How clear is the direction you have for the organization, for where you’re going? Do you have clear direction for your team? Research by Gallup over the last 30 years with 10 million managers shows that only 22% of employees think that their leadership team has set clear direction for the business. This concerning piece of information underscores the dire need to reeducate business leaders in being strategic. Key to this is the concept of strategic fitness, which today’s guest discusses. Rich Horwath is a pioneer in the landscape of strategic thinking, guiding a quarter of a million leaders worldwide with a keen eye on setting direction and creating competitive advantage. Rich transforms the complex into actionable strategies for leaders. Tune in to learn more about strategic fitness!

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Rich Horwath – Strategic Fitness – A People Centric Approach

We’re a show that guides leaders on how to elevate the workforce, and we believe that people are at the heart of successful organizations. Team members’ well-being, reward, and career development are all essential to a happy and healthy workforce environment. This show discusses the practical and effective leadership strategies that top executives, professionals, and talent managers all enjoy. First of all, I’d like to introduce you to my panel.

Char is a Strategic Human Resource Consultant who helps coach leaders and so forth on living life and ensuring that they’re balancing a work-life style. We’re happy to have Char here. Our core guest in this episode is Rich Horwath. The discussion is going to pivot on the art of steering leadership into uncharted territories with strategic mastery. Rich is a dynamic leader and CEO of the Strategic Thinking Institute.

Rich is not just a bestselling author and an acclaimed facilitator, he’s a pioneer in the landscape of strategic thinking, guiding 250,000 leaders worldwide with a keen eye on setting direction and creating competitive advantage. Rich transforms the complex into actionable strategies for leaders. It’s great to have somebody on your side that can deliver that sense of clarity.

Rich has been on a lot of prestigious business publications, such as Fast Company and Forbes, Harvard Business Review, and so forth. Also frequenting on television as well, ABC, CBS, Fox TV. As you can see, we’re fortunate to have Rich with us in this episode. I’m super excited to have this conversation specifically around strategic fitness and his new book, Strategic. Welcome, Rich.

Sam, Char, it’s great to be with you both in this episode. Thanks for having me.

As we kick off, I know that you have your book, Strategic, but you also have a whole core of other books that you’ve launched over the years. Can you start off by just telling us a little bit about yourself, your story? How did you get into this business of being a knowledge expert in this area and leading people to perform better in their work?

Thanks, Sam. Roughly 25 years ago, and I know I’m dating myself now, I was working at a marketing firm developing strategic plans for healthcare companies. We were facilitating a strategic planning session. At one of the coffee breaks, one of the managers came up to me and said, “Rich, I just had my performance review and my manager said I’m way too tactical. I need to be more strategic. How do I do that?”

Going back 25 years ago, most of the books on strategy were around corporate strategy, business unit strategy at that company level. It was that light bulb moment for me that said, ” There isn’t a roadmap to help the individual leaders and managers be strategic day in and day out.” That ignited my passion for the topic of thinking and planning strategically. I did a lot of research.

I worked for five years as a graduate school professor, did a lot of research, and then started writing and writing my first book. About two years later, I launched my own company. My passion is helping individual leaders and executive teams think, plan, and act strategically, not once a year during the strategic planning process but every day.

Throughout that journey, just the word strategic itself is a buzzword. When you talk about strategic and how that applies to leadership or leaders now, how do you define that?

Strategic: The Buzzword And Beyond

Sam, it’s an important question because research has shown over the last 10 years, there’s 91 different definitions of strategy and strategic. Generally, we don’t have a consensus on what that means. If you look in the dictionary for strategic, it says of or relating to strategy, which is about as helpful as an umbrella in a hurricane. When I think about strategic, I think about it as possessing insight that leads to advantage. If we think about it in that capacity, we can say some things are strategic, like a person or a plan. Both of those can possess insight that helps us create an advantage.

There are lots of other things, and you bring up a great point, Sam. We throw the word strategic in front of lots of other terms, and it dilutes the meaning and importance of the term strategic. If we think about possessing insight that leads to advantage, that’s what we’re talking about with the word strategic. We think about an insight. It’s a learning that leads to new value. When we’re talking about strategic, it means we’re continuously generating learnings that are giving us the ability to create value for the people we serve, internally and externally.

It seems that, of course, there needs to be a plan around being strategic, but it first starts with having the appropriate mindset for leaders. Would you agree?

Yeah, the mindset is absolutely critical because the reality is we live in a very action-oriented world now, where everybody’s on this activity treadmill. We’re running and running, going and going. We’ve got emails, texts, and things flying around, and oftentimes, we’re often acting like a bumper car at a carnival, bouncing from one thing to the next with no rhyme or reason. To your point, the mindset shift is important, Sam. We’ve got to be able to step back out of the day-to-day and think about three things. What are we doing? Why are we doing it? How could we do it differently or better than we are now?

We've got to be able to step back out of the day-to-day and think about three things. What are we doing? Why are we doing it? How could we do it differently or better than we are now? Click To Tweet

Char, I know that you work with a lot of leaders and mindsets, and making sure that they have that work-life balance is quite important. How does this resonate with your thinking?

I don’t want to date myself here, Rich, but I remember being a junior HR manager and being transferred to an HR business partner, which was a lateral transition. I know that doesn’t sound like it is, but what’s interesting is that my vice president was telling me, “Char, you need to be more strategic.” She was a female, but that’s how she talked to me. You need to be more strategic. I remember going, “Okay.” I’m 29 years old and I’m thinking, “I’ll be strategic.”

I was new in my career and as an HR business partner, we’re very much expected to work with leaders to, as you say, transition the mindset. However, I’m later learning as I’ve gotten through my career that competencies are very much essential and you have, like you say, a tactical competency or a strategic competency and you have to work on that muscle. It’s a skillset. I’m very creative. I’m very much a visionary, so I embraced that.

The challenge is having that conversation because I felt like sitting down with my leaders, vice presidents, and executives. I’m trying to figure out what all the strategic is and how that applies to our business, which is in turn, I need to have a more business mindset, an operational mindset. For an HR leader, we’re “people” people. It’s not necessarily always ingrained in our mindset or psyche because we get fooled in thinking we are in the people business. We’re more operational than you think. How would you take, going back to my maybe last seasoned mindset and coach and mentor, someone that needs to build that competency and what would be your approach and how to help that person be more strategic in operations?

Yeah, that’s a great point, Char. I love the backstory that you shared there, too. It’s so relevant for a lot of us. I think the first thing as a leader out there when we’re going to look at our people and think about are they tactical or strategic, we need to be more specific. I’m a big fan and a big believer. I know a lot of your work, too, focuses on changing people’s behaviors. When we’re going to give people feedback around their strategic, operational tactical ability, we need to be more specific and related to behavior. It’s one thing for me to say or for you to say, “Rich, you’re too you’re too tactical. You need to be more strategic.”

However, if you would share with me, “Rich, I see you’re reacting to the clients internally and you’re not proactively sitting down with them to talk about what their goals and needs are. I want you to be less reactive and I want you to be more intentional in setting a regular cadence meeting with those internal stakeholders, your business partners, so that you can be on the front of the curve and be more proactive with them so that we’re not in an order taking mentality, which a lot of times we find ourselves in if we’re in an internal function like HR, IT operations, finance.” The main thing I’d mentioned to folks is be specific on what behaviors you want to see from them operationally, strategically, tactically and that will give them a much better, much clearer roadmap to being a better performer.

That is super relevant to a lot of people now, and I’d like to dive into that just a little bit more before we talk about strategic fitness is earning a seat at the table as a strategic leader. A lot of people, we have, of course, leaders or founders of organizations and C-suites. We also have senior HR practitioners who are trying to be more strategic in their position, but they need to earn that seat at the table. In organizations that typically think of human resources or people operations as a tactical function, how can those professionals elevate their gain to win a place at the table there to be more influential? What are your thoughts, Rich?

I would focus on three A’s for people, and I use this three A framework to be strategic. If you’re an HR leader or a founder of a company, we want to be thinking about three A’s, acumen, allocation, and action. Acumen is what’s the new insight, what’s the new value in this situation? Whether you’re meeting with your staff, doing a one-on-one meeting, or meeting with an external customer, you will always want to ask yourself after every interaction, “What’s the new value here that I can provide, deliver or create?”

 

Too often, if we’re reactive, we’re not thinking about new value. We’re thinking about fulfilling old needs. We want to think about proactively, “What did I learn in that conversation that can help me be more proactive in creating value?” The second A then is allocation. A lot of times, if you’re an internal leader, we’re spreading ourselves way too thin. We’re trying to be a team player, and so we don’t say no to anyone. Everything’s a priority.

If everything’s a priority, then we’re going to spread ourselves so thin that we’re not adding value. One of the dirty secrets of being strategic, especially for your internal leaders, HR, IT, and finance operations, is you have to be able to say no to some requests. Now, here’s the other trick, though. I don’t recommend saying no to people because no one likes to hear the word no, especially internally. Politically, that could be a problem for us. What I would suggest is to think about what are the trade-offs that you would have to make in order to fulfill that request.

If you get someone comes to you and says, “I need you to create an emotional intelligence workshop at our national sales meeting in two weeks,” that’s two weeks to do a new workshop. Instead of saying, “No, we can’t do that,” the internal leader for marketing or sales walks away and says, “He’s not a team player.” We can say, “Yes, we can do that. Here’s what I need to stop doing. I’m going to have to stop working on these items. I’m going to need X amount of resources from you. I’m going to need this amount of time on your calendar. I’m going to need to meet with these five people.”

You want to identify what are all of the trade-offs that you’re making and they’re making in order to fulfill this request. A lot of times, then that will get people to reset and understand that the request is either too time-conscious or it’s something that was going to require too many resources and they’ll maybe pull back the request. We’ve got to be able to focus as an internal leader and say no and do so by saying yes and then giving them the trade-offs.

The third piece of the third A is action. We need to think about what’s my priority. A lot of the leaders I work with say they’re frustrated because the senior management team, whether it’s the CHRO or the CEO, COO have too many priorities. We’re not being effective in any couple of areas. We want to think about those three A’s. Acumen, what’s the new value I can provide based on this interaction? Allocation, what are the trade-offs I need to make? Action, what is my priority going to be? I think if we keep those three A’s in mind, it gives us a way to trigger that ability to be more strategic from a mindset and behavior standpoint.

Why didn’t I not meet you, Rich, years ago? As I was also a leader who kept building on top of all these things, I ended up being in charge of the learning and development department on top of my other roles. One of the things that was the charges is to build business acumen in the business. I was asked, “How do we build business acumen in this large healthcare system for that particular region?”

The idea was, let’s just bring in all these executives to talk about what marketing is. What is operations? Trying to do these talking events. I see that in your books here. I haven’t read them. I have to admit that. You talk about what it entails for a leader and I do recall, because I was a strategic talent management person for the company, and I was told to get the business acumen up, but I was unable to articulate exactly what is acumen, what is action, what’s the second one.

I was unable to have the wording or even just my own business acumen to be a credible activist of an HR professional to speak the language in order to translate in the learning development space. I reflect back. Had I had your books and maybe your mindsets here, I could have probably resonated differently. Reflecting on my backstory, how could I have done that differently in an operational sense of learning and development to help my leaders build that strategic competency?

The first thing, Char, that’s a great point because I think a lot of us are challenged with that ability to bring it all together and do it concisely. I think the first thing is we have to have a common language for strategy. As I mentioned earlier, 91 different definitions. People in marketing, sales, finance, and HR, all have different ideas. We have to get on that proverbial same page as to what strategy is. If we think about mindset, we think about being strategic. Everything is going to manifest itself hopefully in a plan.

HR is going to have a plan. The founding CEO is going to have a plan. We’re all going to have a plan, but the thing we have to come back to is that a good plan will always answer just two questions. What are we trying to achieve and how are we going to do it? To me, that’s where we all need to start because one of the issues I see oftentimes is that people in companies, even smaller companies, are operating in silos.

They’re not talking to each other. They’re not aligned on strategies. At the end of the year, there’s a lot of disconnects. There’s a lot of miscommunication and missed opportunities. One of the things I’d recommend is for anyone, get your leaders in a room at different levels and talk about what strategy is. Let’s get a common framework a common definition. To answer those two questions of a plan, I like to use the oldest framework known to man, which is the GOST framework, goals, objectives, strategies, tactics.

This goes all the way back 2,500 years ago to Sun Tzu, the Chinese general philosopher because strategy started in the military arena. Use that GOST framework as one place to start. Goals and objectives answer the what question, what are you trying to achieve? Strategy and tactics answer that how question, how are you going to achieve it? I would start by getting people in a room, giving them a white paper that clearly outlines the definitions, having them practice writing those things down, and then having them talk to each other about my goals, objectives, and strategies. You’re going to start to build that alignment.

Strategic Fitness

Those are some great tools. I have to say one thing, Rich, is when most of our readers out there after reading your expertise, people often take action. They binge on it and say, “Let’s do this.” They often lose momentum akin to a New Year’s resolution. When you get ready, it’s like, “We’re going to do this.” It falls off, which comes into the thought of strategic fitness. How can our leaders out there ensure that they have the rigor to practice that strategic mindset on a daily basis? What do we need to do there?

Sam, it’s a great point. There’s one universal truth. If we do anything once a year, whether it’s golf, the guitar, we talked about pickleball earlier, if you do any of those things once a year, you are not going to be very good at it. The same can be said for strategy. If we only do strategy once a year during the planning process for a week or two and then it goes away for eleven and a half weeks, we’re not going to be strategic. To your point of strategic fitness, the idea has its corollary with physical fitness.

The average CEO exercises for 45 minutes a day. She spends 45 minutes a day exercising physically. We have to ask ourselves how much time we are spending investing in being strategic and practicing, as Char talked about earlier, building that muscle, practicing that skill set. One of the things we need to challenge ourselves with is, 1) What does being strategic look like in our world? If I’m a CHRO, what does that look like?

It means I’m going to be meeting intentionally and regularly with my internal business partners to talk about what their strategies are. What do their strategies look like? Where does our team fit into the designing strategy? Also, if I’m a CHRO, I want to set our own strategy. Too often, I see internal leaders abdicating their responsibility for strategy by saying, “That’s the CEO’s job or that’s the brand team’s job to come up with the strategy. We just support them.” That’s not true.

The mindset is everyone in your organization is a strategist because strategy is the allocation of resources, time, talent, and budget to achieve your goals. Every person in your organization has time, talent and maybe a budget. How they use that time and talent every day is going to be your real strategy. If I’m a salesperson and I’m out there every day selling at low prices, that’s my company’s strategy.

The mindset is everyone in your organization is a strategist because strategy is the allocation of resources, time, talent, and budget to achieve your goals. Click To Tweet

Even if our marketing team says we’re the premium brand in the industry and we’re the highest price, we have to understand that the main thing we need to consider is what our focus is. That has to come from alignment. For instance, it’s deciding as a CHRO what are the internal stakeholder strategies? What are the strategies our team is developing? Let’s all have those conversations so that we’re all on the same page and we’re all developing a plan that fits together.

Rich, this is resonating with me because I think one of our next questions is about how to assess our leaders’ current level of strategic fitness and how we focus on what to improve upon. I think you gave me a real a-ha, because, on a personal level, I did do a meme only about two weeks ago and it’s a silhouette of me. I said, “I am fit because my fat cells are strong.” I create memes.

I know I’m a little hokey, but then I was thinking of my little meme because my fat cells are strong. Maybe I’m exercising the wrong part of my body. Maybe I need to be strengthening more. Back to my original story when I didn’t know how to get business acumen up and going, I love your concept about understanding what strategic is.

Let’s understand our level of strategic abilities and competencies. Let’s understand what we need to improve on and quit focusing on the fat cells and focus on the muscles that truly grow our business. I’m sorry, I always have a story, but I resonate with that. Our ways of assessing the fitness aspect of our leaders, how do you assess that competency? We had competency assessment surveys, so I’m curious what your thoughts are on that.

I’m a big believer that it needs to be both qualitative and quantitative. When it comes to quantitative, I developed an assessment called the Strategic Quotient, SQ. We’ve all heard of IQ. We’ve all heard of EQ for emotional intelligence. The SQ is your strategic quotient. The strategic quotient is built on those three A’s that I mentioned earlier, the acumen, allocation, and action. It’s 80 statements that people go through, and it gives them a score.

So far, we’ve had about 3,000 leaders take it and the average score is about 60 in the 60th percentile. Back to your point earlier, Char, the acumen piece is typically the lowest score on average across the groups. I think, to your point, a lot of people don’t understand that acumen is simply learnings that lead to new value. A lot of the organizations I work with, especially in the technology sector, are creating accountability for insights.

They’re trying to create a true learning organization by saying, “We want leaders at every level each month to submit three insights, so learnings that they use to create value either for their internal colleagues or for external customers.” They share that on an intranet. Each month, they’re looking at literally hundreds of different ideas that have created value. Now, instead of being in silos and having great ideas here and great ideas here and great ideas here, they’re starting to see those ideas and insights.

Back to your original point, the strategic quotient is a simple way to assess your current level. As you both know, Sam and Char, just because somebody’s title is VP and somebody else’s title is independent contributor doesn’t necessarily always correlate with their strategic ability. We want to do that quantitative assessment. I’m also a big fan of doing a qualitative assessment. Giving people a survey, asking them about their business, trends and patterns in the market, their most dangerous competitor, and how their customers actions and thinking are changing will give us a window into how holistically they’re thinking as well.

Our readers out there are thinking right now, Rich, how do I get my hands on this questionnaire to take the strategic quotient? What do they need to do there?

There’s a free version, a sample version on the website StrategySkills.com. Go there, take it. The sample version is free to take and it’ll give you your results immediately. There’s one for your team as well so you can see, “Is our team being strategic?” A lot of folks that are leading organizations out there, you can get an idea, “Is my senior leadership team being strategic now?” That would be a great start. If you want to take the full strategic quotient, that’s available there as well.

Strategic Quotient Insights

What are some of the most interesting findings that you’ve had out of people taking that strategic quotient?

I would say that the big finding is 1) People are saying that they’re risk averse, so they don’t want to take risk. We’re also seeing in the data that they’re saying their company leadership wants them to be innovative. One of the big disconnects the data shows is that our company leaders want us to be innovative, but then the culture is risk-averse. If you do something and it fails, you get put on that list that, “I’m not sure that they’re the right person for that role or that job.”

 

As a leader out there, you need to be cognizant of, “Is our culture matching up with our strategy?” Culture and strategy are both very critical to have. You can’t have one without the other. You’ve got to have both solid. If innovation is one of your key values, as it is for many companies, you have to ask yourself, “Is our culture supporting that? Do we reward people for trying things and failing?” We’ve got to understand, does our culture support the strategy and vice versa?

Culture and strategy are both very critical to have. You can't have one without the other. Click To Tweet

Good thing. It’s good to have the enablement. The company has to enable the strategy to happen, of course, and I understand that. It sounds like the strategic quotient is a way that people and professionals can assess their baseline of how their strategic thinking is now and then perhaps they can grow upon that over time. Are there certain routines or exercises you give leaders to build their strategic fitness to ensure they’re on that path to being more influential?

Yeah, that’s a key point, Sam. I’m a big believer that there’s been a lot of work on habits in the last few years, atomic habits, the power of habits. I think people understand that habits are important. A habit is not built on doing something once a year. To your point, I’m a big believer that we have to practice. Professional athletes typically spend 90% of their time practicing and 10% competing. In business, it’s reversed.

Many people are spending 100% of their time working in the business and 0% practicing, to your point, the skills that are foundational to their success. One of the things I’d recommend for leaders, and I do with leaders is say, “Let’s identify the 2 or 3 behaviors and skills that are most important in your job, and then let’s create a practice routine for those behaviors and skills.” Once a week, you’re going to spend 15 or 20 minutes practicing that skill set.

For a lot of people, that seems maybe strange that I’m going to spend 15- or 20-minutes practicing asking questions or listening or facilitating a meeting. But the reality is that’s how we get better. To your point, I developed a Strategic Fitness System, an online platform with 50 different workouts that leaders can practice in different areas. That’s a more substantial way to do it. A simple way to do it is to figure out the 2 or 3 behaviors or skills that are most important in my role, and then what are ways I can practice them. I think anybody out there who has been a musician in the past who grew up playing the piano or the violin. If you were an athlete in high school or college, you know practice is key. In business, it should be just as important.

Here’s where my mind is going on that because how you know you go into a gym? Here’s my New Year’s Resolution, or here’s my resolution. I’m going to lose fifteen pounds, and I’m going to get some muscle tone. I start going into the gym, work out, and see nothing happening. I don’t see any results. All of a sudden, maybe a month or two later, I start to see results.

It does become a disciplined process of making those habits part of our routine and helping our leaders and our employees have faith that if we do these habits consistently and we improve and we keep working this strategic fitness and work on it, we will ultimately see income. However, I do see sometimes we get impatient with those results, and I think we think it’s going to happen overnight. I’m also wondering, what do you think about some of the common strategic mistakes that we make in business when it comes to this? What do you see as more of the strategic blunders and what you’ve observed in your coaching experience, Rich?

Yeah, great question. Just to build on that, one of the key things I see is because, like you said, it takes time to build those skill sets and muscle. I’m a big believer in creating a mini-talent scorecard. If you’re a CHRO, an HR leader, a CEO, and a COO, create a mini talent scorecard for your people, but do it in conjunction with them. Sit down and say, “You know, Char, here are the three skills that are important behaviorally that are going to drive success for you strategically.”

Let’s say one is going to be setting direction for your team. That might be one that we say, “Char, we’re going to create a scorecard on that.” Now, what I’m going to do as the leader is each week, I’m going to sit down and I’m going to, we’re going to have a conversation. You’re going to grade yourself from 0 to 3 on setting strategic direction that week or that month. You’re going to say, “I gave myself a one this month.”

Let’s say, 0, Underperforming, 1, Average performing, 2, A little above average, and 3, Killing it. You’re going to say, “This week, I did a one and I did a one because we didn’t take time at the staff meeting to talk about strategy. It was all fire drills.” One of the ways you can start to gauge it is what you’re seeing weekly or monthly. I’m a big believer, share a mini talent scorecard, pick 2 or 3 things. It might be leadership skills. It might be executive presence could be a 1, 2, and then have the person grade themselves on a scale of 0 to 3, sit down with them, and talk about what they did and didn’t do. I’m a big believer that starts to transform that impatience into, “I’m starting to see some progress.”

When they have those discussions with perhaps their supervisor or their colleagues, they can start to see some traction on and some success. I think it also brings awareness up with their colleagues that they’re being more strategic in getting that traction. Now, one thing I just wanted to jump back to, Rich, is Char’s question around some of the mistakes that you see happen in this process. First of all, is there a common weakness that a lot of leaders have that they try to work on? 2) What are the biggest mistakes that they have to try and resolving that issue?

The biggest issue I see in general, is leaders saying, “Here’s my strategy.” They don’t have a strategy. It’s not technically a strategy. One big issue is that folks will say, “We want to be number one in the market, or we want to be the best place to work in the country.” They say that’s our strategy, but that’s not a strategy. That’s answering the second question.

The first question is, what are we trying to achieve? How are we going to do it? The first thing is, do we have a real strategy? Secondly, to your point, a lot of mistakes come from not writing the strategy down. Just because it’s in your head doesn’t mean that everybody has the same understanding. We all grew up with that telephone game where one person starts with this comment, and it goes to this person, this person.

 

By the time you get over here, the comment is completely different because we’re translating different things to different people. If you’re a leader out there, you’ve got to write your strategy down, and you’ve got to have your plan in writing. It’s not good enough to have it in your head, no matter what size company you’re in. If a coach for a Pee Wee football team can spend 6 or 7 hours a week creating a game plan, you can spend an hour writing down your plan.

You’ve got to be able to write down your plan. The other big mistake I see leaders making is not including their team in the conversation as to why the strategy is what it is. The research in the social sciences shows that if you ask somebody to do something and give them no reason, compliance is about 60%. If you ask somebody to do something and give them a reason, then it’s 93%.

The reality is even when people don’t agree with you if you give them the why, they’re going to be much more likely to execute the strategy. As leaders, we need to remember we can’t be so busy that we forget to have conversations around strategy as well. Oftentimes the people that work for you, even the frontline people, they’re going to have a lot of great insights that you, as the CEO or CHRO, don’t have because you’re not on the front lines with the customers day in and day out. Just because you’re the leader, don’t think you’ve got to lock yourself in an office and create the strategy. It should evolve from conversations and be more organic versus a command-and-control approach.

Just because you're the leader, don't think you've got to lock yourself in an office and create the strategy. It should evolve from conversations and be more organic versus a command-and-control approach. Click To Tweet

The Strategy Scaffold

This is fascinating because I definitely want to talk about the turnaround aspect. I do think strategy and business is very vital. I did in healthcare typically, which is a lot of my experience, we’d have the CEO C-suite, as we called it, that would turn over every five years very commonly. As the learning and development person, HR business partner, I had to facilitate strategic courses for our leaders and literally talk to my leaders about strategy and aligning our goals and aligning the system, the region, the hospital, all the leader, the employee all the way through the teams.

I had a real difficult time helping the leaders translate how a strategy aligns with a specific employee goal. This would have been a real, “A-ha.” However, then let’s go to the next five years and we had a different CEO come into place. What was fascinating about the CEO’s approach is he took the strategic alignment, the graph, which was beautifully done. He put it on every single wall, cafeteria, and break room because he did not notify the blind spot, which is part of our discussion here to realize that we don’t even know what the strategy is. We don’t talk about it. We don’t have a language about it.

Leaders can’t even communicate it. We, as the enterprise, need to show our employees what the strategy is. I thought that was genius. Believe it or not, we switched from one of the bottom hospitals out of 22 to becoming one of the best hospitals in two years. We hit almost all 11 out of 13 initiatives strategically. I thought that made a difference. That’s a success. I talked about my beautiful strategy concept poster. What plans do you think that our leaders would hit the mark as far as understanding what their strategy is and what physical tools or meetings or discussions? How do you have the leader understand that and comprehend it like my example there?

That’s a great example. Kudos to you all for moving from 22 up to the top 2 or 3. That’s exciting and that does not happen a lot. It’s great to see that. Like you said, you’ve got to be able to put the strategy out there. One simple framework I use and think is helpful to visualize because I’m a big believer, Char, like you, that it’s great to visualize is called the strategy scaffold. We think about a scaffold for a building.

It’s basically used to put up against the building to help support it and to provide some structure to it. In my strategy scaffold, I have three planks, so the number one plank is purpose. Purpose comes in the form of mission, vision, and values. As a good leader, we have to have that because that’s going to be the foundation of our culture. The first plank is purpose, mission, vision, and values. Be very clear and especially, make sure that your mission and vision and values are unique to you.

If you can put a competitor’s name on your mission, vision, and values and it would fit, then that doesn’t work. You’re not being unique enough with those statements. That’s plank one, purpose. Plank two is the business model. A business model can be complex, but I break it down simply into three things. It’s how you create, how you deliver, and how you capture value. The business model can be done by any group in the organization.

It’s simply asking yourself, “What do we do to create value for our stakeholders? How are we delivering value to our stakeholders? How are we capturing that value?” That’s the second plank is that business model. The third plank is your plan. Plan goes back to what we mentioned earlier with the GOST framework, answering those two questions. What are we trying to achieve and how are we going to do it?

The goals, objectives, strategies, and tactics should be done at the CEO level. Everybody in the C-suite should have their own GOST framework. The people below them should have their plans as well because it should be a beautiful cascade from one level to the next where everybody’s working towards the same ends, but they’re going to have different ways to get there. That’s the strategy scaffold purpose, a business model, and a plan. That’s a simple way potentially to think about bringing all those elements together.

Just a point of clarification there, Rich, can we talk about how the element of capturing value, can you explain what that means a little bit more?

It’s a good point, Sam. One of the things I see, especially with internal groups like IT, finance, and HR, is that they’re doing activities because, historically, they’ve done them. What they don’t stop to do occasionally is ask ourselves, “Are all of the things that we’re doing, the reports that we’re producing, the meetings that we’re having, are those all still generating value for the people that we interact with?” Oftentimes when we do an audit, the answer is no.

A lot of those activities, the reports, they’re not adding value anymore. The capture value piece, especially for an internal person, is we delivering value? Are we capturing that in the sense that we are changing things so that the people we’re working with perceive the value we’re producing? Oftentimes internally, if we’re not good at communicating our value, then people take for granted what we do.

HR leaders, finance leaders, and ops leaders out there, they know this. If you’re not able to communicate the value that your team’s bringing, then oftentimes the other business leaders will say, “I’m not sure. Maybe we should outsource that group. Maybe they’re not bringing as much value.” The capture value is really, are you capturing value in the sense that you’re identifying what the value is, and then you’re communicating that back to your stakeholders? That’s the key piece.

When you think about external groups like marketing and sales, or if you’re the CEO, if you’re a product manufacturer, let’s say you sell stuff, but these days, you need to ask yourself, “Can we capture value in other ways? Should we start a subscription like Volvo, the car maker?” Instead of just selling cars, now they have a subscription where you don’t have to buy a Volvo. You can subscribe to a Volvo, one fee each month, and you can quit that subscription anytime you want. When it comes to capturing value, it’s both internal and external.

I want to dive into that very important piece that you just mentioned. Capturing value is important, but ensuring that we’re communicating that it is can be even more important. Let me just back this up. There are a lot of times when those that you’re delivering value to don’t understand or don’t realize how much they rely on you, how much they’re getting out of that value. What is the best way for leaders and practitioners to communicate the value that they’re delivering in a way that people understand it, appreciate it, and want more of it?

The first step goes back to the idea that we’re not order-takers. We have to first have a proactive, intentional conversation with our internal stakeholders on what are your goals and needs? Not what do you want, I want this emotional intelligence workshop, national sales meeting. That’s fine. What are your real goals and needs for your team? It might be around development or right around culture. It might be around business acumen.

What are the real things you want to see from a mindset, behavior, and business performance standpoint? Once we know that, and we’ve got alignment on the 3 to 5 goals, needs, and behaviors that they want to see, now then we can go back as an HR team and create a program to deliver on those things. Now, if we’ve delivered on those things to your point, Sam, we’re going to go back and say, “You told us here were your three goals at the beginning of the year, and then here are the initiatives that we’ve developed. Here is both quantitative and qualitative data.”

Maybe we can interview some of the people that we worked with internally on business acumen. They say, “Char created the best business acumen course because now I can go out. I better understand. I’m more of a consultative seller.” I’ve got some qualitative feedback. Now, I’m going to look at quantitative as well. Are there some quantitative measures, objectives that we can look at also? I think the key thing is looking at both qualitative and quantitative, understanding the goals and needs upfront, and getting clarity and agreement on what those look like.

Rich, this has been a rich conversation. No pun intended there. The amount of information that you’ve given us is substantial. I know there are people out there that want to dive into more. We’ll discuss that. What are the top things you want our leaders into this conversation to take away with them now?

For the leadership group, I would ask you one question. How clear is your direction for the organization and where you’re going? Whether you’re the CEO for the next five years or whether you’re an HR business partner, do you have clear direction for your team? Research by Gallup over the last 30 years with 10 million managers shows that only 22% of employees think that their leadership team has set a clear direction for the business.

if we're all acting and thinking strategically, we're going to make our lives a lot easier, a lot more efficient, and a lot more effective for everybody. Click To Tweet

The main thing is as a leader, you have to have clear direction. Back to Char’s made a great point earlier. Get your team in a room, talk about what is our strategy. What is our direction? Answer those two questions. What are we trying to achieve? How are we going to do it? Get that clarity. Char brought up a great point too with the idea of create a poster with that strategy on it.

Visualize that, put it in people’s hallways, meeting rooms, conference rooms, and cafeterias because people need to understand the direction. If you’ve got direction, that’s going to build both confidence and competence. People feel good about where you’re headed, have the skills and tools, and know how to get where you’re trying to go. To me, that’s the biggest thing that people are lacking is that clear direction.

Thank you so much, Rich. For our readers that want to know more, I know that you have a lot of books out there and what book is going to be the best one for them to start with based on what we’ve been talking about in this episode?

The best one would be Strategic. I’ve got a Harvard Business Review article that’s based on that as well. If you’re an HBR subscriber, you can look that up. The book Strategic would probably be the one that would be the most comprehensive.

The next question is, how can they learn more from you and get involved in your programs?

I’m a big believer that we must be able to share and give things away to help everybody be strategic. That’s my vision is to teach the world to be strategic. If you visit StrategySkills.com, I’ve got lots of different articles, white papers, infographics, videos, audio stuff that’s free because I’m a big believer that we’ve got to start somewhere. I’m a big believer that if we’re all acting and thinking strategically, we’re going to make our lives a lot easier, a lot more efficient, and a lot more effective for everybody.

Thank you so much, Rich, for sharing your wisdom in this episode. This has been a great conversation. One of the most enlightening for me. I want to dig into all your material and so I’m going to be reaching out to you in the near future, for sure. Thank you so much for being in this episode.

Rich, I’m going to go out and look at your tools. I do have to agree. I could have used you when I was a Talent Management Strategist in a big corporation. Honestly, I think this would have been the key. I did make a difference, but I think this would have gone above and beyond. I would say any leader or HR professional take a look at your resources. Thank you so much for being with us. Great discussion.

Thanks, Char. I appreciate it. Thank you, Sam, as well. Great conversation. Great questions. I appreciate being with you in this episode.

For all you readers out there, we’ll see you on the next episode. Take care.

 

Important Links

• Rich Horwath
• Strategic Thinking Institute
• Strategic
• Strategic Quotient
• StrategySkills.com
• Strategic Fitness System
• Harvard Business Review – Article

 

About Rich Horwath

Rich Horwath is the founder and CEO of the Strategic Thinking Institute, a pioneering entity dedicated to enhancing the strategic capabilities of executive teams worldwide. As a leading strategy facilitator, executive coach, and keynote speaker, Rich has authored eight bestselling books on strategic thinking, including the widely acclaimed “STRATEGIC: The Skill to Set Direction, Create Advantage, and Achieve Executive Excellence.” His profound impact on strategic development is evidenced by the quarter million leaders he has helped cultivate their strategic thinking and planning skills over the past two decades.

Rich’s work and methodologies have earned him appearances on major television networks like ABC, CBS, NBC, and FOX, and his insights have been featured in top publications such as Fast Company, Forbes, and the Harvard Business Review. His dedication to fostering strategic acumen across various industries is also highlighted through his extensive offerings, including strategic thinking and planning workshops, seminars, training programs, and personalized coaching sessions.

To learn more about his approach and to sign up for his free monthly newsletter “Strategic Thinker,” visit www.StrategySkills.com. For direct inquiries or to engage Rich Horwath for strategic consulting or keynote speaking, contact him at [email protected].