37. Sustainable You Model

Key Definitions

Something is sustainable if you can keep it up in the long run. In recent years, it has become commonplace to question the sustainability of our economic value-adding activities, as natural resources are being rapidly run down, while the ecological and social environment are being negatively impacted more quickly than they can recover.

But you can also run yourself down, choosing to achieve quick wins in the short run at the expense of your capacity to function and thrive over the long run. Where someone undermines their ability to keep up their level of performance over an extended period of time, we say they damage their personal sustainability.

Conceptual Model

The Sustainable You Model gives an overview of the four key areas in your personal environment in which you need to invest to remain in the game in the long run. With a wink to Muhammad Ali, these four “wings” of sustainability will allow you “to float like a butterfly, but sting like a bee”. Just as the UN has set 17 Sustainable Development Goals for the broader world community, this model presents 20 personal sustainable development goals for you as an individual.

Key Elements

The four key areas of personal sustainability are the following:

  1. Energy: Vitality Sustainability. To keep functioning in the long run, you first need to maintain your physical and mental energy. You need to safeguard your vigor and avoid running down your battery by paying attention to the five levers of sustained vitality:
    1. Fitness. Exercising regularly to strengthen your body and mind.
    2. Recreation. Taking time to rest, unwind, refresh, and recover.
    3. Sleep. Getting enough high-quality sleep at the right moments in the day.
    4. Nutrition. Eating a healthy, moderate, and balanced diet.
    5. Mindfulness. Being mentally present, calm, and open to new stimuli.
  2. Embeddedness: Relational Sustainability. Your healthy functioning also depends on maintaining the web of relationships in which you are embedded. As a social animal, you can’t thrive in isolation, but need to have warm interactions with five groups:
    1. Partner(s). One or more close companions, to have an intimate relationship.
    2. Family. Children, parents and relatives, to share time, love, and a sense of belonging.
    3. Friends. Best pals and good acquaintances, to talk, laugh and occasionally cry together.
    4. Direct and indirect co-workers, to team up with to achieve results.
    5. Neighbors and other community members, to live together enjoyably.
  3. Employability: Competence Sustainability. To keep functioning in an everchanging work environment, while ensuring that future career opportunities remain, you need to continuously upgrade your competencies. There are five levers of sustained employability:
    1. Keeping your information, understanding and insights up to date.
    2. Adding new capabilities to your repertoire of potential behaviors.
    3. Adapting your attitude and broadening your ways of thinking.
    4. Becoming clearer which principles you stand for and live by.
    5. Building a track record and a reputation in specific areas.
  4. Engagement: Motivation Sustainability. To keep functioning in the long run, you also need to remain inspired. Some activities will give a quick thrill in the short run, but to stay engaged you need to focus attention on all five levers of sustained motivation:
    1. Engage in activities that fit your natural strengths and avoid your weaknesses.
    2. Seek activities that you love to do and never feel like a chore.
    3. Find activities that are important to others and will help them out.
    4. Select activities that are valued by others and will be welcomed.
    5. Chose activities that are rewarded, both in terms of fame and fortune.

Key Insights

 

36. Change Manager’s Toolbox

Key Definitions

Organizational changes can range from small-scale incremental adjustments all the way to large-scale radical transformations. Whatever the magnitude, managers inside the organization, sometimes supported by consultants from outside, need to stimulate and guide change. In this sense, every manager is also regularly a change manager.

To realize change, managers need insight into change processes (see no. 25, Everest Model of Change), but also require tangible change management tools. These are ways of influencing what people do (intervention methods) in order to steer changes in the right direction.

Conceptual Model

The Change Manager’s Toolbox framework suggests that there are four change manager roles, each with four categories of tools. These roles differ along two dimensions. The first dimension is whether the role is focused on changing things (content-oriented) or changing behaviors (people-oriented). The second dimension is whether the role is focused on changing in a planned way (control-oriented) or in a more evolving way (responsive-oriented). All change manager roles need to be played by someone, but not necessarily by the same person. Which categories of tools are used will depend on the situation and the change manager involved.

Key Elements

The four change manager roles and their associated tools are the following:

  1. Project Manager. Every change can be seen as implementation project of getting from A to B, whereby the change manager needs to go through the classic plan-do-check-act cycle to ensure the effective and efficient execution of change. To run this cycle, the project manager will typically use tools from each of the following in four categories:
    1. Activity planning. Tools for determining which tasks need to be carried out and when.
    2. People planning. Tools for finding the right people and assigning tasks to them.
    3. Resource planning. Tools for providing these people with all the necessary means.
    4. Performance management. Tools for checking and incentivizing realization.
  2. Team Coach. Every change can also be seen as a team challenge of getting from A to B, whereby the change manager needs to coach the squad to work together in unison to be successful. To achieve this concerted effort, the team coach will typically tap into all four categories of potential tools:
    1. Direction setting. Tools to ensure all team members are striving towards the same goals.
    2. Expectation alignment. Tools to help mutual understanding and agree on shared rules.
    3. Team building. Tools to foster team spirit and commitment to each other.
    4. Conflict resolution. Tools to clear up interpersonal irritations and clashes.
  3. Learning Facilitator. Every change can also be seen as a learning journey of starting at A and finding out whether B is the right destination, whereby the change manager needs to facilitate the unfolding insight and to trigger the required adaptation. To achieve this ongoing learning, the learning facilitator can draw on tools from four categories:
    1. Learning from practice. Tools for gaining understanding from implementation feedback.
    2. Learning from experiment. Tools for discovering from controlled testing of assumptions.
    3. Learning from mistakes. Tools for drawing conclusions based on errors made.
    4. Learning from others. Tools for capturing and transferring best practices from elsewhere.
  4. Engagement Officer. Every change can also be seen as an uncomfortable move of going from A, inside people’s comfort zone, to B, somewhere outside. The change manager needs to win people’s hearts and minds to embrace this discomfort and then keep them engaged when the going gets tough. Four categories of tools are typically employed:
    1. Process participation. Tools to facilitate involvement and influencing of the change.
    2. Personal connection. Tools to help relationship-building and mutual bonding.
    3. Confidence building. Tools to stimulate people’s conviction that success is attainable.
    4. Inspiring leadership. Tools to encourage people to follow the change leader.

Key Insights

35. Corporate Value Creation Model

Key Definitions

A corporation is a firm consisting of two or more business units. Each business unit creates economic value-added for the corporation by producing and selling products and/or services in a particular market at a price higher than the cost per unit. If corporations only engaged in this standalone value creation, their overall value-added would be the sum of their parts.

Yet corporations also add extra costs to their business units by having at least one extra level of management. Therefore, they need extra corporate value creation over and above their standalone value creation activities to more than offset these additional corporate costs.

Conceptual Model

The Corporate Value Creation Model describes the four ways in which a corporation can create extra value, on top of what a business unit could have achieved on its own. Horizontally, the four value types differ in the length of time typically required to realize the intended value-added after launching or acquiring a new business. Vertically, they differ in how much they interfere with the business unit’s ability to quickly react in a tailored way to the specific demands in their market. This diminished responsiveness is in itself an additional corporate cost.

Key Elements

The four types of corporate value creation are the following:

  1. Portfolio Value. When a corporation acts like an investor, using financial engineering to add value to its portfolio of holdings, we speak of portfolio value. The metaphor here is ‘leveraging the family fortune’ – using the corporation’s money to make more money. Three common ways of creating portfolio value are:
    1. Acquisitions/divestments. Buying businesses cheaply and selling them dearly.
    2. Capital reallocation. Shifting cheaper internal capital between business units.
    3. Tax optimization. Shifting tax burdens/advantages between business units.

All these forms of portfolio value creation can be achieved relatively quickly, with little interference in the day-to-day management of the business units.

  1. Reputational Value. Often the fact that a business unit belongs to a particular corporation will bestow it with an air of reliability and/or attractiveness, which could help to win over external stakeholders. The metaphor here is ‘leveraging the family name’ – using the corporation’s reputation to gain competitive advantage. Three common forms are:
    1. Buyer trust. Gaining customers’ confidence and hence a stronger bargaining position.
    2. Partner trust. Gaining more confidence with suppliers, contractors and complementors.
    3. Labor market desirability. Looking more appealing to prospective employees.

All these forms of reputational value require a bit of time for ‘advertising’ but can be realized relatively quickly. Business units only need to avoid damaging the corporate good name.

  1. Management Value. Many business units, as ‘daughter companies’, can benefit by having a good ‘mother’, who can help with guidance, assistance, rules, and sometimes a stern hand. The metaphor here is ‘leveraging the family parents’ – letting the corporate center support and steer the ‘children’ depending on their level of development. This includes:
    1. Management control. Interacting with business unit managers to direct their behavior.
    2. Business unit staffing. Ensuring the right people are in the right positions.
    3. Organizational systems. Installing the most appropriate processes and practices.

All this is also called parenting value or vertical value creation and takes a while to achieve. The extra coordination also limits the ability of the business units to be responsive.

  1. Synergy Value. Many business units, as ‘daughter companies’, can also benefit by having good brothers and sisters, with whom they can share and get stronger. The metaphor here is ‘leveraging the family siblings’ – getting the children to work together as a team to save money or get better. The three most important types of synergies are:
    1. Sharing resources. Copying, reallocating or jointly using tangible and intangible means.
    2. Integrating activities. Carrying out activities together or in coordination.
    3. Aligning positions. Jointly approaching customers, suppliers, or other stakeholders.

All this is also called sibling value or horizontal value creation and can take a long time to grow. The high level of necessary coordination strongly restricts business responsiveness.

34. Organizational System Map

Key Definitions

An organization is a group of people acting together to realize a shared objective. In an organization, the necessary work is divided among the organizational members (division of labor or differentiation) and their activities are aligned to jointly achieve the intended results (coordination of labor or integration). Organizing is about how best to differentiate and integrate activities. This can be called the horizontal organization issue, as it is between people.

Organizing is also about determining who should steer the activities (control) and how much room members should have to determine actions themselves (empowerment). This can be called the vertical organization issue, as it is about who should have power over whom.

Conceptual Model

The Organizational System Map gives an overview of the key characteristics found in every organization. While organization charts are the most popular way to picture organizations, this model suggests that organizations can be better understood by recognizing four main aspects: their particular design (formal organization), the characteristics growing on top of this formal design (informal organization), the people they have on board (organizational members) and their underlying beliefs, values and norms (organizational culture). These are not parts of the organization, found in a specific place, but aspects found throughout. Note that this model is the third building block of the Strategic Alignment Model (Meyer’s Management Model #32).

Key Elements

The four main characteristics of each organization are the following:

  1. Formal Organization. All explicitly agreed upon arrangements made between people about how to work together are part of the formal organization. These include:
    1. Structure. This details how work is split and assigned to specific people (differentiation) and to whom these people report (control). This is commonly summarized in an orgchart.
    2. Processes. These specify how people need to work together to complete multi-stage activities or exchange information (integration). Here RACI models are often used.
    3. Controls. These are the instruments used to steer people’s behavior, such as strategic planning and performance management. See Meyer’s Model #11 on the Control Panel.
  2. Informal Organization. When coordination between people develops organically, but isn’t formally arranged, we speak of the informal aspects of the organization. These include:
    1. Networks. These are all connections established between people that can be used to exchange information, influence decisions, and/or get work done.
    2. Community. Even where people are not personally connected, they can experience a sense of belonging, team spirit and mutual responsibility vis-à-vis each other.
    3. Leadership. While management is one of the controls, specified in the structure, leadership is the ability to influence others. This needs to grow, despite one’s position.
  3. Organizational Members. The people that make up the organization are its members. There are three sub-aspects that need to be considered when looking at them:
    1. The members can be viewed as a collection of individuals, each with their own personality, knowledge, skills, capabilities, and relationships.
    2. The members also need to be viewed collectively to see how diverse and balanced the composition of each part of the organization is.
    3. The members also need to be viewed as more than a bundle of required resources (hands & heads), recognizing their energy and motivation (hearts & minds).
  4. Organizational Culture. Lurking behind the three front disks is the organizational culture. The culture encompasses the shared worldview of the organizational members (their beliefs), the principles they hold dearly (their values) and the unwritten rules of behavior that follow from both (their norms). Culture subtly influences all three other organizational aspects and can only be influenced back via changes to these three.

Key Insights

33. Creativity X-Factor

Key Definitions

Creativity is the ability to generate something original and unusual. It is the capacity that individuals, teams, and organizations can have to come up with new ideas, tools, approaches, designs, products, services, and/or business models. It is the skill to create something novel.

Creativity, like charisma, is often seen as a mysterious quality, that is hard to explain and difficult to purposely develop – either you have the elusive x-factor, or you don’t. The most widely used approach to spurring creativity is brainstorming, in which ideas are generated spontaneously, usually by a group of people, and only evaluated later.

Conceptual Model

The Creativity X-Factor model outlines the key factors contributing to the creativity of a person, team, or organization. With a wink to the notion that creativity is tough to pin down, the model arranges the four conditions that stimulate creative processes into a large X – these are having creative mindspace, a creative mindset, cognitive diversity, and a cognitive challenge. The creative process itself (in the center oval) can make use of four thinking techniques that build on each other to drive creativity. The key message is that creativity is not an enigmatic quality, but a capability that can be consciously developed and maintained.

Key Elements

The four conditions supporting creative processes are the following:

  1. Creative Mindspace. Creativity requires mental effort and therefore people need to be willing to invest time and attention to do so properly. It helps to dedicate a specific block of time for creative thinking and to avoid distractions. Presence of mind is crucial.
  2. Creative Mindset. Creativity also requires an attitude of openness and curiosity. People should have an adventurous and inquisitive state of mind, highly interested in probing the unknown, while avoiding premature judgement. Uninhibitedness of mind is equally crucial.
  3. Cognitive Diversity. Creativity is also aided by using a range of perspectives to look at issues. These different angles can be brought in by different people or by using alternative lenses to view things in distinctive ways. Hence, variety of minds is just as crucial.
  4. Cognitive Challenge. Creativity can also be triggered by mental puzzles. By confronting people with a tricky problem or counterintuitive statement, their certainties can be shaken, stimulating them to think outside their comfort zones. So, spark of mind is crucial as well.

Besides these four supporting conditions, there are also four thinking techniques that build on each other to spur the creative process:

  1. Explore. Coming up with new ideas can be done by employing different types of logic (‘think like a pirate, then like a teacher’). By using different thinking formats in a disciplined way, people will arrive at new insights. This can also be called structured scouting.
  2. Expand. Once new ideas have been generated, it helps to run with them. By taking ideas, building on them, and driving them ever further, people can flesh out an entire new avenue of thinking without restraint. This can also be called radical extrapolation.
  3. Contrast. Once a broad portfolio of ideas has been generated, it can be enriching to compare and sharpen them, highlighting the differences. As in a good debate, the clash of ideas strengthens each further. This can also be called competitive juxtaposition.
  4. Combine. With the key characteristics and strengths of each idea revealed, it is possible to cross-fertilize them, to come up with new combinations that bring together the best of both worlds. This can also be called constructive synthesis.

And after new combinations are shaped, people can continue by exploring even more types of logic, going through the cycle as often is they want or is needed.

Key Insights

32. Strategic Alignment Model

Key Definitions

A strategy is a course of action being taken to achieve a specific purpose. As there are never limitless resources available, strategizing requires the selection of those actions that have the highest chance of success. In other words, setting a strategy is about making choices.

Strategies can be developed for different levels of aggregation – for individuals, teams, units, etcetera, all the way up to entire countries and the world. Business level strategies are made for organizations or units engaged in one specific type of business in one particular type of market. If an organization is involved in two or more businesses, they also need to formulate a corporate level strategy.

Conceptual Model

The Strategic Alignment Model gives a complete overview of the elements that are relevant to determining a business level strategy. These are the key variables that strategists can decide to change to achieve their purpose. Central to the model is the notion that all variables need to be aligned into a coherent whole. In this systems view, changes in one area will need to be translated into adjustments elsewhere to ensure overall alignment. The model consists of three main systems, that each need to be aligned internally and with one another. This entire business level system is inherently dynamic, sometimes driven by the choices strategists make, but often also by autonomous developments.

Key Elements

The three main systems that need to be aligned are the following:

  1. Market System. A market is a place, real or virtual, where supply and demand for specific products and/or services are brought together. A market system is broader, encompassing all actors and influencing factors that have an impact on the seller-buyer interaction. The market system map, incorporated into the left panel of the strategic alignment model, outlines the 11 key categories of actors (described in more depth in Meyer’s Model #31). The strategic choice that needs to be made is which segment of buyers to focus on, as each will come with its own array of rivals, suppliers, complementors, etc. This choice is called market positioning and sometimes summarized as the question “where to play?”.
  2. Business System. A business system is how you make something that buyers will value. It is how resource inputs are effectively and efficiently transformed into attractive outputs – how you work to create added value. As input-output process, each business system consists of three ‘layers’:
    1. Value Proposition. The output of a business system is a product and/or service that will be offered to prospective buyers. This valued product/service is usually wrapped in an envelope of appealing distribution, information, reputation, and payment attributes, making the whole value proposition package extra enticing.
    2. Activity System. To create the value proposition, a wide array of value adding activities need to be undertaken. Next to primary activities such as production, marketing, and sales, these also include support activities such as HR, finance, IT, facility management, R&D, and procurement.
    3. Resource Base. To run the activity system requires extensive inputs. Besides tangible resources such as machines, buildings, money, and materials, it is crucial to have access to intangibles such as relational resources (e.g., reputation and contacts) and competencies (e.g., knowledge and skills).

The strategic choice here is how to configure the entire business system into a coherent whole so that the value proposition will have a competitive advantage vis-à-vis industry rivals and revenues will be significantly higher than the costs of the activities and resources. This choice of business model is also called the question of “how to play?” or “how to win?”.

  1. Organizational System. An organizational system is a group of people working together towards a common goal. These organizational members usually have formally assigned tasks and positions vis-à-vis one another, but informal linkages tend to grow over time, while a shared culture also emerges (as will be described in more depth in Meyer’s Models #34). The strategic choice here is how to keep aligning the organizational system into a coherent whole, so it has the capabilities need to run the business system effectively, or even offer distinctive capabilities to innovate the business. This choice of organizational model is also called the question of “who should play?”.

Key Insights

31. Market System Map

Key Definitions

A market is a place, real or virtual, where supply and demand are brought together. On the demand-side there is a group of potential buyers with a similar desire, while the supply-side consists of a group of potential sellers with a similar proposition. A market system is broader, encompassing all people and organizations who influence the buyer-seller interaction.

These people and organizations are the actors who jointly make up the market system. Their actions and interactions are shaped by a variety of factors, some structural (e.g. cost level, number of actors, cyclicality), others organization-specific (e.g. strategy, culture, resources).

Conceptual Model

The Market System Map outlines the 11 categories of actors who need to be analyzed to understand market dynamics. The 7 categories in dark blue are the market actors potentially involved in the exchange of goods and services, while the 4 categories in light blue are the contextual actors, who indirectly influence the conditions under which the market actors operate. The middle 3 market actors are called the industry column, the left 2 the shadow competitors and the right 2 the potential collaborators. For all 11 categories it is crucial to go beyond mapping the actors, to understand the factors driving their current and future behavior.

Key Elements

The 11 categories of actors shaping each market are the following:

  1. These potential proposition clients are often divided into segments (‘market segments’), depending on such factors as their differing needs, negotiation power, buying behavior, price sensitivity, purchase volume, geographic location, and brand loyalty.
  2. Industry Rivals. These direct competitors can also be divided into specific competitive groups, depending on such factors as cost structure, distinctive competencies, geographic focus, and type of differentiation, with competitive intensity varying between groups.
  3. Suppliers. All providers of tangible and intangible resources fall into this category, including the suppliers of materials, machines, buildings, semi-finished products, money, labor, data, and a variety of services. Each subcategory will be driven by different factors.
  4. Substitutes. If potential clients consider a different category of products or services as a viable alternative, the providers of these substitutes must be seen as indirect competitors. So, movie theaters compete with each other, but also with other forms of entertainment.
  5. New Entrants. Firms threatening market entry are potential competitors. Whether they actually step in typically depends on structural barriers to entry such as economies of scale and patents, but also on organizational factors such as strategy and available resources.
  6. Complementors. When firms offer their value proposition to buyers via, of together with, a collaborating firm, such a partner is called a complementor. Common subcategories of complementors include distributors, platforms, solution providers and consortium partners.
  7. Contractors. When firms outsource some of their value-adding activities to a collaborating firm, such a partner is called a contractor. Almost all activities can be contracted out to third parties, depending on such factors as cost, risk, speed, and flexibility.
  8. Social Actors. These include all actors shaping society such as the arts, sports clubs, religious organizations, charities, support groups, educational institutions, and the media.
  9. Economic Actors. These include all actors shaping the economy such as central banks, employer federations, industry associations, labor organizations and customs authorities.
  10. Political Actors. These include all actors involved in government policy, such as political parties, municipal governments, national ministries, international agencies, and the courts.
  11. Technological Actors. These include all actors shaping new technologies, such as research institutes, standard setting bodies, user organizations and incubators.

Key Insights

30. Team Building Cycle

Key Definitions

Groups of people regularly work together to achieve common goals. Where people collaborate for a short period of time with a specific objective, such a group is called a coalition. When they cooperate more structurally, for a longer period on a shared agenda, they are called a team. In a coalition the individual interests prevail, while in a team the joint interest is dominant.

Team building is the process of strengthening a team’s ability to perform more effectively. This can be a virtuous cycle of becoming more cohesive and productive but can also spiral into a vicious cycle of increasing distance and dysfunctionality.

Conceptual Model

The Team Building Cycle illustrates the process by which four key team characteristics reinforce each other over time, making the team more effective. ‘Above the waterline’ it is visible how team members communicate with each other, which can strengthen how they subsequently act among one another. These tangible processes then influence the team spirit ‘under the surface’, which in turn impacts how each person thinks and feels about the others and the team. This mindset consequently resurfaces as it affects team communication. In each corner of the model five examples are given of building blocks that can contribute to improving each of the four key team characteristics making up the cycle.

Key Elements

The four key team characteristics that can be built up over time are the following:

  1. Team Communication. Having open, clear, and fair communication between team members is crucial to joint effectiveness. All important topics need to be addressable (the what of communication), in a constructive and timely manner (the how of communication), so that the receiver understands what is intended (the who of communication). Improvements can be made, for example, by getting better at listening to each other, engaging in more disciplined dialogue (see model 29), developing a feedback culture, ensuring that uncomfortable issues are talked about and bolstering influencing skills.
  2. Team Processes. Team members also need to work together in an effective and efficient way to achieve their joint objectives. This requires them to assign roles and responsibilities to each individual (division of labor), while at the same time establishing ways to align their efforts on an ongoing basis (coordination of labor). Especially this collaborative behavior is challenging but can be greatly improved by, for instance, running meetings in a better manner, clarifying who is responsible to make which decisions, developing stronger joint problem-solving skills and paying more explicit attention to conflict resolution methods.
  3. Team Spirit. How team members communicate and act will strongly influence the atmosphere and the feelings of attachment to the team. If individuals feel psychologically safe among one another, and valued by their teammates, they will start to bond and feel a sense of citizenship and belonging. This esprit de corps is crucial for getting team members to fight for each other (the joint interest first), instead of against each other (the individual interest first). It can be improved, for example, by building more mutual trust and confidence, while encouraging stronger commitment, sense of community, and reciprocal support.
  4. Team Mindset. How people experience the team spirit will in turn impact how they think and feel about being a member of the team. Where they feel strongly attached to their teammates (personal connection), they will generally be more receptive, respectful, and forgiving to each individual. This can be further improved by fostering openness and appreciation for diversity. Where members also feel strongly connected to the idea of the team (team identification), they will more quickly think from a team perspective. This can be enhanced, for example, by stimulating them to take ownership and prioritize joint goals.

Key Insights

29. Disciplined Dialogue Model

Key Definitions

Managers talk all day – sometimes at other people, but mostly with them. Such conversations can be discussions, with the intention of making a point, or debates, with the intention of winning a point, or dialogues, with the intention of exploring a topic together.

Each conversation has a content and process side. The content side is what is being talked about, while the process side is how the talking takes place. Managers are often so focused on the content that the conversation process unfolds in an accidental manner.

Conceptual Model

The Disciplined Dialogue Model outlines the four steps that each participant in a dialogue should constantly cycle through in a structured way. The premise is that if you want to explore together, you must listen before you speak. Furthermore, to build on each other’s inputs you need to explicitly communicate what your listening has resulted in (called giving a receipt) before you are allowed to add something to the conversation or pose a follow-up question (giving a response). This disciplined procedure facilitates quicker mutual understanding, while by showing respect for the input of the others, also strengthens mutual trust.

Key Elements

The four steps of disciplined dialogue fall into two general categories:

  1. Giving a Receipt. Listening is hard, especially if you think you already know the answer and what the others will say. That is why the discipline of repeating in your own words what your conversation partner has just said is so crucial. It forces you to park your own train of thought and actively listen to what the other means. It also shows empathy and respect, while allowing your partner to spot where you might not have fully understood. There are two steps to listening and after each a receipt can be given where useful:
    1. Reception: Hearing what the other has said. Every interaction starts with opening your ears to receive the other person’s message in an unfiltered way. This is also called listening without judgement. The receipt can be a simple rephrasing of what was expressed: “What I hear you saying is...”.
    2. Recognition: Understanding what the other has said. Once the message has been received, it needs to be decoded to recognize what the other has intended to convey. This is empathetic interpretation. The receipt can be your summary of what you have distilled from the message: “If I understand you correctly you mean…”.
  2. Giving a Response. After listening and giving a receipt, it is time to add to the conversation, but in a way that truly builds on your partners’ input. The discipline is to actively respond, with a follow-up observation or question, instead of continuing your own line of argumentation, more or less ignoring what the other has contributed. The clearer the connection between your partners’ input and your response, the better. Here again you need to take two steps, both of which can be part of your response:
  3. Reasoning: Considering what the other has said. Once you understand what your conversation partner means, you need to process this information and determine what you think about it. Your response can be to share some of the reasoning that has been triggered, almost thinking out loud: “Some of the considerations I have are…”.
  4. Reply: Reacting to what the other has said. Based on the reasoning provoked by your partner, you might draw some conclusions or be left with some questions, that you then want to give back. In this case, your response is to formulate an explicit reply, as a type of relay race baton to pass to the other: “My reaction is that…”.

After moving through all four steps, your dialogue partner(s) should do the same. But even if they don’t, you can still add value to the conversation by sticking to this disciplined process.

Key Insights

28. Strategy Hourglass

Key Definitions

Strategy is the course of action pursued by an organization to realize its mission. To achieve a sensible pattern of action, organizations generally reflect on the situation they are in (strategy analysis) and then determine a plan of action they want to follow (strategy formulation).

Engaging in strategy analysis and formulation can be time and energy consuming, while also slowing down decision-making. Therefore, strategists always need to consider which strategy-making steps are essential and where the strategy process can be more streamlined.

Conceptual Model

The Strategy Hourglass outlines all ten steps that organizations might potentially want to go through to come up with a detailed strategic plan. There are five analysis steps and then passing through the filter of the mission there are five formulation steps. The metaphor of the hourglass is intended to convey the amount of time that will pass if all ten steps are part of the process, with the steps at the very top and bottom taking long, while those near the middle can be done more quickly. The underlying message is to keep the strategy process as lean as possible by focusing on the center and not getting lost in the periphery.

Key Elements

The ten steps of strategy-making are the following:

  1. Strategic Information. The first step is to widely collect information on all developments inside and outside the organization. This information can be readily available from internal and external sources but can also involve doing active research.
  2. Strategic Intelligence. The second step is to interpret this strategic information, to draw conclusions about the situation the organization is in. Strategists will want to understand what should be seen as opportunity or threat, and what as strength or weakness.
  3. Strategic Insight. The third step is to infer how the opportunities, threats, strengths, and weaknesses interact with one another to shape the rules of the competitive game and to weigh what might have the highest impact on success or failure.
  4. Strategic Issues. Once the key success factors are clear, the fourth step is to deduce which challenging topics need to be dealt with, either because they present a danger to success or because they present a route to achieve success.
  5. Strategic Agenda. As not all issues can be addressed at the same time, the fifth step is to prioritize the key issues and to focus the attention of the strategists on formulating a strategic answer to this shortlist of topics.
  6. Strategic Vision. The sixth step is to formulate a big picture answer to the issues on the strategic agenda, within the context of the mission. This rough sketch of a long-term solution will be short in details, but needs to be coherent, attractive, and attainable.
  7. Strategic Guidelines. With a strategic vision determining the overall direction, the seventh step is to formulate some general principles that will guide to organization to get to the vision. These are the main pillars or routes to achieve the vision.
  8. Strategic Framework. The eighth step is to outline the major initiatives that will form the steppingstones along each of the routes to the vision. Together these steppingstones (or building blocks) represent a consistent framework for realizing the vision.
  9. Strategic Roadmap. The ninth step is work out each initiative (or project) into more detail, determining the major activities, general milestones, main responsibilities, and required budgets. This is about broad-stroke planning.
  10. Strategic Blueprint. The final step is to translate each of the strategic roadmaps into comprehensive plans detailing all activities, timings, responsibilities, and resources. Blueprints need to be SMART (specific, measurable, actionable, realistic, and time-bound).

Key Insights