Why do managers sometimes flounder when they become executives? One reason: their new role requires them to create a corporate strategy. It’s a task for which they have never been trained.
The tale has often been told of the just-promoted manager who, everyone soon discovers, was elevated based only on his technical skills. As the rubber hits the road, it becomes clear that he is ill-prepared.
Another similar problem occurs when a manager is appointed to the executive ranks. All of a sudden, she finds herself sitting in a strategic planning retreat, failing to contribute. In the moment, she realizes that her well-honed ability to produce short-term results are of little value.
Now, she’s on her own as she struggles to uncover what’s lacking. If your firm recently promoted you to the highest level of leadership, here are three areas you must develop to be effective in creating strategy.
1. Understanding the current environment
Whereas managers are encouraged to stay in their lane, put their heads down and ignore parts of the company that don’t apply to them, that advice won’t work for you. In this new position, you need to comprehend the entire company’s operations all at once.
This means far more than being able to fill out the names in an organization chart. Now, you must see the enterprise as a complex system in which only some of the cause-and-effect relationships are explicitly defined. To gain this level of knowledge, you should study the functions you know little or nothing about, mastering jargon that’s unfamiliar along the way. Also, you should be able to explain how the company works in layman’s language to anyone who cares to listen.
At the start of a planning retreat, you’ll use this skill to bring your team to a joint understanding of the current state of the business. This includes all external trends which may impact the organization, ranging from disruptive technology, competitive threats, to changes in the economy. Your far-reaching, expert contribution is required to complete the exercise.
2. Creating a Long-Term Target Year
Most companies promote managers based on their ability to produce short-term results through teams of direct reports. However, when they are faced with the challenge to create a corporate plan that’s 20-30 years out, they flounder.
As a manager, you knew how to set and accomplish goals you could control. By contrast, executives marshal forces they don’t control in order to hit long-term objectives. The longer the timeframe, the more skill required.
The benefits of such plans are well-established in management practice and theory. It’s not hard to realize that such efforts are the only way to safeguard your firm’s future.
But that’s of little help when you must complete such a task for the first time. Some newcomers to this process even rebel, complaining: “I can’t think that far ahead.”
Don’t be like them. Long before your promotion is finalized, look for (and create) practical learning opportunities to develop long-term plans. This will prepare you for the moment when your role as an executive requires you to craft visionary strategies.
3. Envisioning Details
Most lower level employees are satisfied by overarching vision statements which use vague language. They assume that leaders are effectively managing the next steps.
In your new position, you should go much further.
Now, you must describe a detailed, numbers-based vision of what will happen in the long-term target year. In other words, your team develops a picture of the future painted in concrete metrics such as revenue, EBITDA, headcount and market share.
Furthermore, to ensure that these figures are not just being made up, they need to be “back-casted” to connect with today’s results. While many are familiar with the idea from their days studying for an MBA, doing the task in a real group setting is quite a challenge. Once again, it’s best to practice this ability in advance.
Developing these three skills in concert prevents leaders from running off in different directions, investing time and effort in individual plans. The fact is, your organization is at risk if it doesn’t create a strategy which involves all the relevant points of view. If your team is poorly trained, expect it to conduct planning which is weak, leaving your company vulnerable.
Another trap is to dress up “More of the Same Stuff, But Just a Little Different” as a strategic plan. This is a cop-out—a way to avoid making hard choices based on the most recent information.
Don’t make this mistake. These skills are trainable even though they may be rare. Invest in them early in a manager’s career so they can be practiced long before their promotion occurs. It will save your company from producing weak strategies that ultimately endanger its future.