PTW/PI All-Stars Book Club – Chapter Seven

Strategic Choice Chartering

Welcome to Chapter Seven of the Playing to Win/Practitioner Insights (PTW/PI) book club. Again, in the spirit of a book club discussion, I have responded to all previous comments and will continue to do so. Of the 37 all-star pieces out of the 260 in the series, the randomizer picked Strategic Choice Chartering as the seventh chapter. This one takes us back to the biggest category – practical advice on an element of either the Strategy Choice Cascade (SCC) or Strategic Choice Structuring Process (SCSP). You can find the whole PTW/PI series here.

My Reflections on This Piece

This was the 6^th piece in the entire series and harkens all the way back to 2020. I am happy that it made the all-stars list. Being that early has both pluses and minuses. The big minus is that I had very few followers at that time – certainly fewer than one thousand – as compared to over 266 thousand followers now. So, it didn’t go out to a large audience to accumulate views, reads and claps. The plus is that it has had six years to garner more of each as readers go back to my older pieces – which they have done in this case. However, as I will discuss below, it has few comments because when they read non-current pieces, readers tend not to comment on them.

Avid readers will know that this piece is a core element of my argument against execution, which I discuss in an upcoming piece in the all-star series plus this other piece.

While I despise the standard way of thinking about execution in the modern world, as described in my least favorite business book of all time, I love the desire of execution-obsessed people. They want to make stuff actually happen that they want to have happen. Me too. I couldn’t agree more.

But I am not a fan of theories for how to get the desired thing done that don’t accomplish the goal. And the worst are theories that make it less likely that the desired thing will happen – in fact, even more unlikely than if you didn’t do the thing that your theory said you should do.

Take peptic ulcer treatment theory. Starting in the late 1800s, there was a scientific consensus that peptic ulcers were caused by excess acid in the stomach. Based on that theory, the prescription was to eat a bland diet and take antacids to reduce stomach acid and if that didn’t work, cut out the ulcerated pieces of the stomach using peptic ulcer surgery.

That continued to be the medical science theory and practice until the very late 20^th century – with countless thousands of patients having peptic ulcer surgeries that damaged their stomachs for life. And sadly, the healing power of this disfigurement was modest at best. But the scientific medical community kept doing it anyway.

Finally, late in the 20^th century, two brave Australian medical researchers, Barry Marshall and Robin Warren, posited that peptic ulcers were not caused by excess acid but rather by a bacterium – H. pylori. The medical establishment fought them tooth and nail for literally two decades – the 1980s and 1990s – and continued to do thousands, maybe tens of thousands, of surgeries that made patients’ long-term health worse off. After nearly twenty years of fighting, the medical establishment finally accepted that Marshall and Warren were right and started treating peptic ulcers with antibiotics and stopped doing useless and damaging stomach surgeries. And in a classic “oops, we messed up by defaming you for two decades” move, Marshall and Warren were awarded the 2005 Nobel Prize in medicine.

Unfortunately, this sort of thing happens all the time. A theory drives a prescription that makes the targeted problem worse. America laudably tried to help poor single moms with small children with Aid to Families with Dependent Children (AFDC) but the most notable result was to produce more poor single moms with small children because they had to get rid of the husband to get the benefit. The phenomenon even has a name – the Law of Unintended Consequences.

That is the problem with the modern theory of execution which holds that after you have made your strategy choice, you need to execute it and if you don’t focus on execution, the strategy will never manifest itself with desired outcomes. It sounds great – just like stomach acid and ulcers. But despite massive focus on execution, there is zero sign that execution out there in the business world (or non-profit world for that matter) is getting any better or becoming less of a problem.

The trouble, which I will discuss more in the next PTW/PI All-Stars piece is that calling it execution both demeans it and lets strategists off the hook, which in turn produces more abstract and (to use their terms not mine) “un-executable” strategies as well as less inspired “executers.” There is so much obsession about “execution” because the business world has collectively made the problem worse – with its theory and prescription.

On this front and in this PTW/PI All-Star piece, I try to play role of Marshall and Warren. I don’t just say ‘your theory and what you are doing is sadly mistaken.’ I provide a different theory and a set of practices that derive from the theory.

It requires a very different theory. Rather than claiming that two kinds of choices – strategy choices and execution choices – are entirely different and need to be treated as such, the theory holds that across companies, all colleagues make important choices that are much more similar in nature than they are different. And there needs to be a concrete and consistent method for making those choices in a way that results in strategy translating into desired outcomes.

That is Strategic Choice Chartering. It is a leadership behavior that sees leadership as both making choices yourself and chartering choices to be made by colleagues. It recognizes that in a company, we are all in a choice making activity together. There aren’t two classes of people – ones making important choices and ones doing something other than making important choices.

The piece describes the six steps as shown below:

I won’t go over them in detail because you can read the original piece to get that detail. But I will highlight the one step that in the five and a half years since I wrote this piece, I have come to see as more critical to success than I thought at the time – and that is step three.

To quickly review the other five while spending more time on step three, here they are:

1) Only make the choices you are most capable of making

As a leader of others, regardless of how high up or low down you are in the company hierarchy, it is deleterious to the organization’s effectiveness to make choices that others more junior to you are equally capable of making. That slows the development of your talent by not giving them practice making choices that they are capable of making.

2) Explain your choice and the reasoning behind it

Explain the logic because that will enable your colleagues to make better choices. That way they won’t be guessing why you made yours. They will have that understanding as a helpful context for their choices.

3) Explicitly Identify the Next Downstream Choice

This is the step that I find underdone and believe is more important than I used to think. I think that many managers believe that it is enough to tell their subordinates the choice that they have made and to tell them to do their part to follow up. I now believe more so than earlier that is not proper leadership.

To get the best quality of choice making by your subordinates, you need to do three things

a) Specify the problem that you believe needs to be solved by their choice.

The example I use in the piece is when AG Lafley put Deb Henretta in charge of fixing the Diapers business as a key component of his turnaround strategy for P&G, he specified the problem: “We created this category and now we are trailing Kimberly-Clark’s Huggies brand. We have gotten too focused on what our engineers find stimulating and away from what motivates and excites moms. And we split our business between two brands, and I don’t know what Luvs stands for relative to Pampers.”

b) Specify what a good answer would look like.

Don’t tell them the answer but help them by describing what features it needs to have. Lafley: “Deb, I need a set of choices that sees us taking back category leadership from K-C by being more relevant and compelling to moms and that resolves the question of Luvs — we need it to have a productive purpose, or it should be jettisoned.”

c) Explain how their choice links back to your choice.

This both helps with motivation — the why — and helps subordinates judge the quality of their emerging choice. “Deb, for our turnaround strategy to work, we have to be winning in our ten biggest brands. Pampers is our single biggest brand. There is no way we can achieve our goals without winning with Pampers. Even if it takes sustained investment over a period of years, we have to find a clever way to beat K-C.”

Practice asking yourself whether you have done these three things as you assign the choice. If you have, you will get better choices and far less rework along the way.

4) Assist in Making the Downstream Choice

Don’t just wish them good luck. Offer to help. Avoid implying that you will do their job but show willingness to help. If you do, they will love you as a boss and will do their best for you. And in my experience, they won’t abuse your offer.

5) Commit to Revisit Your Choice Based on Downstream Feedback

As I always remind readers that all arrows on my diagrams mean something. The vertical arrows on the diagram at the top of the piece run both ways for a reason. If they only pointed down, there would be no iterative checking, and the implicit assumption would be that the corporate strategy is perfect. The only way to determine its quality is to revisit it if the lower-level choices show that the upper-level choice is not truly realistic. And that requires the commitment to revisit.

6) Ask for the Process to be Repeated at the Next Level

If you have done the first five steps well, this step is likely redundant because they will have learned from you how to be a productive leader at their level. But it doesn’t hurt to reinforce your intent to have Strategic Choice Chartering permeate the company.

Reader Comments

As alluded to above, there were only a handful of comments, I think because it was early in the series and there weren’t many followers yet. A couple were positive – “Awesome article,” and “This concept really resonates with me.” A couple were interested in how this concept relates to other concepts out there, which is always interesting for me.

Of course, on this topic there is always going to be the guy who is the “action-oriented” tough guy: “I’m sorry Roger - as a real-world strategist this doesn’t work for me.” Hmm. So, I guess this guy is a real-world strategist and, despite me advising CEOs on strategy for 45 years, I am somehow not. His secret is “good strategic alignment” which apparently happens magically by itself. Anything else is a tax on his beloved “action-oriented” people.

He exemplifies why it may take the two decades it took Marshall and Warren to make a dent. We shall see!

Without further ado, the original article…

Chapter Seven

Choices are the heartbeat of every organization. Progress happens only to the extent that people throughout the organization make choices. That is why I am dedicating my 6th Playing to Win/Practitioner Insights piece to Strategic Choice Chartering. (Links for the rest of the PTW/PI series can be found here.)

While the convention is to label the choices at the top ‘strategic’ and those below ‘executional,’ I have found that distinction counter-productive, as I have pointed out in print and on-line. The paired Where-to-Play/How-to-Win choice is the heart of strategy and on that front, I don’t observe only the CEO of Procter & Gamble making WTP/HTW choices. The President of Beauty Care also makes WTP/HTW choices, as does the Senior Vice-President of Hair Care, as does the Global Brand Franchise leader for Pantene, as does the US Brand Manager of Pantene. The same applies for service operations, such as Four Seasons Hotels & Resorts, where I see the CEO, the President of Asia-Pacific, the Hotel Manager of Maldives Landaa Giraavaru, and even its Room Service Food Manager all making WTP/HTW choices.

Click to continue reading the original article…