Every now and then you need to wake up and smell your real world strategy. Strategic reality is about events, and coping, and figuring things out. Real world strategy is a living thing. Overconfidence in strategic planning has led to financial crisis, botched and illegal wars, and missed opportunities in business, politics, sports, and life. It has led to quarter of a million missing school places in the UK and over half of Spain’s youth being without work. Failed businesses from Lehman brothers to Blockbusters to Borders all had strategic plans. They all had charts and spread-sheets.
Give me time to think. In 2009 a Toyota vehicle hurtled down a highway with no brakes and a stuck accelerator and crashed into another car killing four members of the same family. In September 2009, Toyota recalled of 3.8 million vehicles but blamed a removable floor mat instead of the real cause and ignored reports of similar fatal crashes dating back to 2007. Not until February 2010 was there a full recall of 8.5 million vehicles, new parts to fix accelerator and brake problems and a public apology from the president along with a ceremonial bow criticized for being too little, too late.
Toyota is a remarkable organization. Its famed Toyota Production System (TPS) – a careful combination of process and collaborative culture – led them to the top for quality and satisfaction. Toyota’s 100 year plan had weekly strategic meetings after high level of consensus was gained from the core of Japanese managers with life-time contracts. If real world strategic failure can harm them it can harm you.
The real world is global, not local. Toyota’s strategic process involved consensus in Japan not consensus worldwide. It favoured head office ahead of the rest of the world. Senior managers forgot the Japanese principle of gemba – going to the place to understand the problem – or perhaps thought only applied to engineering.
The real world is about little things not just big things. TPS does produce quality inside but found it hard to notice important events outside that seemed less important – less urgent – less deserving of senior management attention. They were busy too looking at the big picture at a distance to see the detail that could trip them up.
The real world is about events in real time Leaders who hide away like monarchs of old – as with the ex-CEO of RBS who threatened to fire people for putting cheap pink wafers in his meeting room – are confused by events because they minimise, attack and deny reality. Smart leaders know events matter more to real strategy than fantasy strategy.
The future is not just more of the past The future is not a simple extrapolation of the successful past. Growth will not always be growth. Quality will not always be quality. Particularly if circumstances change – which they will – and if assumptions are not complete – which they never are. Action takes place in the real world so strategy needs to take place in the real world. You need open door strategy, real time strategy, with real people doing real things. Smart leaders consider little things, local things, and react to real world events to successfully shape the future.