Developing Strategy Habits
The result of practicing a behavior over and over can be the formation of a habit. A habit is defined as, “a behavior pattern acquired by frequent repetition or physiologic exposure that shows itself in regularity or increased facility of performance; an acquired mode of behavior that has become nearly or completely involuntary.”53 Depending on the behavior, the habit can be positive (e.g., exercising each morning) or negative (e.g., uncontrolled gambling). The goal is to foster positive habits and transform negative habits into positive ones. As anyone who has tried to break a bad habit knows, it’s much easier said than done.
Researchers at the Massachusetts Institute of Technology have shed light onto the science behind habits.54 A habit consists of the following three components:
- 1. Cue (trigger)
- 2. Routine (behavior)
- 3. Reward (result)
This neurological loop is at the core of our habits, both good and bad. The cue for a positive habit like exercising in the morning might be your dog waking you up at 6 a.m. with a lick on the hand. The routine would be jogging along the lake, and the reward is an ice-cold, chocolate protein shake. The cue for a detrimental habit like uncontrolled gambling might be boredom. The routine would be going to a
Figure 3.3 Fire Drill Habit
tavern and playing video poker, and the reward is the excitement (or lack of boredom) that comes from winning or from the near misses of almost winning. All habits follow this route of cue, routine, and reward. We can use this habit model to improve our approach to strategy by creating good habits and eliminating negative ones.
One of the most debilitating habits in business is the fire drill. The fire drill is when people stop purposeful work that is guided by their strategic plan and rush to take care of something urgent that just popped up. If the urgent issue is also important, then naturally it should be taken care of. Unfortunately, many fires are urgent but unimportant. Yet, they still get lots of attention, which wastes valuable time, people, and budget. The fire drill habit is represented in Figure 3.3.
The key to eliminating a bad habit is to replace the routine, or behavior, with a more positive or productive one. By keeping the same cue and same reward, this shift in the routine can transform the bad habit into a good one.55 In the fire drill example, it’s to be expected that fires will continue to pop up during the course of business, even if some can be prevented by understanding the root causes in their systems. When the cue or fire triggers the habit, we need to replace the current routine—a flurry of unplanned activity—with a new one.
Figure 3.4 Modifying the Fire Drill Habit
A phrase as simple as “Let’s think about that,” can fill the routine. This phrase reminds people not to just react to the fire, but to consider it relative to the other planned initiatives currently being worked on. Do we really need to attend to this? Does this fall within our responsibilities? Who can handle this more efficiently? How did this fire start in the first place? Figure 3.4 shows the new habit.
We can also proactively build positive business habits using this same technique. Let’s say you have a situation where your frontline managers are tactical, but not strategic. So, you’d like to develop their strategic thinking skills into a behavior that becomes a positive habit. The cue would be a business challenge, such as new competitor activities within their market. The current routine consists of managers working in the weeds of the business and only offering up tactics. The result is revenue, but only enough to survive (Figure 3.5).
To modify this habit, you’d replace the current tactical routine with development of strategic thinking skills using the three basic disciplines to: identify the insight (acumen), focus resources through trade-offs (allocation), and effectively execute the strategy (action).
Figure 3.5 Tactical Habit
Figure 3.6 Strategic Thinking Habit
The result is outperforming the competitor and increasing profits significantly for the organization. We can represent this new habit using the cue-routine-reward framework in Figure 3.6.
A nearly universal business habit that can be enhanced in many cases is strategic planning. For many organizations, the cue for this
Figure 3.7 Annual Strategic Planning Habit
behavior is the calendar. As the calendar hits October or November, it triggers the routine or behavior of strategic planning. The more seasoned, or cynical, manager might describe the routine as filling out a bunch of templates that create a huge PowerPoint slide deck. The reward is a sense of accomplishment, or relief, and a tangible plan. The habit is represented in Figure 3.7.
However, with just a few adjustments, the strategic planning process can be made much more productive and relevant. The first adjustment keeps the same cue (calendar), but instead of an annual trigger, it becomes monthly. The monthly cue triggers a new routine consisting of a half-day strategic thinking session to accumulate new insights and review existing goals, objectives, strategies, tactics, and metrics, and make the appropriate modifications. The result is a real-time strategic action plan that is highly relevant, drives people’s daily activities, and instills greater confidence in the strategic direction. The new habit is illustrated in Figure 3.8.
The following 10 questions can improve your team’s strategy habits: 1
- 1. What is the top strategy habit you’d like to change for the group?
- 2. What is the cue, routine, and reward?
Figure 3.8 Monthly Strategy Assessment Habit
- 3. What new routine could you substitute to transform the habit?
- 4. What is the top strategy habit you’d like to change for yourself?
- 5. What is the cue, routine, and reward?
- 6. What new routine could you substitute to transform the habit?
- 7. What new habit would you like to create?
- 8. What would comprise the cue, routine, and reward?
- 9. What resource allocation changes would need to occur to create this habit?
- 10. What cultural or organizational changes would need to occur to ensure the habit lasts?