Chapter 3: Match Strategy to Situation

Overview

When Claire Weeks stepped into her new role as head of the industrial products division of a large multinational company, she believed the division had enough strength to continue to achieve double-digit earnings growth. Growth had been strong over the past four years , and the division had several promising products in the pipeline. Based on her early assessments, Claire committed herself to achieving the ambitious goals laid out in her predecessor s plan.

Claire soon discovered the situation was less rosy. The division s stellar past performance masked structural problems with pricing, inventories, and strained distributor relationships. It seemed that her predecessor had been mortgaging the division s future to make himself look good.

Although not mortal threats, these problems made it difficult for Claire to meet her targets. Rather than go to the CEO, explain the problems, and take the hit, however, she elected to push forward. She believed that she could eke out enough growth through price increases and acquisitions to keep results on track until a key new product was launched.

Struggling to achieve the goals she had committed herself to, Claire made a series of avoidable missteps that eroded her credibility. She alienated the company s distributors by forcing through price increases. She made a couple of bad calls trying to speed up critical new-product launches. As it became obvious that she would not meet her targets through organic growth, she tried and failed to make a significant acquisition. Claire s problems flowed from a mistaken diagnosis of the situation. Believing that she was in a sustaining -success situation, she signed on to overly ambitious growth targets. In reality, the company was in need of a significant realignment. Rather than confront the need for realignment and reset expectations, Claire became a victim of her own shortsightedness. She resigned when it became clear the CEO had lost confidence in her ability to lead the division.

Far too many new leaders like Claire Weeks do a poor job of diagnosing their situations and tailoring their strategies accordingly . Then, because they misunderstand the situation, they make unnecessary mistakes like Claire s commitment to unachievable earnings goals. This painful scenario continues to recur because people typically model their own transitions on a limited set of experiences.

If you re like Claire, you ve learned to make transitions the hard way. You ve made mistakes along the way, and you ve learned from them. If you re fortunate, bosses, mentors, and advisers have shared their hard-won experience with you. Over time you ve probably fixed on some must do s and do not do s. It is worth being clear about them up front, so you can evaluate which hold up in your new situation and which do not. Consider taking some time to summarize your own rules of thumb for making a successful transition before you read further.

Now step back and assess how robust and actionable these insights are. Your recent move suggests that your approach has worked well up to this point, but it won t necessarily continue to work if you are moving to a different level or entering an unfamiliar business situation. Even if you have had broad exposure to managerial disciplines (marketing, operations, R&D, finance), your experience with different types of business situations (start-up, turnaround , realignment, and sustaining success) may still be narrow.

By methodically diagnosing the situation, Claire Weeks could have avoided her problems. Matching your strategy to your situation requires careful diagnosis of the business situation. Only then can you be clearheaded, not just about the challenges, but also about the opportunities and resources available to you.