The great Peter Drucker was once quoted saying, “Culture eats strategy for breakfast.” It’s a great quote and I love Drucker’s work. However, the drive to have a “great” culture, is in fact, a strategy. In this CEO’s humble opinion, the development of strategy is the most important responsibility a C-Suite team has to their company. In his timeless book The Art of War, Sun Tzu states, “Tactics without strategy is the noise before the defeat.” I agree.
Without strategy and the corresponding strategic direction it provides, middle management, those who are tasked with aligning resources and budget to execute operations, would have no idea where to focus. Those middle managers are making decisions every day that directly affect the P&Ls senior executives are in charge of. A clearly defined and well-articulated strategy that is understood from the C-Suite to the front line will position you to achieve maximum return on investment.
To develop a strategy, there must be a structured decision making methodology. We leverage the Military Decision-Making Process, or MDMP for short, which the U.S. Army uses. In addition to being CEO at Spartan, I’m an Army Major whose unit is charged with the training and assessment of MDMP in an operational environment. This has enabled me to embed the process within my company and teach my executives the process.
Our real estate development and syndication company started out doing residential projects. In October of 2016, we made the decision to move into the commercial real estate space. To determine what asset class we would pursue, we executed a strategic decision making session using the MDMP process with the objective of identifying what asset class would be our focus.
What came out of that session was our strategic vision: to build a $100 million portfolio of self-storage projects. Now came the hard part: clarity and articulation. To ensure our strategic vision, which was clear to us, was understood at all levels of the company, we needed to develop strategic goals and objectives. Goals align everyone in the direction of success and objectives map out the steps to get there.
Before we dig into the development of goals and objectives, let’s quickly walk through the concept of accountable versus responsible as it pertains to leaders in an organization. Accountable leaders have to answer for activity and responsible leaders execute it.
Goals: Success Alignment
Setting goals can be a difficult process. I do not recommend setting more than three goals that support a strategic vision. Any more and they’re difficult to track and will probably cause the team to struggle to prioritize. It takes a lot of cerebral power and focus to get them right. Luckily there is a great acronym to guide the process: SMART.
SMART stands for specific, measurable, achievable, realistic and timely goals. Specific, measurable and timely are fairly straightforward adjectives. However, teams often do not understand the difference between achievable and realistic goals. It is completely unrealistic to think Department of Veteran’s Affairs could put a man on the moon. But NASA could. However, no team at NASA could achieve the goal of putting a man on Pluto.
For goals, an accountable leader should be named. This leader needs to ensure the responsible party, who will be named in the next step, has the resources, whatever they made be, to accomplish the set objectives. In addition, the accountable leader’s main task is to remove roadblocks that may present themselves.
Objectives: Steps To Achieving Success
I recommend three to five objectives per goal and similar to goals, the SMART process will work for developing objectives. Establishing performance targets is the second component of objectives necessary to track your progress. These targets should step up along the objective’s timeline such that a performance target's completion brings the team closer to achieving the objective. The performance targets should not be ambiguous and include very specific language and a well-defined completion date.
Every objective has a responsible leader. This is the leader directly responsible for the objective's completion. They are the leader managing the teams, making resourcing decisions, and they're elbows deep in the day-to-day activities of the operations supporting the objectives. These leaders report to the accountability leader and will need their support.
Putting It All Together
The development of strategy may seem like a tough process. And the first time your team goes through it, it will be. However, with the establishment of a strategic decision making methodology and the corresponding processes to develop goals and objectives, it will get easier and easier every time. In my military career, I’ve executed a hasty MDMP session while deployed to Iraq to make a pretty complex decision and we did it in about 16 hours. Luckily in a business environment, we generally have more time and the ability to execute our processes in a less chaotic environment.
There are three key things that truly increase the probability of a successful execution of a strategy. One is integration -- the goals must integrate with one another and the corresponding objectives should build upon one another to accomplish the goals. The second is formally writing the strategy, goals and objectives down in a document with an additional explanation to eliminate misunderstanding and ambiguity, then publishing it and giving it to everyone. And finally, the third is making sure to include both the accountable and responsible leader’s names in the plan after you push it. It’s amazing what you can accomplish when everyone knows who to go to.
Scott Lewis is CEO for Spartan Investment Group, LLC, responsible for the strategic direction of the Group.
