There is continual pressure to compromise your strategy with incremental decisions that individually are fine but cumulatively lead you down the wrong path. Mechanisms and policies can fight this “slow fade” in the medium term, and sharing the fundamental insights can keep the company on track in the long term.
When couples separate, there is not one moment when they choose to part. Instead it comes as a series of small incremental decisions – like that night when you chose to stay proud instead of reconciling – that combine over time to form a direction. And each step down the path makes coming back harder.
Companys experience this same slow fade. At the start, the founders have a crystal clear image of their strategy. They know what they stand for, how they make money, where they are going and what they should do and what they shouldn’t do.
As the company grows, this sharp focus starts to be lost. Not in any one big conscious choice, but in a series of small incremental decisions. Should we cut this cost? Should we sign this deal? Should we outsource this function? Should we add this service?
As the company grows, these incremental decisions are no longer taken by the small initial group, they are spread wider and wider in the organisation. As time passes, growth causes the company to become more complex, obscuring the clarity of the original strategy and the incremental small decisions layer up………CEO successors may be great leaders, but miss the fundamental insight.
There is a famous memo from Howard Schultz lamenting the commoditisation of the Starbucks experience through incremental decisions, none of which on there own were mistakes, but cumulatively moved Starbucks away from their original insight about human need for a “Third Place”.
In the short term, the slow fade can be reduced by clear mechanisms and policies that protect the fundamental insight and hold the company on course despite the distractions.
Be clear to separate means from ends however – these mechanisms and policies are just means, and will need to change as the world changes. To have the flexibility to change these policies when needed and stay true, there is no substitute for a shared understanding of the fundamental insight across all levels of the organisation.