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I’m going to end today’s Strategy Insights by talking about a client and some of the challenges, successes and particularly one of the deep insights we developed for this client. This client is named Raka, and she’s of Indian origin. She has worked at a very big, elite consulting firm and rose up to associate principal. She’s now head of strategy at a large industrial concern in the Midwest. She’s a nice lady. She has kids. Her husband works in the tech sector, and because he works in the tech sector, they have to commute a lot because he’s based on the West Coast, but they seem to make it work.
She views herself as a strategist’s strategist. She is a pure strategy player. Her CEO is about to retire and name a successor, and she’s been positioning herself to run the company because she believes the company needs strong strategy and she’s the best person to do that.
She has been pursuing this for a few months, and during this time, she hasn’t been working with us. I am giving you a backstory now. Over time, she’s alienated many within the leadership team at her company. She’s not getting traction with her career, even though she’s been heading the strategy department for a long time. She hasn’t been given any positions of authority to indicate she’s in the running to replace the CEO. When you’re about to be moved into a senior leadership position, you’re moved into certain roles to signal to all employees that you’re rising to the top, so they need to respect you, but to also give you the exposure to have the authority to manage the company. She wasn’t given any of that.
Her career reached a point where she was working in her department, which isn’t very big but still sizable. She feels like she’s isolated. She doesn’t understand why nobody understands that she’s the best person to run strategy and a strategist should run the company, and she feels as if she’s slid back. She believes the company is giving her signals to stay in her lane, focus on strategy, and that’s as far as she’s going to go. It’s not a good place for her to be. When she joined the coaching program about a year after this had happened, she wanted to ask me what she could do to show them the value of strategy to the company and ways to become a better strategist.
Through a series of conversations, I flipped the question around. I wanted to show her that she’s not the best strategist in the company. Second, I wanted to show her that she needs to think carefully about whether strategy is the skill the next CEO needs. And third, I wanted her to ask herself whether she is the best person to be CEO.
I gave her an example about Formula One racing. The example of Formula One racing goes like this. Mercedes Benz is dominating the Formula One. Now there is a guy called Hamilton. Not Linda Hamilton, she is fighting terminators. Not George Hamilton, he is getting a tan and Alexander Hamilton found Federal Reserve and he is dead. Oh yes, it’s Lewis Hamilton. Lewis Hamilton is the reigning Formula One world champion.
Imagine if I said to him, “Lewis, you’re winning Formula One, so you obviously know what you’re doing, but I’m a management consultant, so I’m going to help you develop a strategy to be better at Formula One.” I’m going to use the typical strategy approach that all readers would know if they’ve read The Strategy Journal and followed Insider programs. “The first thing I’m going to do is a top-down analysis. I’m going to interview everyone: you, competitors, past winners, and we’re going to find out different things you can do to win more races. Next, I’ll do case studies of past winners. Then I’m going to do a top-down financial analysis to find out where there are gaps. Where are we slow, where are the costs, where are the investments going?”
We will do focus interviews, benchmarks, case studies, and a top-down financial analysis. I’ll analyze all of the data I can get access to from all of the races. I look at data that even Lewis Hamilton’s team doesn’t have access to. Maybe Ferrari is nice to me, and they give me access to their data because they will find it useful if I share some of my findings with them. I then have a workshop with Lewis Hamilton and his team and point out things they haven’t seen before.
For example, maybe Ferrari is using a slightly different technique to change the wheels when the car comes into the pit stop, and they shave off 1/10 of a second because of it. Now, 1/10 of a second is a lot when it comes to racing. The other thing I realize is that the way one of the teams, may be the Red Bull Sauber team, jumps into their cars is a little bit different, which means they shave off 1/5 of a second. I also realize the Ferrari team starts their engines in a different way. Even though Lewis Hamilton is now winning, I come up with a list of things he and the Mercedes Formula One team can do differently to be faster based on the way they organize themselves and where they make the investments to be faster. I give Lewis Hamilton and his team this big presentation and say to him, “Lewis, you’re going to win” and he wins.
Now, can I say I’m a better driver than Lewis Hamilton? That would be absurd for me to say that because I analyzed it and came up with a better strategy, I’m a better driver than Lewis Hamilton. Of course, I’m not a better driver than him. I’ve never been in a Formula One sports car. But I’m the best advisor to Lewis Hamilton.
This is the mistake Raka was making. She needs to distinguish between being a strategy advisor—which is what you are when you’re a consultant—and being a CEO. Being a CEO is like being the driver. It’s like being Lewis Hamilton. He needs to be able to manage those G forces when he’s turning around. When you’re cornering at 160 kilometers per hour, imagine the fatigue and stamina you have to deal with. It’s very different from reading data in a nice, air-conditioned office, versus being able to read all the signs, have someone talking to you through an earpiece, and being surrounded by cars that can flip over at any second and kill you. That’s a different way to drive. I can’t say I’m a driver, but did you notice I did everything a normal strategy consultant would do? But I am not a driver, I’m the advisor to the driver.
It’s the same thing when a strategy consultant presents a strategy to the CEO, but only the CEO really knows how to use that strategy because they’re implementing it in real time. Just like the driver was to take all this information, process it and adjust it in real time. You can’t say you’re a strategy expert unless you’re actually responsible for using the strategy. But you can say you’re an expert advisor. You’re the world’s best strategy advisor. You’re the world’s best strategy thinker, but you’re not the world’s best strategy practitioner. That’s the CEO.
You won’t know everything about strategy until you’re in a position to lead a company to implement it. Share on X
I had to get Raka to understand that because she’s doing herself a phenomenal disservice by thinking that she knows everything about strategy. You won’t know everything about strategy until you’re in a position to lead a company to implement it. I didn’t want her to lose this chance to learn more because she’s very smart and talented. But by thinking this way and acting this way, she’s preventing herself from truly being a good strategist.
The second thing I asked her to do was to think about this: Does your company actually need a strategist in the CEO position? Is this what they actually need? The answer is no. What they needed was someone to reinvigorate their R&D department. That’s where the company was failing. The board wanted to bring in someone who would get innovation humming again. The new CEO was expected to reinvigorate innovation. I told Raka, “This is what’s happening. You need to show the board and the management committee that you are that person. So, as a head of strategy, why are you looking at acquisitions when you know the biggest problem is innovation?”
Long story short, when the company was making bets in innovation, they were using the kind of VC model where they would take 20 bets and invest them all in things where the technology was uncertain. It wasn’t clear that the technology would work. I asked her to separate their funding to maybe 50/50 or 60/40. They could pick the number. Let’s assume its 50/50. Then 50% should go to technology that’s uncertain, and 50% should go into investments where the technology is proven but the production is uncertain. For example, in the early days of electric cars, it wasn’t clear that the batteries could work as planned. That was a technological uncertainty. Today, if you want to build an electric car, we know the batteries work. But the question is whether your team can build a factory to put the batteries together in an economical way. That’s a production uncertainty. We know the technology works, but we’re not clear whether we have the technology capability.
There are many insights here. First, be careful of what you think you’re an expert at. A lot of people are good at strategy, but in the same way I can’t tell Lewis Hamilton that I’m a better driver than him—even though I’m giving him the best strategy to win—you can’t tell the CEO you know more about strategy than they do because they are the CEO, and they’re the one who is driving that strategy.
Second, you must know what the company wants and position yourself to be that leader. At times, they want an M&A person to drive deals. At other times, they want a strategist. At other times, they want someone who can work with regulators. If you say, This is my skill, and I’m the best at this, and the company needs this, you’re following a very bad approach because you’re not asking what the company needs and wants. Finally, if you call yourself an expert, you automatically cut off any avenue for learning because you feel that because you’re an expert, it looks as if you don’t know what you’re doing if you ask for help, and you should never do that.
As always, I hope you enjoyed Monday morning at 8 a.m.
Other Articles
Understanding Negative Interest Rates
Chief Strategy Officer: Promotion or Demotion
The Power of Unconscious Signals in a Consulting Interview
This is an excerpt from Monday Morning 8 a.m. newsletter, issue #27 (part 3). Many of you have found Monday Morning 8 a.m. so useful that you’ve asked us to release a book version of these newsletters. We’ve obliged and released a Kindle version, which you can find on Amazon under “Strategy Insights.” It contains the insights from previous Monday Morning 8 a.m. issues, edited into a bite-sized format that’s very easy to use. And you can learn about other FIRMSconsulting books here.
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