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Strategy Today: Beyond Planning

By Beth R. Chase

September 24, 2019

Every organization is facing increasing complexity. According to Innosight’s 2018 Corporate Longevity Forecast, the average tenure of S&P 500 companies has shrunk from 33 years (1964) to 24 years (2016) to a forecasted 12 years by 2027.[1] This indicates that nearly half of current S&P 500 organizations will be replaced in the next decade.

Is your organization’s strategic planning process ready for this reality?

Smart leadership teams no longer believe that winning will be guaranteed just because they execute their strategic plans. Inevitably, whatever direction they choose to take will be constantly challenged. Agile organizations refresh their tactics at least every quarter, sometimes every month, in response to emerging disruption.

In short, successful organizations are moving beyond traditional strategic planning cadences to flexible, resilient strategic thinking and decision making, followed by iterative, change-ready strategic execution.

FLEXIBLE STRATEGIC THINKING

Many senior executives still come into the strategic planning process with the expectation that they will be shaping and securing the long-term future of the organization by setting the direction of the organization for the next three to five years.

Reality often crashes into these carefully laid plans. When the present is as complex and fluid as it is, no one can anticipate and prepare for the long-term future with certainty. Flexible, change-ready strategy is required to face this kind of future.

First, however, there is a key element that will remain constant: the organization’s purpose, defined by its strategic mission and vision, will remain central. This provides the foundation for a portfolio of strategies designed to serve customers, expand markets, and reinforce competitive advantage.[2]

While your organization’s purpose may be clear, the path leading to your organization’s strategy is not so clearly defined. Leaders must change their mindsets from traditional, slow planning approaches to active strategic thinking, crafting and improving strategies before – and during – execution.

To continually shape successful strategies, organizations must be thinking about what customers will need and value both today and tomorrow—and then figure out how to provide those solutions. Gather intelligence internally and externally, amplify the signal from the surrounding noise, and refine strategies according to the real-time, often imperfect information.

For example, we have leveraged a framework when developing strategies with clients where we encourage leaders to reimagine if their organization came to market today:

  1. Sidestepping how you got to where you are (the evolution and history of the firm), what would your value proposition look like?
  2. If you were trying to disrupt the market, what kind of innovative business model would you consider (remember, this is “no-strings-attached” brainstorming)?
  3. If you were a competitor seeking to take down the company from the outside, what sort of strategies would you employ?[3]

CREATE THE SPACE TO DECIDE

From this effort, leaders will have to make the tough calls. Deciding on strategy is hard. Whether you make wise decisions or not will depend on how well you and your organization can push through ambiguity and discomfort.

Whatever is coming next will threaten the status quo. Leaders will require the psychological safety to have open dialogues about old assumptions that are still driving business, while balancing the new efforts designed to shape the future. Creating space for questioning the status quo before making the strategic decision is critical for alignment, buy-in, and effective action.

Next, it is key to cascade this alignment throughout the organization by effectively communicating why the strategic decisions are being made and what the desired returns are. Only then can people begin to act in a way that iteratively incorporates what they learn as they execute that will help realize the corporate strategy.

CHANGE-READY EXECUTION

When driving strategic execution, we encourage clients to stop their people from focusing solely on process (doing everything “right”) and to start focusing primarily on flexible, change-ready strategic execution (doing the right things in the face of change). This requires giving your teams access to the same “signals” you are seeing as leaders, wherever that data is relevant to their actions. Organizations can adopt an iterative “execution-as-learning” mindset within teams in order to balance risks, promote innovation, and respond to disruption more rapidly. [4] Natural next steps will emerge as empowered, cross-functional teams engage with data-driven ideas and apply them to in-flight strategies.

The secret to success in this change-ready execution approach? The right talent in the right role. This requires adopting the art of hiring and training resources to embrace their capabilities and expand their core competencies. This equips individuals, teams, and organizations to make bold moves and accelerate innovation. Silicon Valley giants like Google recognize this. Acquiring the right talent is the means by which Google’s portfolio of experiments reach critical mass and disrupt competitors at top speed.

CONCLUSION

The days of traditional long-term planning are over. If organizations hope to survive, compete, and thrive, it is critical to anchor on purpose, look to the future, discern, decide, and act out strategy in an iterative, change-ready way. Only then will strategy be the living, breathing differentiator leaders need it to be as their organization interact with our vibrant, complex reality.


[1] Scott D. Anthony, S. Patrick Viguerie, Evan I. Schwartz, and John Van Landeghem, “2018 Corporate Longevity Forecast: Creative Destruction is Accelerating,” Innosight, February 2018.
[2] See: Thomas W. Malnight, Ivy Buche, and Charles Dhanaraj, “Put Purpose at the Core of Your Strategy,” Harvard Business Review, September / October 2019. Also Inspired by: Paul J.H. Schoemaker, Steve Krupp, Samantha Howland. “Strategic Leadership: The Essential Skills,” Harvard Business Review, January / February 2013.
[3] Inspired by Lisa Bodell’s Kill the Company, Routledge, June 2012.
[4] See Amy C. Edmondson, “Wicked-Problem Solvers,” Harvard Business Review, June 2016.