The respondents answered five basic questions about strategy facing their organization or work group in the year ahead. The fourteen organizations mostly represented high technology companies ranging in annual revenues from $30M to greater than $10B. However, there were also startups and nonprofits included.

Here were the questions that I asked.

1. What is your relationship to strategy decision makers in your company or work group?
2. What types of strategy do you influence or decide in your company or work group?
3. How would you assess your company’s or work group’s strategy effectiveness?
4. What critical strategy challenges does your company or work group face in 2010?
5. What types of strategy help would help you most?

From the (admittedly) small sample, several interesting responses jump out.

Most of the people were involved in strategies at the business or product level. The survey included fewer that had responsibilities for financial, mergers & acquisitions or alliance strategies.

Each person ranked their strategy efforts across a few categories on a scale from one to five (5 = best performance). The categories included developing strategy, communicating strategy, executing strategy, reacting to competitors and so on. I averaged the ratings across all categories for each company to produce a composite rating. The distribution is shown below. The fascinating (though not entirely surprising) finding is that more than 50% of the organizations were rated no better than average (3 = average performance). Average is not likely to be good enough in 2010 (if it ever was).

Looking more at the detailed ratings, it becomes clear that most organizations rated themselves higher on the front end activities of strategy (i.e., developing, communicating, executing) and lower on those on the back end (i.e., ongoing management, evaluating, reacting to competition). To the extent this is true, it reflects a great vulnerability that a strategy may start strong but finish weak in the organization or market place.

Given where companies rate themselves, where do they see the challenges in 2010? The number one response was that they needed ways to gain new competitive advantages. Would not that require above average strategy performance? Or, maybe it would require better competitive positioning. Then, throughout the year, would not strategies need to be evaluated better to support adjustments to the strategies? The net is that the recognition of the challenge is dead on but that current performance of many organizations inhibits them from successfully closing their strategy gaps.

Assuming that they could have anything, what kind of help would people like with their strategies in 2010? I speculated before the survey that most might want help formulating the strategy. For example, what are the new products to introduce and how should they be marketed? Perhaps many would want help analyzing the competitive environment. Neither of these two possibilities garnered the most responses. Instead, most people simply wanted someone with experience to talk with about their strategy and to reflect on their plans.

There are many smart people working diligently on business and competitive strategy in 2010. It is not news to them that the environment is tough or that their companies’ have high expectations about the strategies. Neither is it news that their strategy efforts need to improve. For those people, the best thing to do may be to talk to someone that they trust to reflect with them about what to do better.

Certainty is a virtue, isn’t it?

Where would we be without confident, black and white answers to important questions? There is great comfort in knowing something to be true or in taking a position that does not need to be reexamined each day. So, we test our beliefs and fix them in our minds. Without such a process, life would be too incredibly complex. It is enough to deal with the new things without having to question what we already know. Makes sense to you?

And yet, unyielding certainty can be a trap.

When my daughter was young, it was a regular event every few months for her to ask if she could have a dog. My answer was always the same, “No, Sweetie, a dog is a lot of responsibility and work.” She cheerfully and consistently accepted my short answer (which never varied) for years. Then she approached me one night while I was sitting on the couch with my son. “Daddy,” she said, “could I have a dog?” Well, the usual tape started running, “No, Sweetie, a dog is a lot of responsibility and work.” When I resumed talking with my son, I could see out of the corner of my eye that my daughter had not moved. Turning back toward her, I could also see that there were tears in her eyes. Off she ran upstairs. My son and I exchanged bewildered looks. “What was that all about?” he asked.

That night as I was putting my daughter to bed, I found her lying there still affected by my answer. I asked her if she was upset at me. Without making eye contact, she nodded her head “yes.”

Quietly, I said, “But, Sweetie, you know that I always say ‘no’ when you ask for a dog. A dog is a lot of responsibility and work.” (Perhaps if I whispered the words she would accept them better.)

Turning to look at me directly, she delivered to me an important lesson.

“Daddy, you could have said ‘maybe’.”

There is so much simplification that occurs in strategy and competitive intelligence work.

Much of that simplification is necessary because the competitive environment is simply too complex to think that analysis can start from scratch each day. So, we analyze, categorize and prioritize so that the few most critical issues are worked hardest. Over time, the people that are involved know and can repeat the common answers to both the lower priority issues and those that are getting special attention. Indeed one measure of the success of a competitive intelligence program is the general awareness of the conclusions of the competitive intelligence efforts. What’s the problem with all of this?

The first problem is that all answers (even good ones) have an expiration date.

Things are constantly changing. Thinking back on just the high technology industry, there are many things that were once givens but are no longer true. IBM mainframes are not the best, safe choice any longer. Yahoo will likely not dominate online search. PC software standards are being supplanted by web based applications. NBC, ABC and CBS will not have the eyes and ears of American consumers all to themselves. Things happened and somewhere along the way someone knew that change was coming and had an idea about how to capitalize on that change. The truth is that all answers are temporary and predicting the timing of change is a critical skill for marketers and strategists.

The second problem is that all answers have dependencies.

In fact, the dependencies are often a richer source for understanding than the straightforward answer. It is an initial lesson for those new to competitive intelligence that assumptions and dependencies have to be documented. Senior management and strategists often deal will questions and answers that are not perfectly defined. Answers are very important to them but the dependencies help illuminate the risk that is implicit in the directions that they choose.

Here are five ways to recognize that the common answers are stale in your organization.

1. Everyone knows the same answer. This may be counter-intuitive but it can signal that much time has passed since the original question was asked. Even simple answers take time to percolate through an organization and the fact that “everyone” knows and can state the answer with confidence may prompt an action to reexamine the original question.
2. Few can recall the original question. That is, many people may know the conclusion but they may be completely unaware of the context of and motivation for the first inquiry. This is a great danger sign because it drives actions and plans that may easily go awry. Context free answers can lead to unintended consequences for a business.
3. The answers bear little relationship to what is currently happening. Many times a company will trudge along with their version of the competitive truth but there is no recurring justification for that truth. Maybe the answer was useful and true three years ago but the critical competitive factors are different now. Clinging to a known answer when contrary evidence is available is dangerous.
4. No one can answer the “it depends on what” question. Every answer has dependencies that often are part of the original question. In healthy organizations, there is vigorous debate over the answer to the question with advocates representing all sides of the argument. Every side will illustrate their points with the assumptions and dependencies which matter most. Finally, one answer from among many possibilities will be selected. Now here’s the rub. The answer may be well remembered but the arguments are forgotten. This is a grievous loss for an organization. Over time what has been lost may exceed the value of the initial good answer.
5. The common answers motivate no useful actions. Occasionally some answers actually become museum pieces. They have a place in a strategy display case that employees can point to and admire. But, no one can link those answers to any important action. It is easy to see this is people by asking them to state what drives them each day. If the common actions are stale, their replies will quickly vector to something different. Usually this will be some tactical situation that is independent of strategic answers.

My daughter reminded me that night to not give her old, rote answers that did not acknowledge that she had grown up (things change too fast for a father). The next day she had her beautiful yellow Labrador puppy, Flash. (It wasn’t too long after that she had her second dog, Goldie.)

The beauty of “maybe” is that it helps us consider that important things may have changed.

“Maybe” makes it possible to have discussions again to challenge what we know and think about the competitive environment. “Maybe” keeps up humble about complexity and open to learning important new things.

There is an excellent case for practicing “maybe” regularly.

Slab foundations are solid blocks of poured concrete on top of which the structure is erected. There are several important characteristics that a slab foundation must have in order to support the house that is being built.

• It must be shaped correctly for the house. It is costly and difficult to alter the basic shape after it hardens.

• Although it looks like a solid mass of concrete, it actually conceals a great deal of infrastructure including electrical conduits, plumbing and cables (which provide strength).

• Everything attached to or embedded in the foundation must be in the right place (again, it is hard to change things fixed in concrete). For example, the plumbing for sewage should emerge where the bathrooms are planned to be.
• Finally, after doing all of the necessary things, it is important to preserve your flexibility for all of the remaining elements of the home. For instance, the placement of the second story wall for the guest bedroom is not to be tied to something in the design of the foundation.

The foundation serves its purpose even though it is not a visible feature of the home. The structure above obscures what is beneath it and many people give little thought to what they don’t see. However, you absolutely must pay attention to your CI foundation. And the quiet time after your first management presentation is a good time to establish what will support all that you do later.

Skip the foundational work, however, and the compliments will quickly be replaced with sympathies for the expensive rework that will be required. After the sympathy, you will start to hear the whispered questions about how could someone forget the foundation?! This can cause damage to your prestige and credibility. It’s embarrassing, expensive and (this is the good news) avoidable.

So where are we in our journey to create a competitive intelligence function?

You have taken the initiative to build a competitive intelligence function. Spotting a “pain” (step 1) you approached a senior manager to offer your services (step 2). They are interested! Show me something they say and off you went to respond. Since you are just starting, you know that you cannot provide the ultimate benefit immediately. Making virtue out of necessity, you figure out how to provide some value and, more importantly, you whet the appetite of your senior leader by giving them a tease (step 3) of what could be done. The meeting is a success and you are pretty sure that you will be doing more CI work for the senior leader. You have some time to reflect about what to do next

The next step is to frame the foundation for all that is to come. There are three things to do to make sure that your foundation is what is needed for long term success.

1. Create the Blueprint

This is where you begin to imagine what the full vision for the CI function will be. One thing for sure is that it will be customized to your environment. That is, it will be constructed to meet the needs of the people of the organization. Like an architect does before designing a home, you will begin asking people about what their hopes are for competitive intelligence. How do they like to get information? What are the critical times for receiving intelligence? What do they already have or know? When and why have they been disappointed in the past? All of the answers help you to identify how to construct the program. They will suggest the mechanisms for delivering information, the schedules that make the most sense, the sensitivities to avoid and the dreams that the leaders have for their success.

Don’t make this too hard. Simply talk to people and record their responses. List the concrete responses to what they have told you. In most organizations, common culture and experiences will help you because the responses will cluster so that you can focus on a smaller number of items. Note that you are not implementing all of this now. You are simply making plans so that what you do in the near term will not preclude something important that comes later.

2. Establish Your Principles

Make sure that you know what is important. These are your principles that are relevant throughout the lifetime of a CI function. Among the many reasons that principles are important is the simple fact of pressure. As you become known for your CI contributions, you will begin to feel great pressure. The pressure to produce valuable interpretations will exist, of course. You will also be confronted by other pressures such as ethical issues (“can we use this information that I got from a former employee?”), shortcuts (“we don’t have time to double check our sources”) and misuse (“it just needs to look pretty, I don’t care what it says”). Here are some principles to consider.

• I will always focus on value to senior leaders and the business strategies. This doesn’t mean that others won’t benefit but it does establish priorities.
• I will conduct myself according to a code of ethics (see the SCIP code of ethics). Now is a good time to identify who can give you legal support as issues arise.
• I will properly and consistently characterize (e.g., assumptions, facts, speculation, recommendations) the content that I provide. This establishes and maintains your credibility.
• I will orient all I do toward helping effect positive change. A CI function implicitly challenges what is happening inside your company as you analyze the competitive environment.
• I will always remember that people (i.e., leaders, colleagues, others) matter most. People are the source of the best information, they are required to support and accept competitive intelligence and all change comes through the efforts of people.

3. Make Broad, Fruitful Relationships Possible

This may seem redundant. And, it is.

Your success or failure will be based on your personal relationships. This may seem counterintuitive in the age of complex information systems, databases, web searches, analytical tools and academic research. All of these things have a place but in absence of a robust foundation of relationships, your failure is more likely than not. Here is a partial list of relationships that will be critical. You need to begin now thinking about how to nurture each set of people.

• Sponsoring management/leaders – do you understand their needs?
• Other managers – who owns what strategies and might be overly sensitive to what you are doing?
• Peers – how can you provide value to them so that they willingly contribute information and reflection?
• Sources – how can trust and reciprocal value be established?
• Support – how can you get their help to build the information infrastructure and provide other (e.g., legal) services

Three steps for framing a solid foundation – blueprint, principles and relationships.

Next topic is “Establish Some Standards” because just doing the work is not enough.

Here are the 15 steps that we are walking through. Does it seem like a lot to do?

The Human Side of Competitive Intelligence

1. Find The Pain
2. Get The Job
3. Tease The Vision
4. Frame The Foundation
5. Setting Some Standards
6. Introduce The Brand
7. Accumulate The Tools
8. Back To The Vision
9. Secure The Budget
10. Build The Presence
11. Expand the Brand
12. Go For the Value
13. Recruit A Staff
14. Go On The Offense
15. Evangelize The Mission

Congratulations!

If you have gotten this far then you already spotted an important need for competitive intelligence, identified a senior leader that cares about it and managed to get the assignment to address the need. Even better than that, you worked into the discussion the topic “competitive intelligence.” Whether or not it really registered with your leader could be debated. They may have simply been glad to offload a difficult subject to a willing soul. Their expectations are low (and you should have tried to set them that way) but you have started toward a vision that will now become clearer soon.

More importantly, you have begun to set a people oriented tempo to your work.

You are recognizing (or at least hoping) that competitive intelligence will touch important areas for leaders in the company. CI analyses will show how well competitors are doing and sometimes how poorly your company is performing.

Meanwhile, leaders and peers are invested in how things are going. They set in place strategies that they think will be effective. And your work will eventually help them be more successful. However, that time is in the future. Between now and then is a minefield of egos, insecurities, turf wars, differing philosophies and more. Don’t worry too much, you can get through it. I’ll help you.

What’s next in our slow march to introduce a successful competitive intelligence program into the organization?

You tease them.

There is more than one meaning for “tease.” Sometimes I tease my children in a humorous way. I am trying to be funny and share a laugh with them. This isn’t what I would do in the office. Rather, a “tease” there is more like a small bite of an appetizer that is fine when tasted but provokes an even stronger desire for what might be coming. The small bite makes you lust for a full meal.

Why tease the leader in your response? There are two reasons.

First, you aren’t ready to serve them a “full meal” of competitive intelligence. The full meal definition will become more apparent as we continue our discussion. Suffice to say that when you only have an appetizer, then you feature the appetizer. Remember that your leader does not expect much so one especially good serving of anything will probably delight them. Don’t overpromise.

Second, even if you have everything ready (e.g., comprehensive information, immaculate presentation, credible strategic recommendations, solid quantitative and qualitative backup, etc.), it will not be accepted by an unsuspecting leader. They simply are not likely to be ready and you will actually damage your credibility if you attempt to “force feed” them. Don’t over deliver.

Here is what is in the “tease”

You goal is to begin establishing a pattern that will characterize all of the competitive intelligence things that are to come. The pattern will eventually lay the foundation for your personal competitive intelligence brand. (There are more things in the foundation but some are very important to start early.)

Here are three things to tease your leader

Do these steps well and you may just earn another bigger competitive intelligence assignment.

1. You will state the problem using their language and their measurements of success.

Why? Because you want to be known as someone that attempts to understand the larger problem from the leader’s perspective. It is possible that you won’t get this exactly right the first time. However, the attempt will be noticed and if it leads to discussion, your standing will increase in the leader’s eyes.

Assuming that you are presenting information in a slide format, a practical way to do this is make the first slide a summary of the key question and the success metric for the business.

2. You will demonstrate superior collaborative skills.

How? You will do this by showing that you talked to other key people about the topic. Sounds simple and some people assume that this goes on all the time. The all too common problem is that it doesn’t. You will be different. You will canvas people on all sides of the topic, inside and outside the company. Their feedback (even their dissent) will be included and credited in your presentation. You will be the honest broker of information.

A simple approach is to include a list of contributors on the title slide. Also, at key points in your presentation, you can point out who provided key inputs. Aside from showing how you collaborate, you want to indirectly stroke those that helped. You’ll need them later.

3. You will show evidence of interpretation.

Many people will focus on the “what” question. That is, what is happening? The answer is presented exhaustively as a set of facts. That good as far as it goes but a senior leader has way too much “what“ information and precious little “so what” interpretations. Again, you will be different. You will try to give the meaning to the information that you have uncovered.

Expect that there will be discussions and disagreements with your meanings (this is actually a very successful outcome). Your bona fides have not been established yet. Nonetheless, simply trying will make you stand out.

There is so much more to do. That’s why the three steps that I have outlined are only a tease.

You might decide on three different steps for your tease. Whatever you decide, the important concept is to preview what is to come, to introduce new things in ways that are easily accepted and engage your leader in such a way that they will ask for more.

It is worthwhile to sketch all of the other things that will guide you over the next few months. That’s a more complete foundation than the simple tease. That’s the menu for the full meal. Ah, I can almost smell it now.

Next topic is “Frame the Foundation”.

Here are the 15 steps that we are walking through. Do you see something that is missing?

The Human Side of Competitive Intelligence

1. Find The Pain
2. Get The Job
3. Tease The Vision
4. Frame The Foundation
5. Setting Some Standards
6. Introduce The Brand
7. Accumulate The Tools
8. Back To The Vision
9. Secure The Budget
10. Build The Presence
11. Expand the Brand
12. Go For the Value
13. Recruit A Staff
14. Go On The Offense
15. Evangelize The Mission

That is, because of your interests, skills and initiatives, you convince someone to assign to you what you wanted all along.

Competitive intelligence positions are often like that. As I described in my “Find the Pain” entry, it starts with recognizing that something is missing in the organization and seeing that the missing element is causing real pain to someone in leadership. Though their response to the pain may not be the immediate formation of a competitive intelligence function, there is an opportunity for someone with insight to gain such a role.

What does it take to get the job? There are two important points to remember.

First, ask for the job by name.

That means that using “competitive”, “competitor” or “intelligence” in your discussions is important. At this stage it only signals the domain of your effort. It does not mean that the leader has to authorize a budget, commit significant personal time or invest their prestige in the effort. It does alert those that are observant that you might be about a larger, more valuable task.

Using the examples from my previous post, here is what you might say to your leader to get their support to move to the next stage.

• They have been asked by their manager to present an overview of the competitive environment and realize that they only have the barest understanding summarized.

“I’d like to pull together a summary of competitive information for you. I could post a presentation for your review shortly about our top three competitors. Would that be interesting to you?”

• Their business results are being directly and obviously affected by a competitor move that blindsided the organization.

“I am researching how competitor X goes to market without us knowing something about their intentions. As I uncover intelligence about what they did, would you like to see the highlights?”

• Multiple competitors are repeatedly introducing better products and services and the manager does not know how they can do it.

“I have some speculation about how our competitors are operating that allows them to beat us to market. I think that some competitive intelligence might be useful to plan our countermoves. Would you like to see the conclusions from this study?”

• A key customer is contemplating a switch to a rival and tells them that their offerings (which they assumed were the best) are not competitive.

“I plan to speak with our sales team to get to the bottom of what our customers are telling us. I think that I can succinctly summarize the key differences between their products and ours. Maybe using this intelligence we focus of what improvements matter most.”

• The manager’s goal to increase sales and profits has stalled and no one can explain why this is true.

“There seem to changes happening in the competitive environment affecting our performance. Perhaps studying the market forces and presenting them to you would help us refine our strategies. Is this interesting?”

In every case, we are asking for a competitive intelligence role but in a way that is easy for a senior leader to accept. It is also fair to note that we need to be concerned about others in the organization. However, if you are just starting and are modest about your ambitions, they are more likely to be cooperative than obstructive.

Implicit in asking for the job is setting expectations about the expected benefit.

So, the second major point is to promise improvement, not solutions.

It is unlikely that you will create or uncover something that will fully and immediately address whatever competitive gaps exist. Even if you did have that valuable knowledge, it is quite likely that you are not well prepared to sell it to senior leaders. Starting a new competitive intelligence program requires you to think through how people accept new information that may contradict their established views, how to collect information from many information silos and owners that exist in the organization and how to present conclusions when you might not yet have the personal credibility with the thought leaders.

You have to move slowly and methodically to become credible, to gain allies and to build relationships.

There is an axiom that consultants are advised to follow. The axiom says to never promise to solve a client’s problem. Instead, promise to improve things by 10%. Not only is this reasonable in many organizations that view change skeptically, it makes the change process more tenable for the people that are affected and required to support the change.

Make no mistake about it. If you hope to introduce effective competitive intelligence into an organization where it has not previously existed, you are going to affect how business is conducted, how strategies are evaluated and how people view the future. This is overwhelming for most to comprehend. Move fast and you will guarantee the quick and cheered demise of your fledgling effort. Move with wisdom and you can create something durable and incredibly valuable to your leader and organization.

Circling back to asking for the job, note how you are simply asking for a task assignment rather than a full time job. Once you have the initial task assignment with the right expectations, it is time to give your leader a taste of what is to come.

Let’s talk about how to “Tease The Vision” next.

The Human Side of Competitive Intelligence

1. Find The Pain
2. Get The Job
3. Tease The Vision
4. Frame The Foundation
5. Setting Some Standards
6. Introduce The Brand
7. Accumulate The Tools
8. Back To The Vision
9. Secure The Budget
10. Build The Presence
11. Expand the Brand
12. Go For the Value
13. Recruit A Staff
14. Go On The Offense
15. Evangelize The Mission

Plan A will lead to 30% sales growth this year! Our new product will blunt Competitor X’s market share and result in 10% incremental profit. All we have to do is get everyone on board with the new strategy, shift the execution focus and convince the potential customers and we will win!!

We do similar things in competitive intelligence. We start with a noble goal of understanding what every significant competitor is trying to do. Add to that knowledge of the market forces at play. Then, almost magically we hope, the organization will snap to attention to devise the tactics needed to overcome the competitive gaps (leading to the 30% sales growth, of course). More than that, we will be universally welcomed for our valuable contribution to the organization. Let the praise rain down on our heads.

The only problem is that things are not that simple. Much as turning an ocean liner is a slow process that cannot be abbreviated, establishing an effective competitive intelligence system to deliver significant results is not a fast process. Aside from the knowledge and techniques that are required, there are many human elements that affect progress. Would it be surprising to you that many of your assumed allies and supporters are not rooting for your success?

For instance, competitive intelligence needs the sponsorship of a senior leader in the organization. That leader may or may not recognize such a need. Indeed, perhaps they think that asking for help would be viewed as a sign of weaknesses. Why don’t they already know what their competitors are doing? Is the identification of a competitive gap an indictment of their strategy?

Sometimes the ownership (and presentation) of competitive information is embodied in a person or organization already. If that is true, then an attempt by someone else to furnish competitive intelligence information may be viewed as threatening. Preserving their position easily can take precedence over supporting the common cause of effective competitive intelligence.

Maybe there will be a sense that competitive intelligence has already been tried once and the results were not helpful. (It’s worth noting that almost any overhead function is subject to such criticisms. Going back in time will always uncover a related failure.) Organizations have institutional memories that can be used for many purposes and there will be in-house experts that can use those memories to slow or block most any new move.

And the list can go on. People and their response to change are probably the largest determinants for the success of a new competitive intelligence program. The people within the organization are more important than the tools, computer systems, training, presentation techniques, insightful interviewing and any other element of the competitive intelligence system.

Over the next month I will take you through the major steps in establishing a competitive intelligence system. At each step, I will explain all of the details (which I just said were less important than the people). But (and this is a big “but”) I will focus on the impact on and role of the people in the organization.

Here are the 15 steps.

The Human Side of Competitive Intelligence

1. Find The Pain
2. Get The Job
3. Tease The Vision
4. Frame The Foundation
5. Setting Some Standards
6. Introduce The Brand
7. Accumulate The Tools
8. Back To The Vision
9. Secure The Budget
10. Build The Presence
11. Expand the Brand
12. Go For the Value
13. Recruit A Staff
14. Go On The Offense
15. Evangelize The Mission

Stay tuned.

Are black and white questions the best type of questions for business strategists?

The virtue of a black and white question is that the answer is succinct and distinct. There isn’t debate about whether we should develop a new product since the answer is “yes” or “no.” We don’t endlessly wonder about entering a new market because we can get a concrete answer quickly. New trends are less worrisome because we decide simply whether they will happen or they won’t. Nice. Tidy. Quick. And dangerously simple.

Strategy is best dealt with in grayscales

A grayscale implies that there are gradients. Gradients, in turn, imply that the future is blend of influences. Intuitively we recognize that this is true at work. Seldom do major decisions get made with a simple yes or no. There are debates, arguments, counter proposals and reflection. After much gnashing of teeth, an answer finally emerges. The effective strategist eschews the simplicity of black and white thinking and chooses to live in the gray zone. How is this done?

Banking on “it depends”

My graduate school professor once told me that the right answer to any complicated question is “it depends.” Amazingly, as I have practiced this in my work life, these two words often served to silence those that were trying to trap me into black and white thinking. My opponents retreated to attack another day when I might ignore the fact that life and strategy is complicated. (May their wait truly be long.)

Of course, the right retort would have been “it depends on what?” This is where a strategist makes money. For example, will mobile banking become a significant, consumer demanded service in the future? Snapshot answers (e.g., is it important today, will it be important in 2012) may be “yes” or “no”. More helpful are the answers which explain what has to be in place (e.g., technology, business models, competitive forces, etc.) for this type of service to be broadly available and seen as a differentiator in the market. This is less like a snapshot and more like a constantly changing movie. When all of the components of the “movie” are identified, then the strategist can make arguments, assemble evidence and track competitors with respect to those components.

Shift the question from “what” to “when”

Think for a moment about baseball. One of the hardest things to do in sports is to hit a baseball. It requires many skills including good hand-to-eye coordination, proper balance and superb eyesight. Still, the most important determinant of getting a good hit is timing. The batter has to time the arrival of the pitch (and its trajectory) with precision or else failure is almost certain. This is why pitchers (i.e., their competitors) are fundamentally trying to upset the batter’s timing. And, not surprisingly, the very best hitters fail almost seventy percent of the time.

Strategy is similar. It very often is about timing when a market will mature or when a specific product investment should be made. It’s about tracking the moves of competitors and understanding when their offerings will endanger your competitive position. It’s about using dynamic market feedback of all sorts to adjust the speed of responses and initiatives. (Sometimes we should go faster and sometimes we should go slower.) It’s about having a fine tuned sense of those critical dependencies and meshing them together (using models and other tools) in such a way that they can be viewed for discussion and debate.

Here are some reminders to get you to the strategist’s gray zone (and keep you there)

1.       Practice responding “it depends” to questions about the future

2.       Be ready to explain the dependencies

3.       Put things in place to monitor the dependencies over time as they change

4.       Create a model to show how the dependencies fit together and affect your business

5.       Regularly hypothesize possible competitive responses

My eye doctor can prescribe vision correction lenses. His methods work assuming that I actually wear the glasses that he prescribes. Though it may be counter intuitive at first, the strategist’s gray zone is actually much clearer and more valuable than the black and white world. Though it does not guarantee success, it does produce strategy that is richer and more effective than other mindsets.

Do you agree?

Meanwhile, in the rest of organization, people come and go to work each day. They often know little of what has been decided. Or, if they have received the pronouncements from on high, they selectively integrate what they consider important into their work plans.

So, how can you tell that the business strategy is working?

There are usual external measures of revenue, profit, market share and so on that are typically used to measure the effectiveness of strategy. These are critical measures, of course, but they are lagging indicators when a new strategy is introduced. Often the first measures of strategy effectiveness come from the internal organization.

What should a manager look for to understand if the strategy is working within the organization? Here are my five success indicators to monitor.

1. Managers are modeling the changes. At all levels, a new strategy implies change (otherwise it isn’t new). If management expects change to occur only because of announcements, then the strategy is unlikely to be effective. People are sensitive to strategy fads which come and go. However, they are similarly alert to real change in people.

2. Success measures are being understood. It is not enough to have a bright idea. At some point in time, the performance of the strategy must be measured and the measurement must be understood (and accepted) in the organization. People that understand the external measures begin to adapt the internal reward system accordingly.

3. Competing strategies are retired. The temptation for management and organizations is to retain the familiar. If a significant new strategy is introduced, a significant old strategy must be retired. Not only does this make sense to the larger organization (sensible behavior is important), it establishes the credibility of leaders to focus the organization.

4. Increasing focus on the future. A temperature reading of the organization will reveal that people are talking more about the future than the past. It should be no surprise that a backward focus is a drain on the organization’s energy. Befuddled leadership, ineffective strategies and risk aversion prevent an organization from solving tomorrow’s problems. A strategy starts to work when an organization is energized about what is possible to achieve.

5. It is becoming personal. The best leaders create bridges between their organization and the vision. People then make conscious decisions to move toward or away from the vision. A strategy’s effectiveness can be measured by the extent to which employees own it. Increasing ownership means increasing alignment with the vision, greater problem solving and broader participation. Simply put, people commit themselves by crossing the bridges.