Strategy’s Shawshank Redemption

SPOILER ALERT: “It would take a man 600 years to tunnel through a wall. Old Andy did it in less than twenty years.”

— Ellis Boyd ‘Red’ Redding (Morgan Freeman)

In the movie The Shawshank Redemption, Andy Dufrense (Tim Robbins) tunneled through a four feet wall of rock in 97% less time than normal with a rock hammer. How? Put simply, through FOCUS. Andy focused his attention on the one most important strategic activity, every day, every week, every month, every year, and every decade!

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Many things happen around Andy Dufrense, but he remains focused on the core, strategic activity. What is the lesson for strategy planning and implementation?

Rely on measured give-get, and not gut feel to decide your strategy.

Andy’s strategy is not based on gut feel. Rather it is based on precise measurement of the give-get between the strategy lever and outcome of interest. Visualize, what it would be like to rely on gut feel versus use give-get:

 Andy relying on gut feel: Freedom is important, I need to work hard, and it will happen. I can feel it in my gut. Its a core value, a mission!

Andy using measured give-get: Using an ice hammer for __ hours a night, I will chip away ___ inches of the tunnel each week.

For a 4-feet wall, over 988 weeks, you can do the calculation.

 Now, think about your company’s strategy based on gut feel versus measured give-get.

 CEO relying on gut feel: Revenues are important. If my employees are engaged, my sales team motivated, we will make it happen. I can feel it in my gut!

CEO using measured give-get: A 10-point increase in customer value is associated with $__ increase in sales. Decreasing service-related complaints by 26% is associated with a 10-point increase in customer value. Focus on decreasing service-related complaints—that’s my ice hammer!

Win one marathon, rather than running many marathons to win none.

Based on the precise give-get, Andy runs the one marathon that will win his freedom. He doesn’t scale walls. He doesn’t try to inspire or engage fellow inmates. He doesn’t try to do ten thing hoping and praying one would work. There isn’t a precisely measured give-get to all these other activities. Smartly, Andy’s strategy is to win the one important marathon with a known outcome. It is not to run many marathons and win none.

Visualize, what it would look like winning one marathon versus running many to win none.

Andy running many marathons to win none: Talk to many other inmates to energize them. Look for alternative ways to get free. Engage and energize guards to win favors. Etc. Etc. Etc. Etc. Etc. Etc. Etc. Tedious and tiring, to say the least.

Andy running one marathon to win: Using an ice hammer for __ hours a night, will chip away ___ inches of the tunnel each week. For a 4-feet wall, over 988 weeks, you can do the calculation.

 Now, think about your company’s strategy. Visualize this:

CEO being made to run many marathons to win none: Sales are important, let’s have a value proposition based on what feels right. We need to increase sustainability through waste reduction. Need to engage employees, as that is what leads to higher profits. Oh, and safety too. Can’t forget “messaging” – get a communications expert. Don’t forego digitization and digital apps to please clients. And, branding. Hmmm…what about talking to clients so we can listen to them?

CEO running one marathon, so the company wins: A 10-point increase in customer value is associated with $__ increase in sales. Decreasing service-related complaints by 26% is associated with a 10-point increase in customer value. Focus on decreasing service-related complaints—that’s my marathon (err…ice hammer, I mean!)!

What prevents CEOs from running the one marathon to win?

Usually the senior executives reporting to them! As described in our forthcoming book FOCUS, CEOs end up run multiple marathons and winning none when their senior executive thinks of strategy from their own singular perspective.

·      The VP of Human Resources pushes training and employee engagement!

·      The VP of Communication may push culture change through sustained communication.

·      The VP of Sales wants a sales playbook.

·      The VP of operations may promote cost cutting through lean production.

·      The VP of Health and Safety may want to increase safety initiatives.

·      The VP of IT wants a company-wide reporting system to consolidate information.

Each senior executive will justify their tack based on consulting reports or industry trends, or citing case of other companies, how things were at their previous jobs. Each is a marathon that the company should run. Rarely would the executives have done the statistical give-get analysis to establish the precise gain in an outcome variable.

Calculate the Get-Go of the one marathon to win

To do this, one would have to develop measures of training, employee engagement, communication, culture, cost cutting, safety, information reporting and link them to an outcome using statistical models. It would also require the senior executives to agree upon the outcome. Should it be sales, margins, customer value, stock price, or something else?

Once agreement is established the executives would need to collect real data for the company and develop a rigorous conceptual model that is empirically validated. The could not, and should not, use their gut feel, intuitive leaps, or mythical numbers to justify their position. Rather, the empirical model’s results should decide the one marathon to run.

The CEO needs to step in as a strategy leader, directing resources to the empirical model. Deciding on the winning marathon requires systematic data collection, rigorous mathematical modeling, benchmark assessment, and thoughtful discussion. It’s strategy’s Shawshank Redemption.

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