Strengthen Your Strategic Acumen
TLDR: This is already a very short summary of key info about strategic acumen. Please Read ON!
Strategic acumen is perhaps my favorite of the three elements of Business Savvy, because I had to unlearn everything that I thought I knew about strategic acumen, and perhaps you will too.
Strategy Isn't...and Is
I grew up in organizations being told that strategy was comprised of mission, vision, and values. I'm here to tell you that while they might be important elements of an organization's identity and they might shape strategy, they are not strategy and understanding them and being able to create them for your own teams or team does not demonstrate strategic acumen.
So what is strategy?
A strategy is designed to achieve three goals.
- Win the customer's preference
- Create a sustainable competitive advantage
- Leave enough money on the table for shareholders that is in for-profit companies or for re-investment for nonprofits.
The core of strategy work is always the same, "discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors."
These definitions and my understanding draw heavily on the work of Ram Charan and Richard Rumelt. Through their work, I've learned that there are three key, interdependent elements that are examined when setting strategy. And there's one skill that rests at the center of these three elements through which strategy is derived.
The three elements have to do with:
- External forces and trends
- Financial targets
- Internal capabilities
External Forces & Trends
External forces and trends are wide ranging and in our Business Savvy YOU! course, we help you narrow them down as to those most important for you to be attending to.
They could include anything from legislative actions to consumer purchasing trends to demographic shifts,to the price of raw materials. etc.
Financial Targets
Financial targets have to do with and touch on your financial acumen. They are key metrics that have to be attained or exceeded in order to avoid the red zone of failure, in order to lift your organization above its competitors and to draw customers and or investors.
Internal Capabilities
Internal capabilities have to do with the people, their skills, the systems smallest, so those can be processes and or automated systems and other processes.
The Crux
The skill in the middle is what Richard Rumelt calls The Crux. It involves the ability to disentangle the complex findings as you analyze external forces and trends, financial targets and internal capabilities to clearly identify a path forward that will address the external trends and forces that will allow the achievement or surpassing of financial targets through changes in the internal capabilities.
I always say, "Leadership is about change all the time," and this is one of the reasons. It is impossible for an organization to perform at a higher level, unless it changes "the way we do things around here."
Strategic Acumen @ Different Levels
So what does strategic acumen look like at varying levels?
At the individual contributor level, it is working to understand why "the way you do things" is changing
At the manager level, regardless of whether you're a team leader or a middle manager, it has to do with understanding the strategic initiatives that are yours to further and effectively communicating them and changing processes. Also changing team metrics in a way that helps align your direct reports to the strategy.
And at senior manager levels, you're expected to be spending about 80% of your time thinking strategically and proposing strategic initiatives up to the top.
At executive levels, you're responsible for setting strategy and ensuring its execution. Or as Cynthia Montgomery writes in The Strategist, "A strategist's primary job is setting an agenda and putting in place the organization to carry it out."
Because ultimately, a strategy is a promise to shareholders that your organization will continue to return value to them. If you're a non profit, it's a promise to the community that you will continue to add value to the community.
So Let's Recap.
Strategic acumen means knowing that strategy is not mission, vision, and values. It means understanding strategy and how it set. It means Making strategic recommendations appropriate to your level. And it means understanding it is a complex interdependent and iterative process involving the forces outside the organization, it's financial targets and it's internal capabilities in order to determine the crux of the path forward for a viable and vital future.
What's a Woman To Do?
- Let go of your belief that strategy is mission, vision, and values.
- Level up your financial acumen because companies generally, aren't very good at telling employees what the strategy is. And if yours is one of those companies, you can discern the strategy by making connections between what's going on inside the company and the financial targets that are being publicized outside.
- Pay attention to what's happening in the external marketplace - what trends and forces your executives are attuned to, the trends and forces that analysts (if you're a publicly traded company) are attuned to.
- Pay attention to the strategic importance of the changes that are going on inside the organization, especially those that impact you or for which you're responsible.
- Demonstrate all of you understanding and insights in ways that are appropriate to your level.
We explore all of this more deeply in Business Savvy YOU! I hope to see you there.
Catch you next time,
Susan
PS Putting time into setting mission, vision, and values could demonstrate strategic acumen to the extent that you are using them to realign your organization toward a new strategy.
But aside from that, mission, vision, and values are not strategy and putting effort into defining them is time and effort that would be better spent on other actions that align your team or teams to the organization's new strategy. Because after all, if you're working on the strategy for your team or function or division, one of your external factors, is the overall organizational strategy and aligning to that should be the primary goal of the strategy that you are developing.
Go Deeper Links
⭐ Business Savvy YOU! delivers the business, financial and strategic acumen you need to succeed: https://www.bebusinesssavvy.com/open-business-savvy-you
⭐ Discover The Most Important Thing You Need to Succeed FREE email course: https://www.bebusinesssavvy.com/newsletter-opt-in-1
⭐ Receive unique and transformative career advice: https://www.bebusinesssavvy.com/BusinessSavvyNewsletterOpt-In
⭐ Turn Career Advice from Flawed to Fantastic!: https://www.bebusinesssavvy.com/lead-magnet-7-career-tips-keeping-1
Podcast produced* and original theme music by Megan Tuck www.megantuckaudio.com
*Megan creates a listenable pod from a truly imperfectly created original containing my walking huffs & puffs, footfalls, background noises - birds, waves, cars, dogs, roosters and more. Thank heavens for Megan!
