Activating Strategy

A great strategy comes to life when it acts as the context for everyone's decision making. Then it's activated!

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There is a certain rhythm to strategic planning. Whether the leadership hires a consultant, convenes an off-site or does some combination, they spend time talking, thinking, arguing about and choosing a strategy. By strategy, I mean a clear theory about exactly how the enterprise will maintain competitive advantage and achieve its goals.

As leaders, we are deeply connected to the strategic plan we just crafted. We spent days pouring over results, analysis and research. We debated, compared and mulled. Our relationship with that strategy feels holistic and intimate.

But having done that, a new challenge looms. How can we provide our team with that same intimacy?

Spreading the Strategy

We want our strategy to become the context for our employee's choices and behavior. When they face challenging dilemmas, our unique strategic principles should guide their decision making. They need to know the strategy well to use it for their work and calibrate their actions. This is more than simply knowing rules. They need to internalize the strategy. [click to tweet]

I call that kind of strategic alignment Strategy Activation. The strategy is active. It is informing behavior. It is alive and expressed in the moment-by-moment work of the team.

But achieving that is hard. Very hard.

Leaders don't have lots of choices for how to activate strategy. They can hold town halls, send emails and have trainings. Maybe they task managers with helping to share and evangelize the strategy. Of course, then, the managers first need to internalize it.

Whatever they do, it usually amounts to little more than a short-term campaign. In small companies, it may last a month—and in large companies—well, about the same!

Nordstrom

When I think about strategy activation, I often recall case studies published in my early years of consulting.

A common subject was Nordstrom, a department store famous for both its shoe department and extraordinary customer service. One story (that may be apocryphal) was of a Nordstrom location that had previously been a tire store. A customer—not realizing that the store had changed—brought in a tire to return. The Nordstrom employee accepted it and refunded the purchase price. Nordstrom does not sell tires.

In another (well-documented) story, experimenters tried returning:

• A pair of shoes purchased over 5 years earlier

• A pair of shoes carried in a competitor's box

• A pair of shoes exclusive to a competitor

In every case, the customer received a refund or exchange. The store employee needed no manager approval and did not hesitate to help.

Nordstrom has been successful for decades, and their strategy of unfailing customer service is fundamental to that.

How do you imbue such deep understanding of the strategy that your team can autonomously make the right choice when confronted with these dilemmas? At that time, Nordstrom employees received a single card. That was the whole rulebook governing their authority. One side of it welcomed the employee and explained that their number one goal was to provide extraordinary customer service.

On the flip side it said, "Use good judgment in all situations."

They also had myriad practices and rituals that continually reinforced their strategic differentiator. Managers modeled correct behaviors and trained their reports. Senior management rewarded acts of extraordinary customer delight.

Nordstrom had successfully activated their strategy. It was the backdrop for each employee's choices.

The Quantitative Qualitative Gap

We are limited by how little time we can spend evangelizing the strategy and helping employees understand how it applies to them.

So, we use metrics as proxies. Metrics are important. They are the scoreboard. The score tells us whether we are winning the game.

But metrics only measure outcomes—like completed tasks or production. And so, they can only observe results, not intent or rationale.

Fundamentally, metrics observe the quantifiable aspects of the strategy—as they should. But they cannot address qualitative phenomena. That is the difference between decent execution and activation.

Activation is about intimacy, about having a strategy be the frame of reference when it matters. Metrics simply incentivize more or fewer specific activities.

I have written before about how metrics can distort behavior. Call center staff whose productivity is measured by calls per hour regularly drop calls or escalate easy problems to managers. Yes, as an incentive structure, it's inadequate. But most notably, the strategy is absent.

Metrics are necessary, but they are not sufficient. If we want to activate strategy, it takes more than scorecards, OKRs or KPIs.

A Wicked Problem

I have been preoccupied with this for 30 years. It was implicitly the subject of my book. It has consistently been an aim of my strategy consulting, and it is a high priority goal of my coaching work.

Every leader and their team confront this problem as soon as they craft what they believe is a game-changing strategy.

How do we share it? How do we give it life? Will our employees understand how it applies to them in their specific role?

To succeed takes time, commitment, and stamina. It isn't a one and done job.

The month-long "roadshow" that often follows the strategy off-site can't cut it. Six months later, the town hall is a distant memory. The strategy recedes from view and the team faces the practical challenges of their job.

Faced with the choice between equally compelling options, employees will not turn to the strategy to guide their thinking. They will choose pragmatically, based on what serves their metrics, or their convenience.

As with all humans when they need to survive and get to the next task—and they have no higher principle governing their process—self-interest will preside.

To solve this problem, you need to have a strategy activation plan, in addition to metrics. It must be explicit and implicit, practical and theoretical, and customized to every function and role. This is harder than creating a game-changing strategy, and almost as important!

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Beta Testers Needed

I apologize for being so negligent in writing of late. Here’s why.

With the help of AI, I'm building a tool that leverages AI to do this very job—to activate strategy. Until now, there was simply no scalable way to share strategy with the depth and personalization it requires. But LLMs (Large Language Models) have changed that.

At the most basic level, everyone can use tools like Claude Artifacts or NotebookLM to create processes that help significantly. With NotebookLM you can upload strategy documents and allow employees to interact with the LLM, ask questions, debate, and interrogate the strategy. It's a huge advance. I credit my friend Francis Wade with that innovation.

But my product is much more comprehensive. It ingests your strategy and distills it through an in-depth dialogue with you—the strategy owner. Then it crafts individualized learning journeys for every employee, showing them exactly how the strategy applies to their specific role through highly tailored scenarios.

I'm looking for beta testers who will commit to trying the product and giving feedback. In return, I'll promise premium access once it launches.

To qualify, you must be a founder, CEO, business owner, top executive, or strategy consultant who has crafted strategic plans. Ideally with a current strategy you're willing to test (though we have workarounds). All data remains entirely private.

If you're interested or curious, visit contextuum.net for more info. To beta test, sign up for updates and check the relevant box.