NZIM: Why It’s Important To Think Strategy

The recently released NZIM/Wevers Index of Human Resource Management and Organisational Effectiveness 2001 contains wake-up call for managers looking to improve their organisational performance and meet the current exigencies of our economic and political environment.

The results of this and previous surveys are stark reminder that managers maintain an undue focus on short, rather than long-term issues. This is shown in two ways:
* failure to adequately communicate the vision, mission, values and goals of their organisation, and
* focus on managing short-term performance issues rather than encouraging staff to understand an appropriate strategic context.

The survey clearly shows that while CEOs might very well understand the purpose and role of their organisation, they are poor at communicating the message to the rest of their people. This lack of awareness on the part of the ‘workers’ can seriously inhibit an organisation’s ability to be effective or even survive in the market place.

While those at the coal face of the organisation must concentrate all their efforts on producing results every day according to the immediate goals set for them, those at the ‘top’ need quite different perspective. If board members and CEOs do not have long-term, strategic perspective, who else does?

Hard though it may be, senior management must divorce itself from the day-to-day issues and concentrate on the vision, mission, values and goals. Their most important role is to ensure that these are both well understood by everyone and embedded so firmly in the ethos and consciousness of the organisation that they influence every decision and action.

Grow and thrive
Organisations do not exist in isolation. They are part of total complex and constantly changing environment which they both contribute to, and draw from. Their continued existence depends on understanding the various factors which make up the total. Such understanding takes time, effort and care; but is essential if an organisation is to grow and thrive.

There are many terms given to this process, but all involve strategic thinking – that is, the ability of the board and senior management to continually assess the ‘big picture’ and apply those assessments to strategies and policies, which enable the organisation to best realise its vision.

Strategic thinking means asking the question: “Are we doing the right thing?” and involves the ability to:
* be well informed about the current total environment and how that is likely to develop;
* hold clear vision of the mission, values and goals of the organisation;
* understand the organisation’s vision in terms of that part of the environment within which the organisation exists;
* have strong sense of perspective, in order to see beyond current issues to the end purpose(s) of the organisation;
* assess the likely implications of current strategies, policies and actions to ensure they are in line with the organisation’s vision and mission;
* think creatively, so as not to be locked into the past;
* know the difference between long- and short-term planning, policy and goals.

Strategic planning and strategic management are often confused. And strategic thinking is all too often ignored altogether. Strategic planning is only useful if it is supported by strategic thinking and enables strategic management. There is kind of ‘circular hierarchy’: thinking – planning – management – (re-) thinking all of which, if used properly, require constant attention to be of value. Each is dependent on, and follows from the other.
But in sense, all are underpinned by the thinking part of the ‘circle’.

Strategic plan
Strategic management is the continuous application of strategic thinking, in tune with strategic plan used to lead an organisation. It means paying constant attention to the ‘big picture’ and knowing what to do when the environment changes or is about to change. Strategic management means being willing and able to adapt successfully to changing circumstances and knowing how to do so.

Good strategic management based on strategic thinking is adaptive and keeps an organisation relevant. It is more likely to succeed in the longer term than the traditional approach of “if it ain’t broke, don’t fix it”, and the approach which makes quick, but temporary changes in response to immediate market signals.

Successful strategic management is not just that which puts into effect the strategic plan, but is also process whereby management constantly assesses the plan against the organisation’s overall mission. This is the skill of strategic thinking – the ability to analyse current issues, problems and events from perspective that takes into account the total environment and the organisation’s place within that environment.

Good strategic management, resulting from well-executed planning and underpinned by skilled thinking is, however, little use long term unless all those working in and for the organisation are ‘in tune’ with its vision, mission, values and goals.

Communication
Effective communication in any organisation begins with the board and CEO and requires two characteristics.

First, the board and CEO must set the example. In all they do, they demonstrate what the organisation is about and how it should operate. Their thinking, statements and actions influence everyone.

Second, communication from ‘the top’ must be clear and unambiguous. Senior management must be clear about the organisation’s vision and be capable of conveying it to others. This is arguably one of, if not the CEO’s most important role.

The message from the NZIM/Wevers survey is that CEOs are not ‘passing on’ the organisational vision to other managers, nor are they ensuring that it is passed on ‘down the line’.

The survey also identified the process of managing staff performance as major issue. It revealed that when people are not in tune with the purpose of the organisation they do not perform to their best.

When performance is below par, managers are faced with staff who have an inadequate context within which to work. Managing in this environment becomes more matter of trying to re-define often badly set and poorly understood short-term goals, rather than providing guidance within an overall strategic framework. The result is crisis management.

Truly effective performance management relies on clear understanding by both manager and individual of their strategic and operational roles.

Responsibility
CEOs must accept that it is their responsibility to ensure that the vision, mission, values and goals are:
• constantly reviewed for their relevance and effectiveness;
• well understood;
• properly articulated throughout the organisation;
• understood by everyone;
• embedded into the psyche and ethos of the organisation.

Involving line managers and employees in operating/business planning ensures that everyone works toward the same ends, using understood and accepted means.

Communications must be clear, simple and frequent. CEOs, and indeed all managers, must recognise that communication is not simply matter of written and/or verbal missives. It also involves setting standards of behaviour and performance and modelling those to provide solid leadership.

These changes are not easy to make. However, they are effective in the longer term – which is the other message from the survey. Focus on the short term is necessary to maintain good day-to-day ‘bottom line’ performance but it does not ensure survival. Success and survival are the function of good strategic planning and underpinned by thinking strategic management.

Graham Weir AFNZIM is the principal of Graham Weir & Associates Ltd, Lower Hutt. He specialises in performance management and strategic thinking. This article represents his personal views. Email: [email protected]

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