One of the most appealing aspects of life in a small or medium sized business is that you get to play so many different roles. But sometimes this causes abject confusion.
A common example of this happens at annual strategy days or quarterly planning meetings. Leaders often tell me that their teams find it tough to separate strategy and execution because in practice they do both. As a result, the sessions become frustrating, with the team merrily flipping between the conceptual and the practical.
When this happens I often recommend to teams that they imagine they are working in a much larger organisation: one that has the formal corporate hierarchy of a board, CEO, business-unit leaders and managers. I then suggest the team metaphorically put on a different hat according to which part of the planning process they are in.
I borrowed the idea of hats from Edward de Bono’s 6 Thinking Hats but in my example the hats take on roles rather than perspectives. In practice, when I am running such a session, I bring along real hats for the team to wear; like actors at a dress rehearsal the result is even better.
If you want to try this, here are the hats the team wears, the roles they play and the questions they should ask:
The first hat to wear is that of the board. The board’s role is to decide the level of risk that the business is prepared to accept: the strategic risk.
With your ‘board’ hat on, think about these three questions:
* What level of risk feels right for our business?
* How much performance (ROI or whatever measure suits you) are we willing to sacrifice in exchange for lower strategic risk?
* What level of resources should we devote to mitigating risk?
Or more simply, how much are we prepared to bet?
The second hat to wear is that of the CEO.
The role of the CEO (and senior management team) is to formulate the strategy. Having worn the ‘board’ hat you now have a clear understanding of the level of strategic risk that your business is prepared to carry.
As the CEO you need to ask two questions:
* What strategic uncertainties does our business face?
* What strategic options do we need so that we can cope with those uncertainties?
Put more simply, given the amount we are prepared to bet, what should we do to maximise our winnings?
Now put on your ‘business-unit leader’ hat.
Having already worn the CEO hat the strategy is formulated, now it’s time to bring it to life with some action.
As the business-unit leader you need to ask:
* What key activities should we undertake to implement the strategy and achieve our performance targets
Or simply, what are we going to do to create some wealth out of this strategy?
The fourth and final hat is that of the manager.
By now we have chosen our level of strategic risk, formulated the strategy, and settled on the key activities to bring the strategy to life. As the manager we need to look at the best way to execute the activities.
So, as the manager you need to ask:
* How can we best execute the activities?
By which we mean, of course: show us the money!
Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).
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