Living With Strategic Tension
Tom Coughlin at the New York Giants and Andre Villas-Boas at Tottenham Hotspur in the English Premier League have in recent weeks seen remarkable swings in the betting markets on how long they would retain their jobs. Two-time Superbowl winner, Coughlin on the back of a horrible early season saw his odds contract to 3/5 by early October to lose his job, and Villas-Boas on the back of one traumatic defeat to Premiership rival, Manchester City saw his odds cut in the space of three days from 50/1 to even money. Both have subsequently engineered recoveries of sorts, and their odds have rapidly drifted again to calmer waters.
This begs the question, why?
To the outside observer little has changed with their strategy. What has changed is the demands placed on each coach by their key constituents (fans, owners, players and the media) for short-term and long-term results. That disparity between strategy and constituents' demands is what I term "strategic tension". It has both logical and emotional elements.
It takes a certain type of individual to want to put themselves in the hot seat and accept the wild swings in the risks and rewards that goes with the job and the career.
The same applies to profit centre heads and those with profit and loss responsibility in business, albeit typically the demands of their constituents are more rational and civil. In just the same way as the football coach or manager operates, profit centre heads particularly those travelling over rough terrain (entering new markets, exploiting growth in volatile economies, reliant on a key customer) must have in place both preventative and contingent actions. How many of these do you have in place in your organisation or can quickly develop:
Preventative: (1) The goals and beliefs of both senior and middle management are aligned at all times and their self-interests (2) Strategy debriefings for customers, shareholders, employees and other communities (business partners, government, uniones etc) include additional information, candid feedback on valid or invalid assumptions, timely notification where the constituents direct or indirect intervention is required and so on (3) A constant dialogue of positive news exists informing constituents about the organisation's progress and success and their own contribution. (4) Senior managers willingly listen to the demands of their constituency, they don't take criticism personally, nor hide from taking personal ownership of the issue and doing their upmost to find an objective alternative (5) They don't play politics with constituents' demands, nor allow themselves to be caste as a martyr for a long-standing issue they cannot reasonably resolve on their own.
Contingent: (1) Senior managers seek to find the cause, not the effects of the "strategic tension". (2) They are ready to step in and wield their power when the situation demands it (conflict between rival departments, business or managerial performance and so on). (3) They are readily accessible to constituents and visibly leading the response to their demands. (4) They enforce accountability throughout the business for both short and long-term results amongst their subordinates. (5) They understand that their own self-confidence and self-worth has a direct correlation on their constituents' confidence. For example, faced with the loss of a key client, a failed investment or a bad assumption, they understand that it is what they do, not what they think that will increase confidence.
Please look out for a future post on my blog Market-Leading Growth with greater detail, a powerful process visual and a podcast illustrating how to live with a healthy level of strategic tension.
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