Too much Strategy or not enough?

A reader asked me to ponder the question as to why Shell seemed so poor at implementing, seeing things through, following things up.
Good question.
Is the statement true? We have had some great successes, some of our businesses are very well run (eg STASCO) and some individual projects and initiatives have led the world. GBLP I think is a great initiative well followed through over many years – the flaw there is how we use it (see an earlier blog). Generally, however, I do think there is truth in the statement.
So the question is, why? And what can we do about it?
Jeroen van der Veer’s theory was that frequent job rotation was a root cause. That is why our job descriptions now generally talk about four year terms. I do think this is a good idea and we should see some benefits from it eventually. But I’m not sure it is a root cause. Most companies have similar rotation to us. Many even have massive turnover of staff, which would make the problem much worse. Yet we are the ones with the problem. This is not enough.
The latest theory is that we have too many thinkers and not enough doers. In Transition 09 strategy departments have been cut and often put under finance, while the rest have been urged to follow ESSA and implement rather than reinvent.
This has appeal and will have some further positive effects. ESSA is undoubtedly a good goal, businesses which make things as simple as possible tend to do well. I like Eliminate especially, as that deals with a weed at its root rather than just on the surface. So far I see more S and S than E in practice.
But as far as strategy is concerned, I have a theory which is precisely the opposite of current thinking. To me a key root cause of poor implementation and follow through is poor or incomplete strategy. And strong strategy starts at the top.
The best implementers have simple, clear, strategies, robust over many years and epitomized by their top leadership. Look at Exxon. Goldman Sachs. Wal Mart. Tesco. GE. IBM. Toyota (whoops). Ikea. Easyjet. Anardarco. Most of us could write a paragraph describing the core strategies of these companies, and there would be high continuity from year to year. We can see how that strategy translates into action, culture, recruitment. It doesn’t change when a recession comes along, only has fine tuning. They don’t seek to please the analysts as a goal (maybe GE as an exception there). They buy at the bottom of markets and sell at the top.
Could you write the same paragraph about Shell? I could back in the 1980’s but I struggle since, to be honest. I don’t blame the current EC particularly, this is something that takes years to lose and years to regain. We were the best in the world 40 years ago, a position which itself had taken 40 years to build.
Much of what I have seen in Shell over the last fifteen years has been a travesty of the word strategy. I have seen great strategies for parts of Shell, but these have been fatally undermined by being unhinged from anything above, and therefore blown away when storms arrive. I have seen many checklists or process maps masquerading as strategies. I have seen planning masquerading as strategy, and expect that to proliferate now that finance is in charge. I have seen trite universal goals pretending to be strategies. I have seen beautiful intellectual scenarios which then have no bearing on any activities. I have seen McKinsey roaming every corridor while own teams are dismantled – talk about a recipe for no follow up! I still see presentation after presentation suggesting that our sole competitors are Exxon and the rest, when it is plain that thinking became obsolete twenty years ago. I have seen a lot, and it makes me want to weep.
As usual, I look at myself, as we all can. I was nominally managing the Global Solutions strategy for many years. Being arrogant, I could class GS in the category of good but unhinged, but then why was it unhinged? Partly because there was nothing to hinge to, but also because we wanted it to be! I spent years dodging people from corporate. So you could equally argue we got what we deserved.
So, my argument is that the root cause of poor implementation in Shell is not too much thinking, but rather too little. Or at least an absence of focused, quality, sustained, strategic thinking led from the top. And manifest by the lack of a strategy skill pool in the company. We have outsourced our most precious activity to McKinsey!
And what are the root causes of that? Leadership. Leadership quality, leadership complacency, leadership opportunity. Again I stress this is not an attack per se on the current leadership.
The three above are related. Read the Charlemagne column in the Economist. Here is a great example from February.
http://www.economist.com/world/europe/displaystory.cfm?story_id=15452612
Wherever you read the words EU, substitute Shell. Same problems, same diagnosis. Complacency coming from a glorious history and a culture that can’t move on. Lack of opportunity coming from complex outdated structures that prevent and dilute decisions and actions. And, over time, people quality suffers too, and a vicious cycle results.
Is there a solution? For the EU, probably not, short of war or economic catastrophe. For Shell? If there is a solution, I submit it starts with the leadership root causes rather than with ESSA and relegation of strategy to the sidelines.