Sometimes effective strategic decision-making is avoided. Not because the company lacks the capability to make these types of decisions. Rather, companies fail to grapple with strategic issues because of preconceived notions. Often these perceptions are based in myth, not reality. I’d like to examine one common myth, “I don’t have enough time to make strategic decisions.”
Myth assumption: this myth is rooted in the belief that strategic decisions will require too much time to address, thus, the company will perform better by focusing on activities that drive short-term results.
Let’s face it; almost always there is a bit of truth in myths. In this particular case, a strategic decision can take a great deal of time to resolve using conventional approaches. There are several reasons for this:
- Strategic issues are complex. By nature, strategic decisions have an impact on the entire company. This means they can impact multiple departments in the company. And because strategic issues most often affect how the company deals with its environment, the issue impacts many outside the company: customers, suppliers, and stockholders. So with this many stakeholders, there will be a need to dig deeper to gain understanding and collect facts to guide the decision. Complexity increases because there are many potential approaches from which to choose.
- Since multiple business functions are involved, strategic issues are viewed differently based upon the varied perspectives of each group. While this divergence of thinking ultimately drives to a better decision, in the beginning these different perspectives may require time to bridge. In addition, the disparity of expertise between the functions may make it difficult for one discipline to understand the detailed explanations of the other. Congruence among the team can take time. Finally, people who think differently take a longer time to trust the opinions of others.
- Strategic decisions are different from the business decisions employees encounter on a daily basis. Strategic decisions usually have no right or wrong answer. All of the options under consideration have merit. So the decision team is not culling bad ideas, they are selecting the best alternative from a group of good ones. This is usually a more difficult task which requires time.
These are strong arguments for the fact that strategic issues require time to address. Where our myth unravels into fantasy is the statement that we executives do not have the time to resolve them. Let’s think this statement through.
As we managers progress in our careers we learn to balance the demands on our time by prioritizing our schedules and activities. We make time to accomplish our most important tasks at the expense of tasks we feel are less important. The tasks we complete are the ones we prioritize at the top of our to-do list.
So let’s not fool ourselves. An executive has the time to focus on strategic activity; but actually focusing on it is a matter of will. Where that strategic activity fits on the priority list determines whether it will be resolved. If there’s no activity, the executive has decided that other activities are more important.
Most of us are familiar with Stephen Covey’s Time Management Matrix1 which classifies activities according to: a) importance and b) urgency. Covey set up a four-quadrant diagram by scaling these two characteristics from low to high. He indicated that executives should focus on quadrant 1 activity, where both urgency and importance were high.
Covey observed that managers become consumed by urgent problems. I believe that in our zeal to resolve these urgent problems we become trapped into thinking that all urgent problems need to be addressed, at the expense of the important issues. In essence we focus on the two high-importance quadrants. When this occurs, we neglect to devote time to important issues like strategy.
So, should strategic decisions make the cut? In today’s business world, achieving short-term financial objectives is the urgent issue of senior managers. True, making strategic decisions usually does not bring immediate financial rewards. But they set the course for the business and align the corporation to achieve greater future results. For instance, consider a strategic decision to apply a company’s technology into a new market. If successful, this undoubtedly can create much higher revenue growth than an operational decision like implementing a new warranty policy. So I am convinced strategic issues belong in Covey’s quadrant 1. For a company to attain its lofty growth goals, strategic issues need to make the cut on executives’ priority lists.
It is fair for you to say, “Okay, I’m convinced. Strategic decisions should be prioritized. But where do I get the time to perform such a complex task?” The answer lies in applying a new approach for your strategic decision-making. A properly designed decision-making process should reduce the effort required to make good decisions by:
- introducing approaches that reduce complexity;
- offering avenues that allow multi-disciplinary teams to communicate clearly;
- cutting data collection and analysis requirements; and
- providing structure to easily select the best strategic option.
With the right tools, organizations can find the time to treat strategic issues as a quadrant 1 activity and resolve them without hampering short-term financial results.
1. S. R. Covey, The 7 Habits of Highly Effective People (New York: Simon & Schuster, 1989)