Recently we caught up with Roger Martin to talk about his new book Playing To Win: How Strategy Really Works. Roger is Dean of the University of Toronto’s Rotman School of Management and an adviser to CEOs on strategy, design, innovation, and integrative thinking. In 2011, Roger was named by Thinkers50 as the sixth top management thinker in the world. This is his eighth book; he also contributes regularly to Harvard Business Review, the Financial Times, and the Washington Post, among others. He holds an MBA from Harvard Business School and an AB in economics from Harvard College. Needless to say, Roger really knows what he is talking about when it comes to strategy.
Tony: You mentioned that many leaders wrongly define strategy as following best practices. “Sameness isn’t strategy. It is a recipe for mediocrity.” In ministry, many churches try to do the same set of activities but more effectively, why does this tend to be ineffective?
Roger: In industries in which the players simply benchmark one another and replicate, it is true that one player can move ahead of other players temporarily by doing the same things a little bit better. But since everyone is benchmarking and replicating, those advantage get eliminated pretty quickly and everyone looks the same – think of the US major air carrier industry, except for Southwest Airlines.
Why do I call this sameness mediocrity rather than excellence, you might ask? It is because I find in my work that the way standards of quality/value rise most quickly in an industry is when the players tack away from one another to try new and different things. That is when leaps ahead are made in quality and/or value. Indeed those advantages do get replicated over time, but as that happens, the whole industry becomes way better. Think Toyota and manufacturing quality. It leaped ahead of the Big 3 on quality, reliability and durability (‘QRD’ in the business) and stole massive amounts of share on that basis. The Big 3 had no choice but to overhaul how they did business entirely to be able to compete – and now the QRD for a Chevy or Ford is largely indistinguishable from that of a Toyota. So the consumer is much, much better off thanks to Toyota tacking away from the crowd.
I think that in the world of churches, successful innovators who make distinctive ‘where-to-play’ and ‘how-to-win’ choices will drive substantial enhancements to the experience of parishioners for the entire industry.
Tony: I loved the quote, “Without supporting structures, systems and measurements; strategy remains a wish list.” What are some next steps that a senior management team can take to improve this process.
Roger: The key is to focus very precisely on change, because the status quo tends to have an iron grip on any organization. So start by asking what needs to change about current behavior of employees throughout the organization for the strategy to be put into action? Once you have identified the change, ask the question: what keeps the employees doing exactly what they are doing now? Only when you have a clear diagnosis of the drivers behind the status quo, start designing structures, systems and measurements that would change the key elements of the status quo. Do they do what they currently do because the measurements and reward systems encourage it? Or do they do what they currently do because that this the only thing that they have training to do?
Tony: How can an organization decide what will enable it to create unique value?
Roger: The best way is to carefully observe the customer utilizing the product/service and ask questions about their experiences to understand what might make that experience more compelling. Note the order – watch closely and then ask. Most companies ask without watching and that generally means that they don’t have good insights on what to ask. So for example, if you watch and see that parishioners slip out the back with 15 minutes to go in the church service, you will know to ask about that (I noticed that sometimes you leave before the end of the service. Is there something that we do that causes you to do that?). If you haven’t observed, you will probably ask much more generic questions.
It is important to note that customers will rarely be able to tell you what you should do instead of what you are currently doing. They can tell you about their experiences. But it is your job as a provider to imagine and test with customers ways of improving that customer experience. As my friend and writing partner AG Lafley says: “Customer research doesn’t tell you the answer. It is only an aid to judgment.”
Tony: Once a strategy is developed, how can it be communicated at all levels?
Roger: This is a tricky and very important question which I have written about extensively and you may want to take a look at The Execution Trap – a Harvard Business Review article on the subject. (http://hbr.org/2010/07/the-execution-trap/ar/1)
The absolute key is not to communicate that this is our strategy and you people should execute it. The communication needs to say: “We have made some choices at the level of the overall organization. These choices set the context for you to make your important choices in a fashion that is consistent with our choices. If as you make your important choices, questions arise about the choices we have made or you would like assistance in thinking about your choices, we would be delighted to talk.”
In this way, strategy choice-making will cascade throughout the organization and everybody will feel the importance of their role. And most importantly, nobody will feel like a choiceless-doer, which I feel is the source of most employee disengagement and malaise.
