The Virtues of the Clear Fuzzy Strategy

 In Goal setting

The Virtues of a Clear Fuzzy Strategy

Conventional wisdom in goal setting seems to suggest you should precisely articulate you long-term goals, make a clear plan to get there, and monitor the results to make sure you stay on track. It has the smell of a  bootcamp about it, getting you up that hill at all costs. For most of us however life’s success and happiness don’t rest on achieving a single objective.

Our lives are complex, what we need and want evolves over time. We have many goals some of which conflict, trade-offs are required and a sensible balancing approach is required.

Clients come to financial planners to achieve goals and while they are often associated with money, money is usually a means to an end. Our clients seek inspiration, techniques, reassurance, confidence so that their financial circumstances can provide security and independence to achieve the really important things in life.

We often think about financial planning as charting a course across an ocean. We get clients to agree on a clear destination, then we use pre-established maps and compasses to chart our course.  We are there for clients when a storm arrives to help right the ship, and we are there to replot the coordinates for them when a wind has blown them off-track. This narrative tends to paint the planner as the experienced sea captain. All the client need to do is to decide where they want to go and man the rigging to make sure the strategy is followed. It’s a nice analogy, but I think it misses something.

For a long time I have been searching for a better way to articulate the true complexity and richness in my client’s lives. I find it rather naïve to imagine that we can foresee that far in the future to plot such a precise course. Many of my clients don’t know what they will want and need 10 years into the future, let alone 30 years into the future.

These clients are not short-sighted, either in their thinking or their willingness to prepare. Instead they are very realistic, that they cannot know their future circumstances or future selves with such a high degree of precision. Those client however are quite clear about what is important to them, and it’s highly likely that those values are going to continue to be important in their future selves. They see the value in make solid preparations today to move towards their aspirations in a meaningful way. And they want to take sensible measures to protect their financial security. They also want the flexibility to be open to opportunities in the future, whatever that may bring. They are eager to learn new skills and incorporate new behaviours to increase their options.

In my mind these are very sensible traits for individuals to have, despite it not conforming to a box on my spreadsheet of target retirement date and required retirement income. Instead of charting a course for a set destination, I see this more as a exploration of an unmapped land. To survive and thrive we need to be prepared. We need to understand our capabilities. To learn new skills. To know what we are aspiring to do. We need to have a clear plan about what we are doing today and tomorrow to make sure that we are moving towards our desired goals. But we need enough flexibility to cope with the unexpected, but also to take advantage of new unexpected opportunities as they arrive. We need the grit and determination to power on, and also compassion and insight for when we need to rest. We will have many goals, some of which will compete, but survival requires a balance of approaches so we don’t focus on one single goal to the detriment of others. What is important will change, and our strategy needs to be flexible enough to adapt.

I had thought that this was just my contrarian take on the world. However I was pleasantly surprised by some research that has been done on large corporations and they gave it a name ‘Clear Fuzzy Strategy’. They studies some of the best performing corporations in Australia and found:

‘Strategy needs to be clear enough to provide guidance to current activities. At the same time it can be fuzzy so that opportunities that are related or are incremental can be taken up’. Characteristics of organisations operating clear but fuzzy strategy included attributes of adaptation, continuous improvement and innovation. The organisations were also structure to ensure the were flexible enough to adapt to external change. Strategy was seen as an art; managed within a system of continual improvement. Strategy for winning organisations is clear, but slightly fuzzy. It is communicated with a high degree of clarity and consistency, but in different ways and it develops and changes incrementally over time.

The Winning First XI Hubbard, Samuel, Cox & Heap, Wiley 2007

I think this has applications beyond corporate strategy. I think it helps many of us take a more realistic and helpful approach to our career management, and helps explain ‘Where do you see yourself in 5 years time’ is a truly ridiculous question. Whereas understanding your goals and values, and articulating your shorter-term clear plans for development are right on the money.

I think it helps entrepreneurs launching their businesses in those first years. Why that business plan you wrote on day one bears no resemblance to where you are today. And that’s a good thing.

I think it helps with our overall personal goal setting, particularly for those longer term goals and with that in mind I think it’s a really good reality check for financial planning.

We will always talk about your hopes and aspirations, your concerns and fears. We will look at where you are and where you want to get to. We’ll make sure you are equipped with knowledge and clarity about what to do next. Your values are likely to stay fairly constituent over time. But as you grow and develop your aspirations and concerns may change along with them and as planners we’ll be there with you to help you take the next steps to explore with confidence that exciting and uncharted territory that is the rest of your life.

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