Ep 12 Getting Executives to Think Strategically

It's the Jump Leap Long Term Podcast, Episode 12. You're attending a strategic planning offsite and notice that the room has been quiet. Apart from the usual contributions from the CEO and experienced members of the C-suite, the others are silent. When they do speak up, it seems as if they're in a regular department meeting addressing daily concerns. They aren't thinking strategically. You want to intervene, but don't even know, you know, where to begin. Tune into this episode to hear from me and my special guest, Sviatoslav Birulin, as we solve this wicked problem together. I'm Francis Wade, and welcome to the Jump Leap Long Term Podcast. And welcome back. And as you can see, we're joined by my special guest today, Sviatoslav Biryulin. And before I introduce him, let me talk to you if you're— this is the first time that you're actually witnessing this podcast and wondering what the heck is going on. Well, this is a problem-solving discussion. It's unlike other podcasts you may have listened to, which mostly follow an interview format. Today we're going to be working together on a single problem related to the introduction that I just gave, you know, the problem of strategic thinking. And to do that, we're going to spend most of our time actually dissecting the problem. Maybe 75% of the episode we'll spend in diagnosis. And as we diagnose and tear apart the solution— tear apart the problem and look at it from different angles, you're going to hear us use a bell, which indicates some brand new insight, some serendipity. So this is a show that's all about creating serendipitous insights. We're having a discussion, and it's almost as if we forget that there's an audience here, but we have the recorder going. Both of us are approaching the problem as if we don't have the answer, but we have indications as to what— where the answer may lie. And in the conversation, we want to actually discover new insights. So we're hoping to move the needle in a positive direction and to find some unexpected and unplanned insights, things that we didn't have before the conversation started. Einstein said if he had an hour to solve a problem, he'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions. And that's what we're going to do today. Our intention is to give you the maximum value.. And when you hear us make one of those serendipitous insights that we didn't have before, you'll hear a bell. Now, if we get to the end of the conversation, and time runs out, and we haven't had any new insights, we'll play a buzzer, which shows that time ran out. And, and here we are. So right before I introduce Svatoslav, let me tell you a story about Alo. So she's a new executive. She has worked in the company for almost 2 decades, working her way up the ranks. Her hard efforts have paid off, and she developed a reputation for hitting annual targets and engaging others as she's doing so. But as she sits at her desk one winter morning, she stares at an invitation, an email invitation to her first strategic planning meeting. So she's been to them in the past as a visitor, you know, maybe dropped in on a few meetings, but This time around, it's the first time she's attending as a full participant, but she's there for the entire meeting. And as an executive, she's playing a big role, and she's concerned because her CEO, in addition to the invitation, has sent a memo with several articles on the topic of strategic thinking. No. The phrase strategic thinking has a particular kind of meaning to her because she recently had a performance management review, and guess what? Her boss said that she's not showing enough skill in strategic thinking in her work. You know, she said, you know, he said, you know, Ala, you know, I have an area for improvement for you, and it has to do with strategic thinking. So she's done a bit of research on the topic, and she's confused. What is he talking about? And now she needs to actually do some strategic thinking in the retreat that's coming up. However, she does feel a little bit, you know, some confidence because she has been hitting all of her deliverables right on time. But He told her that even though, you know, she's been doing that, it's kind of like not enough because she's been thinking and behaving like a tactical manager rather than a strategic executive. And that's what he really wants. And meeting her objectives is necessary, but it's not sufficient. It's not, it's not her being like an executive and thinking strategically. And that's what he really wants. So she's been doing the research. As I said, on the topic, and the more she reads, the more lost she feels. So let me take a moment to introduce our special guest today, Sviatoslav Berulin. So Sviatoslav is a strategy consultant. He's founded his own strategy consulting boutique. Over a period of 20 years, he's worked in a number of commercial enterprises, and he spent 13 years as a CEO. Since 2012, he's been on a number of boards of directors of companies in various countries, including strategy committees on those boards. He's an active blogger and a publicist, and he lives in Ljubljana, Slovenia. Sviatoslav, welcome to the show.

Many thanks for having me. Thanks, Francis. Great.

Uh, so let's jump right in. What do you think of Ala and the situation that she's in? Is it— does it— I know it rings a bell, but you know, is this one that you have seen in your practice as a strategy consultant?

Uh, I've not only seen such situations many times, I used to be the same executive. I was promoted quite fast. I used to be middle manager, but due to some circumstances, I was promoted in a year, and I became a CEO of the company. And when I was promoted, my shareholders told me that the first thing I had to do is to develop a new strategy. And I didn't have an idea how, how could I do it, what to do, what to start with. And I also started reading some books, uh, and moreover, I was in the middle of my MBA program in strategic management, by the way. But unfortunately, even when I finished this program, I knew little about what strategy means, what strategic thinking means. So it was quite a journey. It took me several years to understand what strategy is and how do I deal with the strategy, how do I develop the strategy. What my team has to do. So this situation is quite typical, and even the executives who has some education, uh, who were educated in strategy and management, they rarely, uh, are able to think strategically. So that's quite, quite a common problem, right?

And I'd like for us to touch on in a little bit later kind of why that is, that MBAs don't produce people who can run a strategic planning process. But let's, let's, let's focus on where Ala is at and where you were at in that moment, because I see it often as well. You know, this business of— there's some people who are old hats. You know, I assume most CEOs are, you know, their experience, they've been through this strategic planning cycle a few times, and they're in the meeting and they often spend time talking to the people who have also been around the block a few times. And then there are those who are newer, who aren't used to leading strategy, and it's almost as if the room is split in two. Some who are thinking and talking, and the others are like, like watching, right? Because they're trying to figure out what's going on, what's going on, and everything that they've been taught to do and the way they've been taught to think isn't helping them in that moment. Because in that moment, they're like scrambling to follow. Where did that come from? Or why did it— no, but they're also doubting themselves because they're thinking, if I say the wrong thing, they're going to think that I don't belong here and I should be just somewhere else and I shouldn't be wasting people's time. And they're really struggling. And it takes maybe you know, 90% of the way through the retreat where they finally— something goes click and they're like, you know, I have— and they finally get something to say. Now at that point, all the decisions have been made and it's kind of like the whole thing is wrapping up, but it's almost as if they are unable to get themselves to think strategically on their own and they end up learning it because everybody else is doing it. But that learning curve is a little bit— not a little bit, it's too late. It's, it's too late and it's too, it's too hurried. And by then the decisions have been made. I said, okay, great, so we're going to reorganize your department, Francis, and take away all your resources. Wait, wait, hold on, hold on. By then, you know, you really should have spoken up at the beginning of the retreat, not at the very end, to say, well, you know, now that we think, talk about it, I forgot to bring this thing up. But this happens all the time. And I know executives, as a team, they want to onboard new executives as fast as possible. And I know they don't want to wait until the retreat to do the onboarding because run into the problem that I just mentioned. Um, so we're going to talk about, you know, why that is and why that happens. Um, and I think we're on the same page in saying that this— it, it, it— from my experience anyway, it always happens. This isn't like, um, you know, we're talking about a few people who aren't, um, competent. It's that, it's that there's— I've not come across any kind of preparation for someone who's— maybe there's the natural, some natural thinkers out there who are naturally thinking strategically, but there's no way to reliably take a manager and turn them into a strategic manager that I've seen. Does that echo your experience? Hope you're enjoying this free excerpt from the Jump Leap Long-Term Strategy Podcast. Interested in finding out more about getting a subscription to full episodes? Visit www.longtermstrategy.info.

No, I have seen people who read a lot of books on strategy, who finished courses on strategy, but I believe that strategic thinking is not about— it's not a skill. It's a mindset. They need to switch the way they think. And I believe a good manager, a good superior, a good leader, a good boss can be of much help because I believe that only the strategic thinking can be only taught by example. So if an executive, a recently promoted, newly promoted executive has a strategic thinker as a superior, for instance as a CEO, they will learn thinking strategically quite quickly. And I believe it's the best way to, to do it. Unfortunately, I didn't have such superiors and I, I had to taught myself by, by practicing, making a lot of mistakes. But I believe that if the CEO is a strategic thinker and she or he can give a couple of examples of what it means to think strategically. I believe that if there's an executive, if Ala is smart, intelligent, and if she's motivated to learn, she will do it very quickly. Because actually, what does it mean thinking strategically? For me, it's thinking in systems, first of all. Because every company is a system, a complex one. There are a lot of processes, a lot of people, a lot of relationships inside the company. So it's a system which is embedded in a more complex system, for instance, a market. And in turn, this second system is also embedded in an even bigger system, a society, economics, a country, culture. And international value chain and so on. And the quality of work and the quality of strategy, if you want, it depends on the quality of the relationships both inside this initial first system, the company, and depends on the relationships between this system and other systems. And when, when a person sees this, this is multi— this is a complex multi-channel internal relationships between these systems, as soon as Alla sees it, as soon as she understands that to think strategically she needs to take all these connections into account and to keep them in mind, I believe since then she will be able to think strategically. All the rest is techniques, frameworks, tools. They will be helpful, but as soon as she sees those complex connections, at least it will be the first and most important step into the world of strategic thinking from my point of view.

Great, let's hold on to that because it is a part of the solution, a possible solution. And I know that some of our listeners may be asking or thinking, you know, I don't really understand what the problem is. Because if, if half the room isn't thinking strategically, well, you still have the other half, right? The other part of the organization in a retreat, if only 5 people aren't thinking strategically, where you can count on the other 5 to do so, or even the CEO, CEO might be the only person and the other people aren't. But what's the problem that companies have when there's a lack of strategic thinking in a retreat, in a meeting, or in a strategic planning process? Why is it a big deal? What have you seen?

It's a big deal from my point of view. It's a big deal because strategy is a collective work and everyone must be involved. Everyone in a conference room, in a boardroom must be involved because They take part in this meeting not by chance. They take part in this meeting because their functions are critically important for the company from the strategic perspective. For instance, maybe Al works at the HR department.

It's right, for example, good example, or finance department, or logistics departments, procurement departments.

All these parts of the company are critically important from the point of view of success, for their future success. So, they all must be on the same page. And if a CEO sees or realizes that he or she is the only one who thinks strategically, or when half of your team is able to think strategically and another half isn't, the only way from my point of view they can do, the only thing they can do is to ask right questions. Because when people start thinking of answers and if those questions are really right, are really strategic questions, they will gradually understand what strategic thinking is about.

Right, right. So I've been on the receiving end of that as a facilitator where I've talked to somebody before the retreat and they have some strategic ideas. And then in the retreat, I'm kind of looking at them when the topic comes up and they're like blank. They're not speaking up. They're not doing what they're supposed to do, right? They're not taking the conversation, they're not leading the conversation the way it should. And even the CEO might be, you know, sometimes hinting that, you know, Ala, given that you're the head of HR, what do you think? And Ala is like, um, I agree. And Ala is like lost in the moment of— she doesn't realize that this is the time for me to step up. And as a result, they have the whole conversation, and they leave something out, but that is essential to the strategy. Because Ala isn't thinking strategically in the moment, and she doesn't bring forth the part that only she knows. Now, sometimes she might whisper to me and say, um, why don't— why aren't they talking about like doing a company transformation? And I say, that's your part. Say it, say it, say it, go ahead. Because like, you know, I'm not— I don't know the function well enough to be able to do Allah's work for her. But, but Allah doesn't say anything. And then the company, company strategy therefore has a big hole in it because Allah didn't take the risk of, of speaking strategically in a way that the others could, could notice. So I've had that kind of drama. Have you other— have you had similar kinds of interactions? People who are thinking strategically?

Yes, I have seen such interactions. And I believe that asking her "Allah, what do you think?" It's the wrong way to ask strategic questions.

You've reached the end of a complimentary clip from the Jump Leap Long-Term Strategy Podcast. To hear the full episode, go over to www.longtermstrategy.info and grab a subscription or a free trial. See you there. And here's the excerpt from our next episode. So Luis is convinced he needs to make a better case for a long-term vision. So you may be someone who, you know, I imagine if you're listening to this podcast that you already believe to some degree in long-term strategic planning. So you already are in that school of thought. And, um, you probably are like Louise, that you have to battle some people who are real short-term thinkers. Among them could be your CEO. If your CEO, for example, is motivated or paid or incentivized by short-term stock options or short-term results, the board is holding. And if you like the work we're doing, Feel free to follow us at our website strategyconf.fwconsulting.com or like or leave a comment on one of the popular podcast apps such as Stitcher or iTunes. This is Francis Wade, and I'm signing out from the Jump Leap Long-Term Strategic Planning Podcast. See you later.