where are we? This is the phase of strategic scanning or assessment. It asks questions about the external environment of the business, about the industry, about customers and about competitors. It also asks about the internal state of the company. This first question allows management to identify trends, spot opportunities, red flag potential threats, and relate these to the company’s directions, resources, strengths and weaknesses.
This first question is then followed by the other questions: Where do we want to be? How do we get there? What do we need to do and what will we need? How do we make sure we are getting there?
The last question in the cycle is the question that links up with the question of where we are. It is this: How are we doing? In a well-managed organization, the “How are we doing?” question can trigger mid-term changes, and even major review and repositioning.
However, at AIM, we like to remind managers that the first question should properly be: Who are we?
The reason for this is that every stage of the strategic management cycle must be anchored by the company’s purpose and identity. Some trends are relevant to some companies but not to others simply because of their industries or their positioning within the industry. Some strategies make more sense for certain companies because of their history or culture or values.
Consider, for example, that on its official website, the nearest thing to a mission statement that Apple has reads like a list of products but really clarifies two very important things about the company’s current identity: (a) the businesses it is in, and (b) its precision focus as a leading innovator aiming to be best in breed in the particular areas it focuses on.
Now, compare this to what The Body Shop says on its website: “We believe there is only one way to beautiful: nature’s way.” While there are more words on the page, this sentence captures what business The Body Shop is in as well as its core positioning.
Most students of strategy will correctly identify these statements as mission statements, the heart of what is often called “VMV”: Vision, Mission, Values. The two V’s are easy. Values explains the company’s principles and ideals. They explain how the company determines worth. They identify what things are so important, they must be upheld at all times. Values help us address that age-old adage: “Just because you can doesn’t mean you should.” Vision is the inspiration, the long-term goal that fuels corporate endeavors. Vision provides an anchor for the long-term objectives that are set within the strategic management cycle. Many planners and entrepreneurs begin with Vision, and then think about the Mission as a “How?” However, there is another way to think about mission, one that more precisely captures its meaning and explains the choice of the word: Mission is “reason for being.” Mission explains enduring purpose.
In the leadership classroom, this is one of the things we often discuss, the question of personal purpose.
Before we continue this discussion, let’s consider a report by Development Dimensions Intl. DDI’s leadership insights report summarizes the results of a 10-year study including over 20,000 executive assessments in over 20 countries. The heart of DDI’s report centers around three things: behavior, personality and context.
DDI identifies seven key leadership competencies: leading change, coaching, entrepreneurship, driving execution, empowerment, influence and leading teams. What DDI concludes is that, by and large, behaviors lean towards management as opposed to leadership. Essentially, that executive tend to manage for shorter term results, often at the expense of innovation, and growth in human capability. How, they ask, can companies grow over the long-term if potential leaders are smart and decisive and can drive for results but don’t have the abilities to handle resistance to change or provide lower level leaders with enough latitude to grow their own skills?
DDI then goes on to explore the personality dispositions that lead to certain behaviors and then to identify enabling dispositions and derailing dispositions. On the brighter, enabling side, they list: being strategic/creative, being sociable and empathetic, and being driven and energetic. On the darker, derailing side, they list: micromanaging, being insensitive or detached, and being resistant to change. DDI identifies competencies involved in each of these six dispositions. However, the most important point they make is this: behavior is rooted in personality and personality is largely unchangeable. This does not mean that behavior cannot change, it simply means that some behaviors must be more closely monitored by the executive himself. It also means that executive development programs must take into account basic personality disposition.
Which brings us right around to the question at the center. One of the things we always say about leadership is that strong leaders have a strong center. This is important because of the essential difference between leadership and management. Management is simply about getting things done. Leadership is about forging new paths for many people.
In business, leadership is about forging new paths for the organization. New paths require change, often difficult change. The path of change requires not simply a clear vision, it requires courage and fortitude. It requires the ability to build that courage and fortitude in others. What most leaders will tell you is that they find their courage and their strength in purpose. Inside themselves they have a deep belief in the mission at hand. They mine this belief and commitment and use it to inspire and strengthen their team.
The other thing leaders will tell you is that leadership begins with the ability to manage the self, and this begins with knowing the self. Leadership also requires knowing the people in your team. This enables the leader to help them find their own purpose and strengths. This, of course, is clearly supported by the DDI report.
In the leadership classroom, we say this: The journey outward begins with a journey inward. Mission. Purpose. The things that define who you are. They ground your decisions.
Readers can email Maya at [email protected] Or visit her site at http://integrations.tumblr.com.