Chief Strategy Officer, Issue 1

The Big Interview We speak to Bloomberg's Global Head of Social Media, Robert Harles ahead of his presentation at the Digital Strategy Innovation Summit

CSR in

2013

George Hill has a chat with Mark Goyder, Founder of Tomorrow's Company about the state of CSR Strategy in 2013

2

CONTENTS The Big Interview - p.11 George Hill spoke to Bloomberg’s Head of Social Media, Robert Harles ahead of his presentation at the Digital Strategy Innovation Summit in New York, to discuss the ways that he has turned Bloomberg from social media rejection to embracing it throughout the organization.

Content Strategy Explained - p.2 Yulia Ivanova looks at the ways that companies should be utilizing content within the strategy and marketing to engage with their audience beyond the traditional sales channels.

How to Fix Strategic Planning - p.4 Niko Karjaleinen, VP of Strategy at American Express explains his relationship with strategic planning and what you can do to improve yours.

The Social Approach to Strategy - p.6 Are you utilizing social media in your company strategy in the right way?

Claire Ellis looks at the approaches that have had genuine business results.

CSR in 2013 - p. 5 We speak to Mark Goyder about how CSR could affect your strategy in 2013.

Upcoming Strategy Events - p. 19 Listing global strategy events taking place within the coming months.

The next generation of strategists – an unknown quantity? - p.16 Nicholas Barton discusses the issues with new talent acquistion in strategy

A LETTER FROM THE EDITOR

W

elcome to this issue of Chief Strategy Officer.

Strategy is a business function that has seen a considerable rise in importance in the past few years, with companies realizing the importance of having a firm grip on the way their business is heading.

We hope that some of the issues addressed in the next few pages will help you understand some of the most important trends currently affecting senior executives.

In this issue we discuss the importance of CSR in company strategies with Mark Goyder from Tomorrow's Company. We also look at the way that Bloomberg have tackled digital strategy with their Global Head of Social Media, Robert Harles.

The importance of social media and content is also discussed, with Claire Ellis and Yulia Ivanova, Strategy leads from The Innovation Enterprise.

I hope you enjoy reading this magazine as much as I have enjoyed putting it together.

Watch - Chief Strategy Officer Summit Highlights, New York 2012

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GEORGE HILL

CHIEF EDITOR

Digital Strategy Innovation Summit 21-22 March 2013 New York, The Plaza Hotel

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4

THE SOCIAL APPROACH TO STRATEGY

T

here have been several bizarre strategy trends over the years, from people working in the office with their children to desks with no chairs. Each have seen a peak and then have been phased out.

32 percent of all Internet users are using Twitter

promoting the latest deal get fewer followers than a company who discuss topics relevant (Source: Marketing to their client base without pushing their Land) The products. Posting links that your followers will find Google +1 button is used 5 interesting will reap huge rewards for you in the long run rather than simply billion times talking about the latest features on a per day product you are trying to sell.

One of the strategies that has shown real staying power and genuine results in recent years has been social strategy.

People have been discussing the use of Twitter, Facebook and Linkedin as channels to reach current customers and potential customers, but looking at these as simple communication tools detracts from the real power within social media.

Many companies are scared of the new movements in social media, from blocking it's use in the office to firing people based on their actions using social media.

Although this can sometimes be done with justifiable reasons, in reality this is done through fear and a misunderstanding of the kind of power that it has.

The truly unique benefit that social media brings to a company is not that it is a free emailing system to promote your products. If you were having a conversation with somebody and they spent hours discussing the best deals that they currently have at work, the chances are that you would not only end up walking away, but you would probably avoid them in future.

The same goes for social media, people do not have Facebook accounts to hear about things they can buy, but to keep up to date with things that interest them. People have Twitter accounts not simply to see companies promoting their products, but to keep up to date with topics that they are engaged with.

This is why so many companies who use social media simply to push their products fail in their social media strategies. The ones who only post links to twitter

" Your customers are increasingly giving their opinions about your company online "

Social media is essentially just conversations with your customers and potential customers. Dealing with social media up until now has been a job given to an intern or a junior within the company. This is the equivalent of somebody coming up to you at the front of a shop, expressing interest in buying your product and you sending for the office intern to seal the sale. Social media should be adopted as an extra, it needs to be an effort throughout the entire company.

(Source: AllTwitter)

People are increasingly taking to online mediums to declare their views of a company's service or quality, if you had somebody arriving in your shop to make a complaint about what you were doing, the first person you would call would be your manager rather than the intern working in the store room. Complaints that go unchecked can often sour a relationship with a customer and subsequently others that interact with that individual. Having somebody or a team monitoring what is being said about your company or products allows situations to be rectified and in many cases turned into positive experiences.

Social media allows companies to have these conversations directly with their customers, further focussing their efforts to an individual level. This allows people to interact with the company at a personal level further increasing the likelihood of a longer term relationship and an increased trust between your consumer and your company.

So who should be taking part?

There are several schools of thought on this, some say it should be the marketing team as they have the outbound knowledge. Others claim it should be the sales team because it allows them to interact with the very people they are attempting to sell to.

However, the way that this works best is through every element of the company utilizing social media to help their customers. For instance the customer care team could create a system where a customer feels genuinely looked after rather than the focus of a sales pitch and the

5 marketing team can create information for the customer that is genuinely suited to them rather than creating a one size fits all approach.

The other major element of

As of 2012, a social media strategy is 17 billion that your company has the opportunity to foster location-tagged and take part in posts and check-ins discussions them. Being able to be part were logged of the conversation rather than being the subject of the conversation allows you to engage with the same people who will hopefully become your customers.

(Source: Gizmodo)

The part of this that companies often find the most difficult is that through the focus on profitability and moving forward, there is often little time allocated to listening to customers. There are research groups but talking to people where people are talking about you can sometimes lead to awkward situations.

" Social media is essentially just conversations with your customers "

For instance, there is a real chance that people will discuss your company in negative terms or will be discussing something about the company that could be embarrassing. However, as this is taking place with you in the conversation, you can address these issues before they become deep seated issues.

As with any business decision there are positives and negatives to social media usage. It does allow people to have increased 56% of access to your company and company tweets individuals within your organization which can have were varied consequences. What this ignored in 2012 does allow and also promotes is an increased transparency (Source: Alltwitter) within the company, allowing people to know the ways that you do things.

Many companies are changing the way they work due to the rise in social media, others are waiting to adopt.

One thing is certain, those who are yet to jump on the bandwagon are in real danger of missing it altogether.

CLAIRE ELLIS

STRATEGY LEADER

7

CSR IN 2013

B

efore 2012, few people working outside of the banking industry had heard the word 'libor' let alone understood what it meant. In 2013 it has become a major talking point thanks to the manipulation of libor rates to take advantage of consumers in order to increase profits.

The outrage and fallout that banks have had from this has meant that many banks who were caught up in the fiasco have had to reevaluate their CSR strategy and attempt to make their business practices far more transparent.

This is a trend that we have seen increasingly since the 2008 economic collapse, as the blame for this fell heavily on the shoulders of banks and bankers.

This year will see companies increasingly cleaning their houses, making sure that their transactions are both transparent and fair. Ultimately unless you have the trust of the people who are going to be buying your products then the chances of you being able to succeed in a competitive market are slim.

Many companies see CSR as something they can fulfil by having an annual charity day or by having a day where employees go and tidy a local park, is this correct?

" It is no more than the

expression of a company's values in all of it's relationships "

So with 2013 looking like a key time for several companies in terms of adopting a sustainable CSR strategy, I spoke to Mark Goyder, Founder Director of Tomorrow's Company, which is a global leader in business sustainability and CSR issues.

Mark explained to me how CSR is not simply the act of charity or the perception of being good, but the alignment of your company goals and your statement of intent. For instance when Barclays communicated to their customers that they were working for them, offering good mortgage rates and good interest rates, in their company there were people who were deliberately making things worse for consumers for their own benefit.

From the thousands of conversations that Mark has had with companies he has identified that there are generally two attitudes towards CSR - compliance and conviction.

Compliance is companies seeing other companies having CSR departments and doing the minimum to keep up with them.

Conviction is stating clearly what your company stands for and making sure that you are communicating this in every relationship.

So which CSR are you?

Many of the companies that Mark talks to discuss how their workforce have become disengaged with their CSR efforts and there is no real drive to make sure that they are being done correctly.

Here the issues revolve around the kinds of things that the stakeholders link themselves to.

8 The one issue that every employee has a link to, from the CEO down to the employee working their first day, is that they are part of the same company and share the company's ideals.

" What I'm finding is that companies aren't looking at their statement of purpose "

Therefore a way to help employee engagement through your CSR should be by communicating the company's ideals in all of your relationships. Although helping clean up the environment and helping deprived communities is a fantastic cause, the company needs to look inwards before it looks outwards otherwise it creates cynicism about the inconsistency.

So why is this so important?

CSR is about relationships, this is not just the relationships between your sales team and customers, but all relationships.

The old phrase is it's not what you know, it's about who you know. I would also add in it's also how you know them.

Relationships are the foundations of business, if a company feels that you are untrustworthy then they are unlikely to continue doing business with you.

Conversely if the relationship is positive, the chances are that the company or individual will continue doing business with you.

Mark also mentions a book that he has recently read, Grow by Jim Stengel, which case studies several companies who have been incredibly successful because they have linked their core strategy product to something that their customers and stakeholders can link to ideals.

An example of this would be Method who clearly communicate their company ideals through their products. They advocate clean products and helping the environment and this is clearly shown through the ingredients in their detergents that don't harm the environment. This gives them a brand identity that is clearly communicated and identifies with their customers.

So which CSR are you adhering to? Are you making sure that you are communicating the core ideals of the organisation through every relationship or are you keeping up with the Jones'?

Tomorrow's Company is a London based global think tank delivering value for business leaders and owners by addressing the systemic questions of the business world.

For more information visit their website at:

tomorrowscompany.com

GEORGE HILL

CHIEF EDITOR

Chief Strategy Officer ie.

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10

THE CONTENT STRATEGY The phrase 'Content Is King' has been used throughout 2012. It has become the go to phrase for many working within the strategy space when considering ways to generate increased audiences both online and offline.

The concept is that through the company creating innovating and exciting content, the audience, customers and potential stakeholders are more likely to engage with the brand and therefore increase the brand influence. Another phrase often used to describe this is 'inbound marketing', named due the process of your customers finding you as opposed to you targeting and finding them as essentially cold leads.

One of the main selling points of this strategy is that it allows companies to connect with their customers beliefs and interests in a way that is not a direct selling platform, meaning that people do not feel like a commodity and do not feel threatened. By providing information and insights into aspects of the company that may not be directly part of sale, it creates a truer identity rather than the broad

" it allows companies to connect with their customers beliefs and interests "

strokes that you see through traditional advertising techniques.

This has become particularly prevalent recently given the influx of reviews from individuals. Being able to provide the information that you may not get through an advert

" The internet has meant that every single company can become a publisher " or a press release gives people a genuine glimpse into how the product and company works as a whole. This is useful for today's consumers- for instance, a customer who wants to buy a new car will not go directly to the car company and ask about the merits of this particular car. Instead they will read about the car on the multitude of online resources.

This is a trend that has come to forefront of strategic thinking in the past 5 years as online resources have become freely accessible and unbiased. With a plethora of places to gain knowledge about any subject, people no longer believe what the marketing teams say about the product, instead they look at what thousands of people online think. Robert Harles, who is also interviewed later in this magazine, described this process as being like the Sauret Painting 'An Afternoon in The Park', in that from far away you can see the broad strokes, but once you look closely you can see the individual dots making it what it is.

Therefore, the best way to connect with the individuals is through discussing what it is that makes your company what it is, not through telling people that you make the best product or that you are the most cutting edge at something, but letting them come to this conclusion through your content. This way you not only become interesting to these people but you are also doing so in a fashion that is genuine, where people feel like they have come to their own conclusions about you rather than being told how to think.

Take the Apple store for instance.

In the Apple store, the way to buy an Apple product is not obvious, they do not over push a product, they do not make comparisons saying 'we are better than xyz so buy our products'. Instead they allow people to use the products and come to their own conclusions.

There is clearly an element of salesmanship within the shops, but it is done in a very inbound way.

This is similar to the concept of content marketing as many people

11 come into the Apple store not to buy the product the first time they visit, maybe not even after the 10th visit, but because they know more about the product through using it, the chances of them becoming a paying customer is vastly increased in the future. After all in your sales department, would you rather have somebody visit once, not be interested and never come back or somebody who comes 10 times and makes a purchase on the 11th?

But how does this work online?

The internet is the most powerful marketing tool of the last decade and this has allowed people to take the inbound marketing concept and build it for an online community. Before, if people wanted to know more information about you they would ask their group of friends and family, maybe base what they knew on news reports or sales pitches. Now they use reviews, videos, blogs and social media to research, giving them far more information than they had 15 years ago.

Each product that you sell is designed around a particular audience and this audience will have certain interests.

These interests will be searched for and found online and how many people are likely to search for a product before they show some kind of interest in that subject beforehand? Why make contact with these people before their interest becomes enough to make a purchase? Doing this

makes you known to that customer and therefore you are more likely to have a sale when they do eventually decide to make a purchase.

For instance if you are selling a stereo, rather than reeling off the benefits of your particular model, write about developments within the stereo space. If people are interested in buying a stereo, they will be interested in finding out as much as possible about stereos before they make their decision. Writing about technologies and innovations within spaces will give you this knowledge In addition to this, the content that you create can present the personality of your company, which is something as important as the product today. When considering making a purchase, be this B2B or B2C people have multiple choices of products which have similar features. This means that companies are increasingly judged on their personality and other factors. A company who seem to working an inbound and transparent strategy allows the company to communicate its beliefs and values to current and potential customers. It takes a certain amount of courage to adopt, but ask Apple and the Apple store how successful it has been for them.

YULIA IVANOVA STRATEGY LEADER

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13

What’s wrong with strategic planning and how to fix it?

C

ompanies need strategy as much as ever. They also need strategic planning, but different to the traditional way of planning based on long cycles, forecasting the future and top-down analysis. What is needed is the capability to consistently identify, rapidly analyse and prioritise strategic opportunities in a changing environment.

Is strategy still relevant?

It is a brave CEO or a Board that does not spend considerable energy on strategy, be it to take advantage of emerging opportunities or to just survive. The economic turbulence continues in Europe and elsewhere.

Competition is not getting any easier and creative destruction reigns: the average tenure of a company in the S&P 500 index decreased from 61 years in 1958 to 25 years in 1980 to only 18 years in 20121 . Customer behavior keeps changing, sometimes in fundamental ways as evidenced by the recent high street retail business failures in the UK. Adding to this are new applications of digital technologies, such as social media. And for those operating in heavily regulated industries, for example in financial services, regulatory changes can render existing business models obsolete. So one can safely venture that the ride is not going to get any smoother soon.

Prospering in a turbulent environment requires strategic thinking, analysis and behavior. Relying on operational excellence or best practices is not sufficient. Indeed, continued demand for strategy consulting services, on average 25% of European consulting spend in 2000102 , provides some evidence of investment in strategic thinking. But if strategy is alive and in demand, why then was strategic planning pronounced dead already a couple of decades ago3 ?

1 Innosight (2012): Creative Destruction Whips through Corporate America. Executive Briefing 2Whittington, R. (2012), “Strategy professionals: strategic planners and strategy consultants”, in Seidl, D. and Jarzabkowski, P. (eds), Strategy as Practice: Theories, methodologies and phenomena. Henry Stewart Talks Ltd, London 3 Mintzberg, Henry (1994): The Fall and Rise of Strategic Planning. Harvard Business Review, January-February

" An answer to making strategic planning more effective is to integrate strategy (creating insights) with planning " What’s wrong with strategic planning?

To start with, there is persistent confusion about what is “Strategy” and what is “Strategic Planning”. Strategy is essentially about insights on how to differentiate and create value4. Strategic planning is about making the insights actionable. However, in practice the two concepts are often used synonymously, leading us to think of strategy as a plan. The consequence can be “me too” strategy wrapped in an elaborate execution plan. What are needed are genuine, differentiated insights.

A lot has been said about “strategy innovation” as a source of insights5 . Innovation, be it product/service, process or a business model, is important but not the full answer. Too often, innovation processes disconnected from the realities of business end up producing “pink bicycles” - innovation for innovation’s sake. Neither is deploying new (digital) technologies the cure. While most companies probably should be investing in applications of digital technology to stay in the game, merely deploying technology is not a source of differentiation. As with the Internet and “eCommerce” ten-fifteen years ago, the key is to identify and invest in the right strategic opportunities for a particular company. Some of these may be enabled by new technology, some may not 6.

Formulaic, rigid planning processes further constrain companies’ ability to create true strategic insights.

At the same time, the nature of many businesses has changed as customers are able to access information more effectively, contributing to fragmentation of markets and segments. What is needed then is the ability to rapidly identify and analyse a large number of strategic opportunities and pinpoint those where a company has an advantage. Targeting these specific opportunities enables differentiation and creates economic rents 7.

Back to basics An answer to making strategic planni-ng more effective is to integrate strategy (creating insights) with planning (making the insights actionable). What follows are a 4 Porter, Michael (1996): What is Strategy? Harvard Business Review, November-December 5 E.g. Hamel, Gary (2002): Leading the Revolution. How to Thrive in Turbulent Times

by Making Innovation a Way of Life. Harvard Business School Press, 2nd edition 6 E.g. Karjalainen, Niko (2001): Electronic Business. A Strategic View. WSOY Ekonomia, Finland 7 E.g. Viguerie, Patrick. Smit, Sven. Baghai, Mehrdad (2011): The Granularity of Growth. John Wiley & Sons

13 few high-level pointers on how do this within a broader corporate strategy framework.

Firstly, create a solid strategic analysis engine to identify, rapidly analyse and prioritise emerging and potential opportunities. To do this, strategists need to get back to basics by acknowledging that strategy itself is primarily an analytical discipline built on the foundations of microeconomics, finance, behavioural psychology and other fields. Underpinning the ability to generate truly valuable and relevant insights is hard analytical work at all stages of the process from scanning the environment in a structured way to building a solid business case for investment.

Secondly, link the analytical engine to the rest of the organization to draw on expertise from sales and marketing, operations, R&D and other functions. This is both to source the most valuable ideas and to ensure that they are assessed in a realistic way. The ultimate objective should be to disseminate the strategy skillset and the (jargon free parts) of the language of strategy throughout the organization, making strategy work part of the organization’s everyday life.

Thirdly, instill a culture of disciplined decision making

for investing in the best opportunities. This includes alignment among senior management on a strategic framework for investment, clear view on the financial objectives and the capacity to take regular investment decisions. The objective is not to drip feed money into markets to keep chasing new ideas, but to constantly and consciously question where capital is best put to use, i.e. to make strategic choices.

The recommended actions are certainly not a cure-all, but hopefully a step closer to more effective strategic planning.

About the author Niko Karjalainen is a Vice President, Head of Business Development and Strategy at American Express Foreign Exchange Services. This article is written in personal capacity and all views expressed are the author’s.

NIKO KARJALAINEN CONTRIBUTOR

strategy.theiegroup.com/cso-hongkong

Chief Strategy Officer Summit Please reach out to Lin at Lduan@theiegroup.com or call on +852 8124 1228 if you are interested in participating.

Confirmed speakers include

14

Bloomberg’s Global Head of Social Media, Robert Harles

36

months ago Bloomberg were still using what many within the organization considered to be the first ever social network. They however were not allowed access to any of the big 3 social media sites until Robert Harles arrived at the company with a new idea for how Bloomberg could not only embrace social media but also use it to build on their incredibly successful original social model.

When Robert began at the company he was not surprised that Bloomberg had not allowed their employees to have access to social media at work. This was after all a company who had built their success on a base of trust and accuracy, something that many journalists have found is hard to maintain when utilizing social media. He could understand the reasoning behind this decision as many in the company thought that this kind of access could open pandora's box.

The problem and solution that Robert found at the company was summed up brilliantly when he told me about some of his early encounters: “When I first came on board, people maybe teased me a little bit and say things like ‘how many of our clients are really on social media?’ I would think about it for half a second and I would boldly say ‘Well probably about 99.9%’ they would also say no they aren’t because a lot of institutions they work for ban use of social media during the work day. I would always dig around in my pocket and pull out my smartphone and ask ‘How many have one of these and what do you think they are doing with those?’ They are subject to a number of restrictions but in truth people are creatures of curiosity so it's unlikely that you are going to be able to stop them and plug that leaky bucket.”

“ We think about how to get out the way to deliver whats needed, but lets let our community source the direction they want to go ” He was also surprised when many employees made the remark that Bloomberg actually had the first social media network, the Terminal. The terminal is a collection of 300,000 contacts all revolving around subjects being discussed across the Bloomberg networks, it also had individual profiles and discussions. This was essentially a social network in its purest form.

Using this kind of model made the adoption of social media across the company in a broader sense easier and created a base from which to focus elsewhere. For instance Robert makes clear that last year from this network of 300,000 Bloomberg managed to create $27 Billion in revenue. By comparison Facebook made roughly half that from a network of closer to 1 billion.

This shows the importance of focussed subjects and functional conversations amongst similarly minded professionals. Bloomberg have taken this discussion mantra into other social media arenas and Robert makes the point that the point of Bloomberg is that “We don’t want to get in the way of interactions, we want to facilitate”. This is clearly the reasoning behind the original iteration of the Terminal that has brought them so much success.

15 From Robert’s experiences many companies that try to lead and dominate conversations often find that they are getting in the way of their own success as they become intimidating to others in the discussion. The reason for this is simply that many companies find it difficult to maintain the balance of commercial pressures and good conversation, when one tips too far one way the other suffers.

The approach of Bloomberg is “We think about how to get out the way to deliver whats needed, but let's let our community source the direction they want to go” The real value of social media however is something that many people have struggled to show. Is it really possible to equate the x number of tweets means x number of sales?

Robert has addressed the issues within this by not shying away from the difficult question, tackling them head on.

One of the easy ways to look at this is that connections could become relationships, relationships could then become sales. The move from initial connection through to sale could take considerable time, making it harder to measure, but of no less value to the company.

Essentially one of the main reasons that Robert thinks people have adopted social media so readily, especially within niche areas is that people want to feel like they

matter. Traditionally, before social media, this would have been done through face to face meetings but with the constraints on time and the availability of those with similar interests through the internet has been the catalyst to spread social media. Anybody can deliver a product or a service, the companies who are really making strides today are those who have managed to create a genuine community.

So why is having a strong community such a great thing for the brand?

Robert has likened modern brands to the Seurat painting, ‘Afternoon In The Park’. From far away you can see the broad brushstrokes created by the marketing and communication teams, but once you get closer in you can see all of the dots that make up the painting as a whole.

This is the same with brands, the dots are the individuals that make up what the brand represents and in modern times with the use of social media, you have access to the thoughts of these individuals.

Therefore, having a clear reasoning behind social media interaction and implementation at Bloomberg, with a team of only 1 or 2, Robert went about making Bloomberg a social brand. Going from top down on this would have made it difficult and would have also made a mass transition untenable, so instead he began to infect the company.

By this he means introducing an individual to social media then allowing the idea to spread throughout the organisation once people saw the success that this was bringing. In order to make sure that this was being done in a sustainable way and to make sure that there was solid business reasoning behind the transition, rather than going to them, Robert made people come to him. When they did this he made sure that they were giving their business cases for adopting social media. Not only did this mean that they were truly setting themselves targets, but also meant that social media was made to be a true business function rather than a nice to have.

According to Robert, Implementing a social media strategy in your organization is similar to getting a puppy, it is not something that you can pick up and put down when things get difficult.

You need to put in the time and effort and take care of it every day.

GEORGE HILL

CHIEF EDITOR

16

THE NEXT GENERATION OF STRATEGISTS – AN UNKNOWN QUANTITY? Every generation remarks on the pace of change it has to live through. But there can be little dispute that, here in the early 21st century, the confluence of the speed of technical development, the change in macro economic conditions and even the swing in the underlying cost of resources is unprecedented in recorded history. It’s consequently no surprise that the strategy profession is in a state of flux.

So where will the next generation of strategists come from and what will it look like? And will it be able to enhance the credibility of the discipline or is it destined to become a modern version of the ‘emperor’s new clothes?’

A state of flux?

Recent years have not been kind to the strategy profession.

Despite what now seems a plethora of warning signs, most practitioners, whether operating in consultancies or inhouse, appeared to be caught somewhat off-guard by the events that led to the ongoing global economic downturn.

The ever-quickening pace of technological change has overturned many of the old presumptions and certainties, leaving apparent confusion in their wake. And a number of cynical voices have questioned why, despite their

"If there has been one clear result of the process that began with the collapse of Lehman Brothers in 2008 it is the need to deliver" inferred ability to predict the future, some strategy firms appear to have fallen into a counter-cyclical approach to recruitment, often out of step with the rise and fall of market demand. For them the phrase ‘Physician, heal thyself’ springs all too readily to mind.

As a relatively new discipline in the world of business, dating back, at least in its current form, not much further than the 1940s, can strategy really afford this undermining of its credibility? Perhaps the time has come to examine what skills and capabilities the next generation of strategists will need to recover the profession’s hard-won reputation and how these attributes can be accessed or developed.

The imperative to deliver If there has been one clear result of the process that began with the collapse of Lehman Brothers in 2008 it is the need to deliver. Whether in-house department or external consultancy, the days of blue sky thinking in isolation are over, at least for a while (perhaps most likely, at least until market confidence recovers and memories of the bad times fade). The emphasis is shifting from the loose, the conceptual, the academic to action-oriented strategic planning, to forecasting rooted in harsh realities, to close alignment with business development and human resources requirements. For internal teams, in particular, there is a clear necessity to understand and comply with what the business is actually seeking to achieve and then providing the guidance and the tools which will allow it to do so.

But do your people have the right experience, the right skills, the right mind-set to fit into this new normal? Or are they hampered by the legacy of the past?

A leaking pipeline The traditional talent pipelines of the strategy sector are under threat. While the latest reports from GMAC (the Graduate Management Admission Council), the MBA Career Services Council and major schools such as Harvard suggest that demand for talent is increasing, there is evidence that a growing number of ‘usual suspects’ are turning their backs on strategy consultancy. The recent Universum survey of top b-school students

17 in the US found three strategy firms in the top 10 most desired employer list. But instead of dominating the ranking as they traditionally have done, they now face increasingly stiff competition from new-tech companies such as Amazon, Apple, Facebook and Google, the last now firmly ensconced in the poll’s number one slot. An ever growing number of high achievers are also turning their backs on traditional post-graduate roles in order to set up their own businesses – entrepreneurship, it seems is, once again, the new rock and roll. And many of the brightest and best coming to the West from emerging markets to study are not staying on to swell the ranks of consultancies, but are heading home at the earliest opportunity to cash in on the potential of the BRICS and the N-11. As Jack Oakes of the careers department at University of Virginia’s Darden School puts it, “They used to tell people to go west in search of opportunity. Today we add that they shouldn’t stop in California.”

Ostensibly this looks like a major problem. If strategy consultancies cannot source enough new blood, where will the next wave of in-house strategists come from? But if in-house departments are having to re-shape to provide their employers with a new set of more concrete services, perhaps this could be a blessing in disguise. Perhaps it may

"Can strategy really afford this undermining of its credibility?"

turn a worry that traditional recruits might not be a complete solution to future challenges into an active search for new sources of talent.

When one door closes....

Many senior HR thinkers and practitioners are advocating and now implementing lateral approaches to recruitment and retention, sourcing talent on the basis of its agility, flexibility and open-mindedness. To revive a very well worn phrase, they are thinking well outside the standard recruitment box. Telefónica UK, for example, the owner of one of the UK’s leading cell phone brands – O2, has instituted a ‘People for the Future’ program, which aims to provide the human resources component of its diversification strategy, enabling it to source people from non-traditional industries and disciplines such as healthcare and financial services. As its HR director, Anne Pickering says, “We’re moving from a traditional mobile world into a world that’s dramatically different. I’ve got to try and be one step ahead of the curve.”

At the Barton Partnership we’re now detecting a growing feeling amongst the in-house departments and consulting firms we deal with that the strategy profession may also need to embrace this sort of approach in terms of its talent acquisition and development.

Engaging with the new wave It seems likely that the talent which will make up the best in-house strategy departments of the future may not be found in conventional hunting grounds.

As suggested earlier, a significant proportion of the best and brightest are eschewing careers in strategy consul-

18 tancy in favour of analytical or even line management roles in the corporate world or a bid to start their own enterprises. A recent article in the Financial Times, for example, stated that, whereas in the past up to a third of graduates of top schools took up roles in consultancy, now nearly half of this elite group are finding their first job in other sectors, notably consumer goods, technology, media or pharmaceuticals. Yet their combination of intellectual muscle, ‘real world’ experience and focus on delivery may make them ideal candidates for at least some positions in delivery-focused in-house strategy teams. Which means that the business of reaching out to include them in talent pools and pipelines needs to commence sooner rather than later, either on a direct basis, if resources allow, or through partnership with an external recruitment specialist. The old practice of tapping into the alumni associations of consulting firms may no longer be sufficient The same need for engagement also applies to another key group that has diverted from the traditional strategy career path.

In the UK, in particular we are seeing an increasing number of very able strategy professionals moving out of conventional large consultancies to work in smaller firms or, crucially, for themselves on an interim basis, often under some form of ‘virtual consultancy’ umbrella. While many of these individuals may have made such a move for lifestyle reasons, a significant proportion see it as a transition phase where they can build up a wide range of experience with a view to entering the corporate arena. And while this form of working may not be perfect by any means – some critics, for example, suggest that its practitioners estrangement from the ‘intellectual hot-house’ of a large

firm environment restricts their ongoing development – it does encourage the focus on delivery and practicality that has come so much into vogue as the downturn drags on.

However accessing and engaging with these new groups of potential recruits will not be the only challenge.

Qualifying them may also prove difficult as conventional signifiers such as ‘consultant’ or ‘manager’ are unlikely to provide all the necessary information for hiring decisions. Those at the coal face of recruitment, both in-house and within strategy consultancies will need to combine open-mindedness with a key eye for the substance behind the style.

When? Where? Who? ‘Strategic workforce planning’ – the alignment of the people agenda with a business’s core commercial strategy is the key focus of HR professionals at the moment. And its simple, yet often neglected principles, could prove of real value for heads of strategy looking to build teams that are at least partially future-proof.

So consider asking yourself the following questions: 1) Exactly what is your parent business expecting you to deliver and what sort of people will be able to fulfil this?

2) Where are they likely to be working now and in the foreseeable future? Do you have the contacts, expertise and resources to engage with them there?

3) What are they expecting from their career progression and how well geared up are you to satisfy their goals?

4) How compelling are your employer brand and proposition and how do they match up to those of your peers and competitors?

5) Given that strategy, perhaps more than any other key discipline, is a breeding ground for future leaders and visionaries, how much more imaginative does your talent acquisition strategy need to be than those employed in less ambitious and demanding areas?

About POVs Barton Partnership POVs are designed to raise and provoke debate on key human resource issues affecting the strategy arena.

For more information on, or to discuss any of the aspects raised in, this opinion piece, please contact Nicholas Barton of The Barton Partnership – www.thebartonpartnership.com Telephone: +44 (0)20 7138 3598 Email: nicholas.barton@thebartonpartnership.com

NICHOLAS BARTON CONTRIBUTOR

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