I once taught a class on strategic change. The participants were 20 high potential leaders from a global service organisation that you probably know. These people were chosen because of their leadership potential. The organisation believed them to have a high probability of becoming the next C-suite executives of the company. After a two days intensive workshop I asked the participants for feedback. Many comments were positive. A few were negative. I still remember one of the negative comments. One manger said: “Dan, this was a course on strategic change. The part about strategy was OK. But the change part really doesn’t belong at our level. Change management should be the concern of lower level mangers or the HR-department. Top mangers have to focus on the strategy part.” This comment shows a problem that I have experienced in many organisations. Mangers don’t see a strategy process as a change process. Of course my learning was that I could have been better making this clear to the participants. My experience is that this is really hard.
Do top executives really need to care about change management in relation to strategy processes? Shouldn’t top managers just concentrate on crafting the high level strategic plan for the future and leave the details about implementation to the organisation? I think not! My experience from doing strategy work for more than 20 years has taught me that strategy and change are really two sides of the same coin. Strategy always concerns something new. The core part of a strategy is a vision or and idea of a better company. It could be about better performance, better service, a better place to work or many other things that basically concern an improvement of the present status quo. If a strategy doesn’t have anything new to it I wouldn’t really call it a strategy. So what a strategy basically does is to ask people to do new things. If a strategy is formulated and nothing new happens it is worthless. And the effort is wasted. Asking people in an organisation to do new things is all about change. If I would ask you to do new things I would certainly think about how the content of the message (the strategy) would affect you. Both the content of the strategy (often in the form of a document) and how it is created (the crafting process) will affect how much and what kind of change the strategy will generate. In my opinion it is not possible to separate strategy formulation from change. It is up to you as the strategist to use this connection to your advantage or not.
Why is it so hard for executives to see the link between strategy and change? One key reason is the way this subject is treated in business schools. When you go through your training at a business school the areas of strategy and change are treated separately. The basic focus of the strategy part is typically about analysing the business to discover opportunities for competitive advantage and to create a plan to exploit these opportunities to the benefit of the company. The strategic plan shows how you want to “outsmart” the competition and improve profits. The basic premise is that systematic analysis will lead to better decisions, which in turn will lead to higher profit. It is not until after you have prepared your strategic plan that you turn your attention to the change part. In business school you go to a change management class. The purpose is to learn how to turn your strategic plan into action. The subjects will typically be about the psychological aspects of change, how change affects people and various tools to make change happen in organisations. These are all important subjects. And the teachers will tell you that strategy should be followed by implementation (change). So there should be a link. The problem is that you will not learn for instance how a strategic analysis will generate (positive or negative) change depending on how it is carried out. When you analyse a business you generate expectations and create change in the company depending on how you communicate and whom you involve. In the same way the content and layout of a strategic plan will generate positive or negative change. It is not enough to come up with an ingenious plan to beat the competition if it is so long and complicated that no one will understand it. The end result will be frustration and you could harm the business instead of creating competitive advantage.
My point here is that strategy formulation is a change process. Change is not just something to think about after the grand plan is ready. A central part of your strategic competence is to realise this and build positive change into your strategy process right from the point when you start planning strategic activities.