Strategic Leadership - Standardize Vocabulary and Agree On A Toolset

Standardize Vocabulary and Agree On A Toolset

Strategy making that enlists large groups of employees needs a common vocabulary and a common set of tools in order to be effective. Deciding on a vocabulary is not difficult but it does need to be done with intent and with a sense of discipline. The number of terms that get used during strategy making seems at times almost endless and includes such words as Vision, Mission, Fact Base, KPI, Goal, Objective, Scorecard, Driver, Strategic Action Plan, Strategic Issue Analysis, Governing Principle, and Metric to name a few. Establishing a common vocabulary begins and ends by getting alignment around three questions, “What does X mean? Why and when is it used?” and “Is X necessary in developing the strategy and building understanding and ownership for it over time?”

Closely linked to the need for a common vocabulary is the need for a common set of frameworks or tools to build your strategy. In many cases, toolsets come with their own embedded vocabulary. Some leaders use relatively more elaborate tools such as shareholder value add (SVA), computer modeling, and scenario planning.

Other leaders tend toward simplicity. Jack Welch described his toolset as a series of 5 questions with the answers ultimately leading up to what he called “the Big Aha.” His 5 questions included:

1. What does the playing field look like now?
2. What has the competition been up to?
3. What have we been up to?
4. What’s around the corner?
5. What is our winning move?

There is a great deal of useful vocabulary and many fine toolsets in the strategy marketplace and no shortage of advocates for one or another of these. The important outcome is that the leader, as the executive leading the strategy process, needs to select a vocabulary and a toolset, use it consistently over time and require others in the senior and middle ranks of the organization to do the same.

Finally, when deciding what vocabulary and toolset is best to use while working across large populations, simpler is usually better. The simpler the language and the fewer the tools, the more accessible the strategy becomes to larger groups of people and the more people can understand it, know how they should think and talk about it, and identify how they can contribute. Some situations require more sophisticated (i.e. more complicated) tools because there is a need for much more thorough analytics. Many do not. The right balance point between comprehensiveness and simplicity will provide enough analytical complexity to adequately describe the marketplace, the customers, what you do and how you will compete, but nothing more than that. Simplicity, where it can be found, makes a significant difference when working across a large population.