The Importance of Values and Knowledge in the Strategy Making Process
by Michael S. Goree and Eric Craymer
Obedience without Knowledge is Blindness.
Knowledge without Direction is Chaos.
Knowledge without Commitment is Wasted.
Knowledge with Purpose is Power.
A Need for Knowledge
It is a different world out there. Other organizations are trying to attract your members and add services that are your purpose for existing. circumstances change before you have the time to execute your plan. You are trying to redefine yourself in order to meet the shifting needs of your membership base. Why is all of this happening? Because the nature of change has changed.
Change today just happens too fast. In the past, you had time to think about a response and consider it from all sides. Today you must react reflexively. In the past, if you got a little behind, you could still catch up. Change today is usually of a monumental nature and if you miss it you are sunk.. Strategies today are like a Pentium II processor, faster, more powerful and soon to be obsolete. Due to the increased globalization, enhanced communications, and the power of computers, it is harder and harder to create a strategy that will provide a competitive advantage for even a short period of time.
In a world where change is certain and ongoing, knowledge becomes the critical factor. In such a world it is necessary to remain flexible and adaptable. Knowledge is how you do that. You must be able to gather and process information, create knowledge from it, and use that new-found knowledge to take action. In other words, you must, as an organization, be able to learn. Being able to learn faster and better is how organizations gain the flexibility to determine your future.
Knowledge and Strategy
Just having the knowledge is not enough. If you pursue knowledge for its own sake, you may wind up like the professional student who has never held a job, filled with knowledge that remains unused because it has no direction. To be useful, knowledge needs to be applied.
Strategy is the way that you apply knowledge. It becomes the criteria you use to select which information to look for, it is the filter that you use to interpret the information that you find, and it gives you the tool with which to use your knowledge to take action.
Strategy, Knowledge and Core Values
With constant and significant change comes unlimited opportunities for new learning and strategic initiative. How do you decide whether or not to pursue a particular strategy or seek out the knowledge it suggests? Knowledge, and strategy, must be pursued with a purpose and a direction or the result is chaos. Because external and internal circumstances are constantly in flux, your choices must be built upon a base that rarely if ever changes. In our experience, the best place to find that sort of foundation is in your Core Values.
Core Values are the set of beliefs that govern your behavior. You do not create them, you look at what drives your efforts and motivates your members. They are the principles that guide you in selecting the truly important activities you undertake and in determining how you are willing to accomplish them. They also tell us what you will say no to, even if it would help you achieve your goals. They are enduring. Because of these qualities, they are like a compass to the organization
In their book, Built To Last: Successful Habits of Visionary Companies, James Collins and Jerry Porras compared pairs of companies that were nearly identical except that one was very successful and the other was not. They conclude that the determining difference was that the higher performing companies had a strong and enduring set of Core Values and that they literally used these Core Values to manage the company. Core Values, combined with organizational vision, provide direction and motivation for the entire team. This guidance allows members to make snap decisions and to function fluidly and flexibly in the face of change while still maintaining direction and purpose. Successful companies embed their values throughout the organization and the strategic process.
Many of the organizations we encounter dont see this connection. They try to build their strategy using a model similar to the pyramid in Figure 1. First comes the corporate mission. Then, layer by layer, they build support for the mission down to the ground. Unfortunately, practical construction and gravity require us to build from the bottom up. What actually results is an upside down pyramid with the corporate mission at the bottom. Each additional layer is precariously built on this small and pointed base. When an unstable structure like this is hit with the force of the rapid and drastic change discussed previously, it will teeter and fall.
The process is not wrong, it only needs a little support. To provide stability to your organization, your strategy making must be deeply imbedded in your Core Values. The entire structure must be pounded deeply into the bedrock of the organizations values as in Figure 2. Core Values change little if at all. When determining the mission, and what knowledge to pursue, the values can be turned to as a guide. By firmly planting Mission, Strategy, Learning and Tactics in the deepest held beliefs of the organization, it can maintain a consistency of purpose and direction even as it quickly alters course to meet new circumstances. If it isnt core, it is up for grabs..
Knowledge and the ability to learn become a primary focus in strategy. They keep you ahead and on top of the game. By basing your strategy in your Core Values and by being able to learn, your organization can be fast and flexible but still maintain strategic consistency. Using information to experiment and learn, to alter the organization to match the new picture you have of the world, and to make tactical and operational decisions that will be successful given this new world view, the organization remains flexible enough to weather change. By pushing the strategy process, starting with the Mission, firmly and deeply into the Core Values that are shared by the organization and the members within it, all actions and decision remain true to a common purpose and direction.
(Michael Goree serves on the faculty of Michigan State Universitys Graduate School of Labor and Industrial Relations and Human Resource Management and is President of Human Resources Advisors, a consulting firm dealing with people and strategy issues. Eric Craymer is a business owner, consultant, and researcher and works with Mr. Goree.)