(continued on back fl ap)

(continued from front fl ap)

4-COLOR GLOSSY

$29.95 USA/$35.95 CAN

THE WAY YOU DO STRATEGY

CAN MAKE YOUR ORGANIZATION

SMARTER THAN YOUR COMPETITION!

In today’s dynamic marketplace, traditional strategic planning methods no longer work. The

key challenge facing managers is to build adaptive organizations able to assess the shifting environ-ment and rapidly translate insights into winning strategies over and over again. “Strategy as a plan-ning exercise” must become “strategy as a learning exercise.” Excelling at this capability is an organiza-tion’s only sustainable competitive advantage.

Willie Pietersen’s Strategic Learning process gives you a practical and proven method for turning key insights about your market, customers, and com-petitors into action. Since Pietersen fi rst defi ned them in Reinventing Strategy, the concepts and tools of Strategic Learning have been battle-tested in the harshest economy in a genera-tion, helping to reinvigorate a wide range of corporations and not-for-profi t organizations. The strategic learning process also forms the basis for how strategy is taught in Columbia Business School’s Executive Education programs.

Strategic Learning presents Pietersen’s unique “in-sight to action” model. Using this cycle of four linked steps—Learn, Focus, Align, and Execute—your organization will continuously learn from its environment and its own actions, adjust its strat-egies to fi t the competitive landscape, and consis-tently outthink and outperform your competition. You’ll navigate through crises while building the organizational readiness to identify the next chal-lenge, the resilience to withstand it, and the ability to profi t from it.

Filled with examples showing real-world applications of its principles, Strategic Learning will redefi ne how you approach strategy. Coming from one of

ISBN: 978-0-470-54069-5

the best minds in business, this far-reaching set of ideas equips managers at all levels to lead the way to lasting competitive advantage.

WILLIE PIETERSEN was raised in South Africa and received a Rhodes Scholarship to Oxford University. After practicing law, he embarked on an international business career, serving as the CEO of multibillion-dollar businesses such

as Lever Foods, Seagram USA, Tropicana, and Sterling Winthrop’s Consumer Health Group. Since 1998, Pietersen has been Professor of the Practice of Management at the Columbia University Business School. He has served as teacher and advisor to many global companies, including Boeing, Deloitte, DePuy, Ericsson, ExxonMobil, Novartis, SAP, and the Girl Scouts of the USA. He is the author of Reinventing Strategy, which is widely used by organizations as a guide to the creation of winning strategies, and has been translated into Spanish and Chinese.

For more information about the application of Strategic Learning, visit www.williampietersen.com.

Author Photograph: © Denise Winters Photography

STRATEGIC LEARNING

H O W T O B E S M A R T E R

T H A N Y O U R C O M P E T I T I O N

A N D T U R N K E Y I N S I G H T S

I N T O C O M P E T I T I V E

A D VA N T A G E

W I L L I E PI E T E R S E N

PIETERSENSTRATEGIC LEARNING

Praise for

STRATEGIC LEARNING

“Strategic Learning has become a vital element of how we think about the future in Ericsson. The wisdom of Willie Pietersen’s approach to strategy has helped us move from planning rituals to strategy as learning, and has made a big difference to the way we work.” —Hans Vestberg, President and CEO, Ericsson

“Strategic Learning is the best method I’ve ever found for creating winning strategies.”—Michael Mahoney, Company Group Chairman, Johnson & Johnson

“Pietersen’s focus on creating highly adaptive and dynamic strategy is essential for our turbulent times. His Strategic Learning process forces companies to confront dif-fi cult truths presented by the marketplace and helps them thrive amid uncertainty.”

—Jill Spencer, Executive Vice President, Federal Home Loan Bank of Atlanta

“Strategic Learning and Willie Pietersen have had an amazing impact on the Girl Scouts, helping us create a transformational strategy to bring relevance to a ninety-seven-year-old organization. We are confi dent that we are now focusing on the few things that are making the biggest difference.”

—Kathy Cloninger, Chief Executive Offi cer, Girl Scouts of the USA

“Willie Pietersen’s deep insights about strategy and leadership have helped our commercial and medical leaders understand how we can move from merely doing strategy to excelling at it.”

—David Epstein, President and CEO, Novartis Oncology, Novartis Molecular Diagnostics

E1FFIRS 02/02/2010 12:28:39 Page 2

E1FFIRS 02/02/2010 12:28:39 Page 1

!

!

E1FFIRS 02/02/2010 12:28:39 Page 2

E1FFIRS 02/02/2010 12:28:39 Page 3

!

!

John Wiley & Sons, Inc.

E1FFIRS 02/02/2010 12:28:40 Page 4

Copyright# 2010 by William G. Pietersen. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted

in any form or by any means, electronic, mechanical, photocopying, recording, scanning,

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respect to the accuracy or completeness of the contents of this book, and specifically

disclaim any implied warranties of merchantability or fitness for a particular purpose. No

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The advice and strategies contained herein may not be suitable for your situation. You

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For general information on our other products and services or for technical support,

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Wiley products, visit our web site at www.wiley.com.

Library of Congress Cataloging-in-Publication Data:

Pietersen, Willie.

Strategic learning : how to be smarter than your competition and

turn key insights into competitive advantage / by Willie Pietersen.

p. cm.

Includes index.

ISBN 978-0-470-54069-5 (cloth)

1. Organizational learning. 2. Strategic planning. 3. Leadership.

4. Knowledge management. I. Title.

HD58.82.P533 2010

658.4 0038—dc22 2009042890

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

E1FTOC 02/02/2010 18:42:48 Page 5

CONTENTS

ACKNOWLEDGMENTS XI

INTRODUCTION XIII

The New Competitive Context xiv

Winning in the New Environment xvi

Reinventing Strategy with Strategic Learning xvi

Why This Book? xviii

Getting to Excelling xix

PART I WHAT EVERY ORGANIZATION NEEDS TO KNOW

ABOUT STRATEGY 1

CHAPTER 1

The Real Job of Strategy 3

What Is Strategy? 5

What Key Questions Must Strategy Answer for Us? 6

Choice-Making in Action 8

Strategy and Planning Are Different 12

Closing the Doing/Excelling Gap 14

CHAPTER 2

Defining Competitive Advantage: How Much More Value

Do You Deliver Than Your Competitors? 15

Mind the Gap 16

v

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Stretching the Elastic Band 18

GM’s Race to the Bottom 21

Value Leadership through a Winning Proposition 24

What’s Your Winning Proposition? 26

The Moment of Truth 27

PART II APPLYING STRATEGIC LEARNING TO CREATE AN

ADAPTIVE ENTERPRISE 31

CHAPTER 3

Strategic Learning: Four Key Steps, One Cycle 33

Do You Have a Robust Method? 34

What Were We Thinking? 35

The Theory of Natural Selection 37

Complexity Theory 39

Learning Organizations 39

Strategy’s New Mission 40

The Five Killer Competencies 40

The Strategic Learning Cycle 41

What We’ve Learned from Deming 42

Building Capability through Deliberate Practice 43

CHAPTER 4

Learn: Using a Situation Analysis to Generate Superior

Insights about Your External Environment and Your

Own Realities 47

The ‘‘Sense and Respond’’ Imperative 48

Learning through the Situation Analysis 49

Analyzing Customer Needs 51

Who Are Our Stakeholders and Why Do They Matter? 59

Analyzing Competitors 63

Interpreting Industry Dynamics 66

Taking a Broader View 68

Facing Your Own Realities 69

vi CONTENTS

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Pulling Together the Situation Analysis 73

Winning the Battle for Insights 75

Doing a Great Situation Analysis: The Rules of Success 78

CHAPTER 5

Focus: Clarifying Your Winning Proposition and Identifying

Your Key Priorities 81

Making Your Strategic Choices 81

The Parmenides Fallacy 83

Value Proposition versus Winning Proposition 87

Where Does Your Vision Fit In? 90

Delivering Superior Profits 90

The Three Bottom Lines 93

Your Key Priorities 95

How the Girl Scouts Did It 99

Deciding What Not to Do 103

CHAPTER 6

Align: Mobilizing Your Entire Organization behind Your Strategy 109

Leading a Journey 110

The Golden Rules of Successful Execution 112

Closing the Gaps 113

The Business Ecosystem 119

Changing an Organization’s Culture 125

Avoiding the Values Trap 131

CHAPTER 7

Overcoming Resistance to Change and Driving Momentum 135

Dealing with the Sources of Resistance 137

The Lessons of the Sigmoid Curve 138

The Curse of Success 139

Launching the Second Curve 142

Maximize Participation 146

Generate Short-Term Wins 149

Deal Directly with Resisters 150

Set a Shining Example 154

Contents vii

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CHAPTER 8

Translating Your Strategy into a Compelling Leadership

Message 157

What Is Leadership? 160

Building a Cathedral 161

Commander’s Intent 162

Who Are the Leaders? 163

Developing Your Leadership Message 165

The Power of Storytelling 167

The Need for Repetition 169

CHAPTER 9

Execute: Implementing and Experimenting in the Strategic

Learning Cycle 171

Learning through Experimentation 172

Learning from Others 174

Learning from Mistakes 175

Experiential Learning: The After-Action Review 176

Strategic Learning 365 Days a Year 179

PART III INTEGRATING STRATEGY AND LEADERSHIP 181

CHAPTER 10

Leading through a Crisis 183

Dealing Successfully with the Unexpected 184

Learning Your Way Out of a Crisis 186

Building Readiness 188

Seizing Opportunities during a Crisis 190

The Human Dimension 191

CHAPTER 11

Becoming an Integrated Leader 195

The Three Domains of Leadership 196

Articulating Your Leadership Credo 199

The Quest for Self-Knowledge 201

The Lifeline Exercise 202

Applying Strategic Learning to Yourself 206

viii CONTENTS

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CONCLUSION

The 5 Cs: Choices, Clarity, Change, Courage, and Compassion 211

The Five Cs 213

APPENDIX 217

NOTES 219

INDEX 225

Contents ix

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ACKNOWLEDGMENTS

R esponsibility for the content and ideas in this book is entirely

my own. However, I could not have written it without the dedi-

cated and enthusiastic help from a great ‘‘supporting cast.’’

First of all, my thanks to Catherine Fredman for her expertise in

helping me refine and polish the manuscript; for reminding me along

the way about the importance of examples and stories; for her will-

ingness to challenge me in the interests of providing clarity; and for

bringing her keen professional eye to the organization and structure

of the book.

Credit goes to my two accomplished reviewers, Jeff Kuhn and

Karl Weber. Jeff and I often work together on Strategic Learning

workshops, and both Jeff and Karl helped me on my first book,

Reinventing Strategy. The two of them provided what I value

most—thoughtful and unvarnished feedback—and the book is un-

doubtedly better for it.

Amy Deiner from Columbia Business School has been my tire-

less researcher. Amy attended diligently to the business of fact-

checking and locating source reference material, and she brought a

discerning intelligence to this important assignment. Thank you,

Amy.

Thank you Karen Fisk for bringing an eagle-eye, and great sensi-

bility to the exacting task of proofreading.

xi

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I owe a debt of gratitude to my literary agent, Judith Ehrlich. As

she did on my first book, Judith caringly and methodically helped me

navigate through all the contractual aspects.

Richard Narramore, senior editor at John Wiley & Sons, Inc.,

provided just the right blend of constructive guidance and creative

freedom, and he did so with unfailing courtesy. Richard, production

editor Lauren Freestone, and all the members of the Wiley team

have been a pleasure to work with.

Finally, I’d like to say a special thank you to my executive assist-

ant, Aimee Chu, for her hard work, loyalty, and dedication. It was

Aimee’s often thankless task to ensure that the manuscript was cor-

rectly formatted and to keep track of the various iterations of the

text so that everything was efficiently organized. Aimee patiently

took care of the hassles so that I could concentrate on the writing.

xii ACKNOWLEDGMENTS

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INTRODUCTION

The difficulty lies not in new ideas, but escaping the old

ones, which penetrate every corner of our minds.—JOHN MAYNARD KEYNES

N o industry is immune from continuous change. Name any prod-

uct or service and I’ll guarantee that if it had a long lifespan,

that lifespan is getting shorter. If it had a short lifespan, it is even

more compressed. No barrier to competition remains safe.

The Army War College in Carlisle, Pennsylvania, often called

‘‘the school for generals,’’ has coined an acronym for an environ-

ment in flux: VUCA, for volatile, uncertain, complex, and ambigu-

ous. The term also applies to today’s business landscape. It’s not

only that the specific cyclical and structural elements of today’s

environment are different, but that they are more volatile, uncertain,

complex, and ambiguous than ever before.

Beyond the shock to the system of the recent financial crisis and

deep recession that followed—foreseen by hardly anyone—there

are deep, ongoing mutations that are revolutionizing the way busi-

ness is done. The list of changes is a familiar one: profound demo-

graphic shifts; the Asian economic advancement; the development

xiii

E1FLAST02 02/02/2010 12:39:26 Page 14

of resource nationalism; the growing influence of nongovernment

organizations (NGOs), and regulatory changes in banking, energy,

healthcare, and food safety. The list goes on. Abetting all these

forces are two overarching factors that are producing a transforma-

tive impact in their own right: the rapid development of information

technology and globalization, and the massive power of these two

forces working together.

The consequences of this VUCA environment are being felt by

everyone. The shelf life of any advantage is constantly shrinking;

competitive intensity is escalating; pricing and profit margins are un-

der pressure; and there is a premium on speed, flexibility, and inno-

vation. In industry after industry that I work with I hear the same

refrain: The environment is getting tougher. Global competitors are

everywhere. They are faster, more innovative, and more efficient.

It’s harder than ever to find a competitive advantage; even harder to

sustain it. As one CEO in the healthcare industry said to me, ‘‘The

era of easy money is over. We can no longer rely on product superi-

ority alone. We have to master operational effectiveness, too.’’

The result is, we now have to play an ‘‘and’’ game. You no longer

have a choice between being a low-cost operator or a great innova-

tor; you have to excel at both low costs and superior customer solu-

tions. If you dwell just on superior customer benefits, then lower

costs and a more efficient supply chain will kill you. Conversely, if

you focus just on lower costs but don’t pay attention to the needs of

customers, that will kill you.

The aim of this book is not to rehash the grainy details of the

various changes that are happening around us. The particulars of

these will vary from industry to industry. Rather, my purpose is to

help clarify the essential nature of this new environment, and then

to address what I believe is the larger question: What should be our

response to it?

The New Competitive ContextTo understand the fundamentals of today’s competitive landscape, it

helps to view it in an historical context. When we examine the long-

term trends, we can see four big revolutions, each of which ushered

xiv INTRODUCTION

E1FLAST02 02/02/2010 12:39:26 Page 15

in a new era, with totally new challenges and rules for success: the

agrarian age, the industrial age, the information age, and our current

era—what writer and trend-watcher Daniel Pink has called the ‘‘con-

ceptual age’’ (see Figure I.1).1

Note the pace of change. The agrarian age lasted almost 10,000

years, the industrial age 200 years, and the information age 50 years.

The conceptual age is only 10 years old.

The change from the information age to the conceptual age has

been a radical one. The information age concentrated on the volume

and ubiquity of data. It turned information into a commodity, which

has become abundant, cheap, and rapidly transferable. In the con-

ceptual age, our source of competitive advantage is no longer finding

more information; it is making sense of the overwhelming volume of

information already available to us. Sense-making, creativity, and

the ability to synthesize, not just analyze, have become paramount.

To succeed in this new world, organizations will need to manage

a fundamental shift to a different leadership model, as shown in Fig-

ure I.2. Competition in every arena and on every level is affected by

these changes.

Whenever the environment shifts in a dramatic way, some spe-

cies become extinct, while others adapt and thrive. Adapting and

Figure I.1 History’s Four Big Revolutions

Introduction xv

E1FLAST02 02/02/2010 12:39:27 Page 16

thriving in these changing competitive circumstances is going to be

extremely challenging and will produce a whole new set of winners

and losers.

Winning in the New EnvironmentWhat does all this mean for organizational leaders? The answer is

the same whether we are engaged in developing national policy, mil-

itary campaigns, or strategies for commercial or not-for-profit enter-

prises; and for organizations large and small. Our key leadership

challenge is to build adaptive organizations—those with an in-

grained ability to make sense of the changing environment, and then

rapidly translate these insights into action.

This thought is not new. In fact, it has become something of a

rallying cry. We hear it repeatedly in books, speeches, and business

articles. But the rhetoric is easy. What has been missing is a practi-

cal process to translate this transforming idea into practice.

Reinventing Strategy with StrategicLearningThe way that work gets done in organizations is through systematic

processes. Concerted action is not an ad hoc affair. And it certainly

does not result from simple exhortations, no matter how often or

loudly they are repeated.

Figure I.2 Fundamental Shifts

xvi INTRODUCTION

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The processes we use must be fit for purpose: They must do the

job they are designed to do. The old, ritualistic, numbers-based plan-

ning methods no longer work today. They were designed for a differ-

ent, more static era. They are, simply, no longer fit for purpose. In a

VUCA environment, our emphasis must shift to insights, ideas, and

ongoing renewal. What is necessary is a dynamic method for creat-

ing winning strategies and renewing those strategies as the environ-

ment changes. We must change our approach from ‘‘strategy as

planning’’ to ‘‘strategy as learning.’’

Eight years ago, in my first book, Reinventing Strategy, I laid

out a process called Strategic Learning, a practical leadership

method for translating these ideas into action. Strategic Learning is

a learning-based process for creating and implementing break-

through strategies. But unlike traditional strategy, which aims at

producing one-time change, Strategic Learning drives continuous

adaptation.

As shown in Figure I.3, the process has four linked action

steps—Learn, Focus, Align, and Execute—which build on one an-

other and are repeated (as a fifth step) in a continuous cycle. In

essence, Strategic Learning is an ‘‘insight to action’’ model. The lead-

ership challenge is to repeat it over and over, so that an organization

continuously learns from its own actions and from scanning the

environment, and then modifies its strategies accordingly. Strategic

Figure I.3 Strategic Learning: The Leadership Process

Introduction xvii

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Learning combines strategy, learning, and leadership in one unified

process.

The underlying ideas and tools of Strategic Learning have since

been applied in organizations as wide-ranging as ExxonMobil,

Ericsson, DePuy, Novartis, the Federal Home Loan Bank of Atlanta,

the Girl Scouts of the USA, and Henry Schein, Inc., among others.

The leaders I have worked with feel that the process and the con-

cepts that have inspired it are intrinsically compelling and have

made a real difference to their organizations. The Strategic Learning

methodology has also become the basis for how strategy is taught at

Columbia Business School’s Executive Education programs.

Why This Book?The past eight years have served as an ‘‘action learning’’ laboratory.

Through my seminars and consulting work, there have been multiple

opportunities to apply the principles of continuous learning to the

Strategic Learning process. It has been tested in the white heat of

the action arena, subjected to intellectual scrutiny and debate by or-

ganizational leaders and my colleagues at Columbia University, and

assessed in the light of my own experience as a practitioner. Both I

and the organizations applying the Strategic Learning process have

discovered how to derive better and better results from it. We have

learned through trial and error what works and what doesn’t, and

which concepts and tools can best help us adapt and excel in the

evolving external environment in which we operate.

That’s good, because compared to eight years ago, there is a

greater need than ever for a process that enables organizations to

make sense of and adapt to the VUCA environment, and do that bet-

ter than competitors. It also is a healthy reminder that as we keep

raising the bar on performance, we must address two gaps: The first

is from knowing to doing. That gets us going, but doesn’t carry us far

enough. The second, and even more significant gap, is from doing to

excelling. Addressing the doing/excelling gap is a journey that never

stops.

It is in the spirit of our mutual pursuit of excellence that I write

this book. In service of those who are already applying Strategic

xviii INTRODUCTION

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Learning, I have now incorporated all my latest thinking, enriched

by fresh examples and more extensive practical guidelines, which I

hope will significantly enhance your effectiveness. For those who

are new to Strategic Learning, this book will, I hope, introduce you

to a set of ideas that you will find valuable and timely—ideas that

you can readily translate into practice. In service of both groups of

readers, I have pulled everything together in one place so that it will

not be necessary to read the first book in order to get full value from

the second.

Getting to ExcellingIn the journey from doing to excelling, six key lessons, which I will

emphasize in this book, have emerged about the effective applica-

tion of Strategic Learning:

1. To find great answers, we must discover great questions. It

is not possible to address the changing environment with all

the right answers. The real challenge is to find the right ques-

tions. In fact, producing answers without the right questions

can be downright dangerous.

Entrenched answers create fixed mental models. They

become a substitute for critical thinking. And, inevitably,

they—and the organizations clinging to them—get overtaken

by events. The right questions force us to challenge our

underlying assumptions. They unfreeze us and open new vis-

tas. Good questions open the doorway to insight; they serve

as our portals of discovery. They help us adapt to change.

2. Simplicity is the springboard for success. I constantly

challenge and cajole executives to express their strategy in

as few words as possible, and then pare it down further to its

absolute essence. When I hear the response, ‘‘It’s more com-

plicated than that,’’ what I think is, ‘‘You don’t understand it

well enough.’’ When you really understand something, you

can simplify it. When you don’t, you complicate it.

Simplicity is not a short cut. It is hard work that goes to

the very heart of effective leadership. Organizations cannot

Introduction xix

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follow complexity. They are paralyzed by it. The task is to

translate your strategy into a simple, compelling leadership

message that will win the hearts and minds of all your people

in support of what needs to be done. Most important, simplic-

ity creates an intense focus on the right things, the crucial

ingredient for success.

3. Strategy means thinking from the outside-in. What happens

when co-workers get together for a friendly conversation?

Most of the time, they talk about themselves: who’s who in

the zoo, who’s doing what to whom, why so and so was pro-

moted or not promoted, and so on. It’s all about us—our

team, our organization, our culture, our bosses. This is a natu-

ral state of affairs. But organizations that aim to become

adaptive have to get used to an unnatural act: outside-in

thinking.

Outside-in thinking means the conversation starts with

the competitive environment outside the organization: Who

are our customers? What do they value most? What are our

competitors doing? What are the key industry trends that

might affect how we make money? Thinking strategically

means thinking with that outside-in mind-set. Functioning

strategically means making decisions based on that mind-set.

The leap from knowing and doing to excelling takes place

in the space between the challenges of the external environ-

ment and our internal abilities to meet them.

4. The point of strategy is to win the battle for value creation.

There is a great deal of confusion about the key deliverable of

a strategy. The result is that the outputs are often bland, all-

embracing statements—meandering lists of what the organi-

zation plans to do. They amount to one-size-fits-all declara-

tions that could be equally well applied to an organization’s

competitors.

Such pronouncements are useless. In a competitive envi-

ronment, everything is comparative. Customers have choices.

The question is: Why should they choose to do business with

you? The same applies to investors: Why should they decide

xx INTRODUCTION

E1FLAST02 02/02/2010 12:39:27 Page 21

to give you their money? Competing successfully means pro-

viding a margin of difference in the value you offer these two

key stakeholders.

In short, strategy must define how an organization will

win the competition for value creation. This means creating

greater value for its customers and investors than the com-

peting alternatives. Without a clear statement of how it will

achieve such an aim—what I call a Winning Proposition—an

organization cannot claim to have a strategy.

5. Strategy is everyone’s job. I am often asked, ‘‘Whose job is it

to create the strategy for an organization?’’ The answer that is

expected is, ‘‘The top leadership, of course.’’

That answer is wrong. It is based on an outdated ‘‘com-

mand and control’’ philosophy. The truth is that it is every-

one’s job. The senior leaders, of course, have a crucial role:

They must define the direction and strategic goals of the orga-

nization. But that’s not where it stops. That’s where it starts.

It is the leadership responsibility of each manager at every

level in an organization to create a clear line of sight to

the organization’s overarching goals, and then to translate

those into a winning strategy for his or her domain of

responsibility.

The logic is simple and unforgiving. It’s a matter of strate-

gic cohesion. If an organization is to win at value, then every

subgroup in that organization must contribute to that value

generation, or simply be a cost drag. There’s nothing in

between.

6. Strategy and leadership are essential parts of each other.

Strategy does not have a life of its own. It is an inseparable

part of leadership.

Leadership comprises three key domains:

! Intrapersonal leadership—leadership of self

! Strategic leadership—leadership of the organization

! Interpersonal leadership—leadership of others

Introduction xxi

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The key to success is integrated leadership, ensuring that all

three domains are working hand in hand, each one support-

ing the others. When any one is missing, the others cannot

succeed.

All these lessons add up to one overarching epiphany: the impor-

tance of the human dimension. Of course, this is not news. Leaders

constantly declare that ‘‘our people are our strongest asset.’’ I ran

companies for 20 years and know from personal experience that the

difference between commitment and mere compliance is monumen-

tal. But the more I explore the potential of the Strategic Learning

process, the more I am struck by the crucial role of the human spirit.

It is the governing factor in the success or failure of any organiza-

tion, or indeed any individual.

Napoleon, who is acknowledged to be the most successful mili-

tary leader in modern history, was supposedly asked which was

more important: material or spiritual resources? His answer: spiri-

tual resources—by a factor of three to one. I don’t know whether

the story is apocryphal, but from my own experience running large

organizations, I believe the ratio is absolutely right. In the final anal-

ysis, our leadership mission is to bring out the best in ourselves and

each other. If we can’t win hearts and minds, the greatest strategy in

the world won’t go anywhere, let alone help our organizations ad-

vance from knowing to doing to excelling.

xxii INTRODUCTION

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IIWhat Every

Organization Needsto Know about

Strategy

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