The Role of the Internal versus the External Strategist

Can an external strategist be an asset to an established corporate strategic planning team? There is clearly no substitute for the value provided by the internal strategist and the homegrown planning processes that fits the organization like an old well-worn baseball glove. But can this value be enhanced by an outsider’s involvement?

Enter the external strategist, stage right. There is a perceptible but unspoken tension that exists when external consultants enter the picture in an organization. This can be especially true when the consultant is a strategist. The questions begin to percolate, more and more rapidly.

• “What do they know about our business?”
• “Will they be able to understand our organization well enough to help us?”
• “What can this “consultant” offer that we cannot do better ourselves?”
• “Will they make things worse because they don’t understand our culture and how things work around here? “

The Internal Strategist

Would anyone argue the importance of an organization’s strategy being developed from within, by the leaders and managers of the organization that know and understand it best? It is a tough statement to rebuke, even by the most skilled debaters among us. After all, doesn’t the vision of the organization stem from the leader’s own perception of the future-state that the strategies will lead them to achieve? Subscribing to this perspective would then logically lead us to the conclusion that strategy must be developed internally - completely owned and developed by the internal strategy gurus that have unmatched knowledge of the organizational intricacies required to plan and implement successfully.

Strengths

Internal strategist certainly have a much stronger organization operational familiarity and understanding. Likewise, a good internal strategist, theoretically speaking, should be capable of crafting a strategy with well-aligned operational plans that:

• are based on the organization’s true abilities to deliver
• optimized for the company’s politics
• leverage organizational core competencies
• take into account culture, increasing the likelihood of adoption

Advantages

Apart from the knowledge afforded by the internal strategist’s “insider” perspective, there are also some intangible “advantages” we might award to this group of folks. Wouldn’t the internal strategy leader be considered to have more skin in the game than an outside consultant? With careers and their livelihood at risk if they are not competent in their jobs and produce results, the internal strategist has some serious skin in the game to motivate them along the way.

But wait, is there more to this that we should consider? Assuming there are multiple individuals involved internally in the planning process already, could the organization benefit from an outside firm’s knowledge of corporate strategy, planning process and their battle scars?

Looking at the opposite point of view: The case for getting outside help

We should begin this analysis by making the disclaimer that not all external strategists are created equal. Care must be taken in selecting the right consulting firm (for more information on how to select a consultant, see the article "Why You Should Not Hire a Management Consulting Firm...at least not yet ".

Now let’s evaluate each of the points above in consideration of value-adds that an external strategist can bring to the organization’s planning effort.

1. The internal strategist is more capable of creating plans that are based on the organization’s true abilities to deliver.

The notion that only an internal planning resource can accurately gauge organizational execution capability is one that falls into the category of a misnomer. Many techniques are available to help in this area (also available to internal strategists that know of them). These approaches can be applied by an external strategist quite effectively and actually improve upon the accuracy of plan development that matches an organization’s ability to follow-through and execute the plan. We call this technique measuring “historic acceleration”.

The American Heritage® Science Dictionary defines acceleration as “The rate of change of the velocity of a moving body.” In corporate planning, actions or decisions taken by the organization can lead to positive acceleration (increase in speed) or negative acceleration (a decrease in speed). Knowing how the business will respond and being able to establish realistic time frames for any strategic initiative is critical and therefore a valuable part of the strategic planning process.



Why is acceleration important to corporate strategic planning?

Think back to a time when your organization planned to launch a new department, technology solution, internal reorganization, or product. The intent was to launch the initiative in three months, but it ends up taking nine. Another project you anticipate to take six months is finished in just four. Measuring historical acceleration provides a way to reduce the uncertainty, remove subjectivity, and bring greater predictability to planning initiatives so that realistic expectations can be set and accomplished.

Historical acceleration is an important value to measure when planning, since it is a key indicator of organizational reality and provides a predictive measure for the future. Historical acceleration is the typical rate of change (accomplishment of objectives) for the organization - moving from idea generation through implementation.

When historical acceleration is brought into the planning process, the planning team can take into account both the speed at which the organization accomplishes tasks and the desired direction of the organization. After all, how fast the organization can reach a specified objective is always affected by how far it has to go to get there. Simple metrics can be used to determine average historical acceleration and the resulting numbers can be used to design execution plans that are achievable and predictable.

That said, the usage of techniques like historical acceleration help level the playing field for the external strategist, accomplished through the reduction of uncertainty in execution by attenuating the organization’s true ability to execute to the plan development (e.g. realistic timeframes for plan outcomes). In this case, a more scientific approach can actually increase the plan’s validity by stripping away any bias or emotion. You can read more about historical acceleration in a recent article, "The Role of Acceleration in Corporate Strategic Planning".

2. The internal strategist is more capable of creating plans that are optimized for the company’s politics.

Politics can definitely creep into strategic planning, impacting strategy development and execution of plan goals. One of the key areas politics comes into play is with priority setting. The question is: Without outside objectivity, how does the internal strategist overcome politics and determine the right priorities? And in the face of competing corporate agendas, how do you justify your choices? Both prioritization and justification are important steps in an effective corporate planning process and both benefit equally from the involvement of the external strategist.

So much has been written about the importance of setting priorities. Whether in time management or corporate strategic planning, the point remains: we must know our priorities and focus on the projects and opportunities that represent our highest priorities. Weighty strategic decisions can be made easier with the help of a non-biased external strategist, performing a decision “triage” to help structure the cognitive process we must complete during the strategy development.

In a recent article we explored the concept of Opportunity Valuation and Prioritization and explored real techniques that can be applied to separate requirements from “desirements” in the business world - both fairly and consistently. These are the tools of the external strategist that help the strategy process get above the political fray.

Whether it is accomplished with outside help or not, an objective planning process must remove politics from the equation and focus the organization’s resources and energy on the best opportunities - setting the others aside entirely or placing them into the backlog for consideration in the next cycle. The reality of organizational politics is sad, but true. A 3rd-party can take the unpopular position if need be, standing up for the integrity of a process that promotes rational decision making.

3. The internal strategist is more capable of creating plans that leverage organizational core competencies.

Core competencies are the underpinnings of an organization’s skills and the cornerstone of successful strategic execution. They are also routinely misidentified, over estimated or misjudged by leadership and management within the organization who are simply too familiar and too close to the situation to be objective.

Those with years of experience in strategic planning and the battle scars to prove it know all to well that core competencies represent the fundamental knowledge, abilities, and expertise of an organization. Core competencies are what make individuals and organizations unique. Furthermore, the ability to understand and measure organizational core competencies is a critical factor in reaching your desired goals. That is where having outside help to gain objectivity and provide a fresh approach, once again, can add considerable value to the strategic planning process.

Outside objectivity, coupled with refined process tools can help uncover the essential skills and attributes the organization requires in order to accomplish strategic outcomes - including the necessary skills and attributes for leaders, managers, and staff. This analysis goes into areas most internal strategist would not concern themselves with, drilling down into job-level competencies and determining how far off the organization is from possessing the necessary competencies. The transfer of knowledge from the external to the internal strategist related to core competency analysis will provide the organization’s planning team a framework to leverage moving forward. Furthermore, the external strategist develops sub-strategies to mitigate competency shortcomings, including analysis of learning & development initiatives, hiring practices and job assignment changes.

An organization’s core competencies rest in the people who will put their knowledge, abilities, and expertise to work. If leaders of the organization fail to understand how current core competencies relate to the organization’s future goals, strategic and operational plans may be seriously flawed. Only with a deep understanding of the competencies required to accomplish strategic goals can the organization implement successfully.

An objective and experienced external strategist can guide the planning process through an alignment of core competencies with strategic goals and transition this knowledge to the internal strategist - avoiding failure points later on during execution and permanently enhancing the planning process for the future.

4. The internal strategist is more capable of creating plans that take into account culture, increasing the likelihood of adoption.

It is well accepted among organizational theorists that companies with strong cultures and well devised communications plans outperform those without such ingredients. As such, both areas are vital components to strategic and operational planning and will benefit the organization’s efforts when done properly. Unfortunately, most internal strategy groups lack the multidisciplinary and culture-based approach to plan effectively for culture and communication throughout the organization and the business eco-system.

Communication

Just as organizations are diverse, communications approaches must be equally diverse and adaptable. Effectively spreading the enterprise vision throughout the ranks of the organization empowers and energizes employees to contribute to the successful execution of the strategic goals.Plainly said, it is irresponsible for an organization to go about planning activities without the appropriate communications approaches in place. External strategists are trained to look holistically at the organizational environment and pinpoint communication gaps, highlight areas of improvement within the organization, and baseline the organization’s true strengths, weaknesses, opportunities, and threats.

Culture

Clearly, culture is also a critical component to the organization that, if not properly understood, can dramatically impact the design and ultimately the execution of plans. Culture is the foundation of “how” the organization works and “how” work will be completed on the plan in which the organization will realize its desired outcomes.

Cultural consideration in planning aids in understanding of how the organization executes to its plans and supporting objectives within the existing environment so that operational plans may be improved upon. An external strategist considers organizational structure, behaviors, and relationship interactions. Through this cultural assessment the external strategist will begin to hear the voice of the organization: understanding how members of the organization behave, react, and perform. This analysis helps determine the most beneficial communications and planning frameworks, aligning with the culture of the organization, to give the organization its best chance to meet and exceed its desired goals.

By leveraging the experience of an external strategist, the internal strategist can be assured that communication approaches will target the right people with the right message at the right times. With the knowledge and experience brought by the external strategist, the organization’s planning will also be better aligned with culture and the business leaders will have a powerful way to harness the potential of their resources to dominate within their marketplace.

5. The internal strategist has more skin in the game than an outside consultant.

Saying that one has “skin in the game” is another way of indicating that someone cares or has deep connections to something. External consultants, just as their internal counterparts, have careers, reputations and identities wrapped up in creating value and achieving success. Their job is to help clients, mentor and transition knowledge. By default, that is skin in the game.

Additionally, reputable strategy firms screen potential employees with much scrutiny before hiring them in the first place, let alone deploying them in a client environment. Screening looks deep into the character of the consultant candidate and weeds out those that lack the passion, commitment and experience needed to help clients and always add value.

Two heads are better than one

The old adage, “two heads are better than one” is true. Even if the internal corporate planning team has many participants involved, organizations can fall victim to “group think” and can take on the semblance of “one head”. This happens when organizations stagnate on ideas, starved from an outside influx of fresh perspectives. In such circumstances, internal strategy groups delude themselves into believing the strategy they have developed cannot be improved upon, failing to see the flaws and omissions that will lead to failure when they move into execution mode.

An internal strategist working with a carefully chosen external strategist sets the stage for success. This is an approach that can leverage the best of both and produce far better results. As such, chemistry and trust are essential for great collaboration among internal and external strategists. Understanding of each others' strengths, unique expertise, values and approach help both strategists grow in their discipline. This coupling leads to successful outcomes in strategy implementation.

The best result is neither the internal strategist nor the external strategist. The best strategic planning solution to use both valuable resources in tandem.

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