Strategy is important for all companies, yet a common pitfall is not looking at the organization holistically. Often, strategy is biased, taking a narrow view of the company. As a result, the strategy might solve a few problems but may not be transformational at all.
A simple analogy for strategy is picking apples. You pick up the fruit and quickly look at it; you might find a few spots and still decide to buy it, thinking it appears to be healthy. I learned through MIT’s Global Operations Lab (Go-Lab) that by taking a holistic approach, you can observe and extract additional information that can make strategic decisions, or picking the right apples, more effective. By carefully viewing all sides of the fruit and considering its condition below the surface, you may discover that a simple spot is an indication that the apple is not so healthy after all.
Go-Lab is an international, integrative project of the Executive MBA in which teams are tasked to solve a strategic challenge for a real company. I had the fortune to work alongside an incredible team and a highly invested client. The challenge was to provide strategic guidance to a global organization on whether or not to enter a new business somewhat far from its current capabilities. As I reflected on this experience, it became clear that these three learnings are absolutely critical when it comes to holistic and effective strategy.
Effective strategy is multidisciplinary
When presented with a problem statement, the first step is to “go see and assess” to determine if the stated problem is in fact the real problem. The goal is to identify the actual problem and better understand its cause. Just like the examination of the apple, this means looking at the problem statement from different perspectives.
In the Go-Lab project, this came naturally for our team because we all came from diverse backgrounds, from strategy and R&D to finance and pharma. We asked our client all sorts of questions and requested information from different departments. As a result, we talked with people across the entire organization, gathering data and perceptions from detractors, as well as regions and departments that weren’t obvious internal stakeholders. We also talked to external actors in the client’s ecosystem who could contribute other viewpoints of the organization. We included researchers, universities, and even other companies related to the industry in our interviews.
While it took some time, these discussions gave us a well-rounded idea of the company and its position in the marketplace. Moreover, it revealed that the original problem statement didn’t represent the real problem at stake. Getting to this point was crucial in delivering good results for the project and the client.
Effective strategy is honest
Acknowledging the organization’s capabilities is key. Several times during the project, my teammates would say, “the farther you are from headquarters, the more real it gets.” People at the front line are the ones who experience the true ability of the organization’s capabilities. By detaching from corporate beliefs, you can make more assertive strategic decisions.
Throughout our project, we encountered key people at the company’s headquarters who defined the organization based on past experiences and successes. As a result, the company thought it could enter the new market on its own. From our visits to the company’s sites and talking to frontline employees, we found many gaps in the company’s common knowledge and the new business’ benchmark. When we brought back this information to the client, they were able to be honest with themselves and admit to where they really were in the market. In the end, this honesty enabled them to select a much better strategy to enter the space.
Effective strategy is political
As noted above, problem statements aren’t always accurate. A political lens is helpful to understand the underlying interests of different groups surrounding the problem. Understanding this can help to reduce obstacles in generating commitment towards strategic goals. If you can’t align interests, the organization won’t move towards the desired direction.
As we dug in deeper through the project, we realized that the customer had fundamental interests that weren’t explicit in the problem statement. We had to tap into our political savviness to understand these interests and how they conflicted with the views of other internal stakeholders. Realizing this helped us to frame our proposal in ways that would be more practical for the client to sell their strategy internally.
Applying a holistic approach
The client moved forward with the project, the team graduated, and these learnings lived on for a new purpose. Today, I’m in charge of strategy and business development in my organization and use these Go-Lab learnings to help drive a transformational, strategic agenda for the company.
I follow this holistic approach to include a diversity of people in discussions, learning from their perspectives on the company’s position and understanding conflicting interests in order to move forward. By doing this, I have been able to reveal misconceptions about our capabilities and opportunities, which helped me to take the lead in redesigning our growth strategy for the next five years.
Thanks to this experience, I have changed as a leader and a driver for change. Without coming to MIT, I would never have imagined that something as simple as “picking apples” could deliver transformational results if done well.
Ana Escandon, EMBA '19, is Head of Sales at Citrofrut in Monterrey, Mexico.