Why Strategic Re-Think Is Today’s Prerequisite Strategy, 2040’s Ideas and Innovations, Issue 158
Issue 158, May 2, 2024
Although it seems counterintuitive in today’s dynamically changing marketplace, many organizations still live, breathe, and sometimes die by their static three- or five-year strategic plans. It takes so much work and time to develop these long-term plans, often structured more as a laundry list of aspirations, that they are hard to let go of. This multi-year term model is often disconnected from the actual capability or capacity of an organization at any given time. It is also a routine hodge-podge list, built by consensus, and often out of touch with evolving marketplace dynamics. Most often it is written without a roadmap for how any of the plan can be achieved or what activities relate to the expected outcome. A sense of entropy can result, leaving fixed plans in place that may no longer be relevant, triggering an organizational decline. Informed urgency is often missing as the dynamism of the market brings the future to the present.
The Future Is No Longer in the Future.
The future is here and now. Think about it. Rapid evolving technologies, quickly changing consumer preferences and behaviors, a broadly connected global society, and expanding economies all make the need for change front and center, in your face at nearly light speed. Tomorrow, not next year, brings opportunities as well as challenges.
Consider the legacy three- or five-year strategic plan theory versus a disruptive, iterative, and flexible theory. In our constantly evolving marketplace facing new geopolitical and socioeconomic pressures, sustained ambiguity, hyper-connected populations sharing with and influencing each other, and nearly constant, continuous uncertainty, which one would you choose? Less successful organizations are stagnant or fading from relevance, stuck in stasis with static plans and static understandings of the market and customers. We are seeing many organizations grasp at straws framed in the past, believing what they offer remains relevant with no need for informed urgency to change. We are seeing others completely flame out and disappear as their relevance in the marketplace is replaced by competitors who are highly flexible and adaptive.
Smart organizations build flex into planning informed by near-constant active listening to ensure iteration with both small and substantive course corrections. Navigating disruption, transforming, changing, and adapting is not a linear journey. Some organizations may realize they might not be able to embrace flex on their own and seek outside help to introduce challenges to conventional thinking. Change is hard, perception frames reality, and institutional filters lead to blindness to see what we really need to see.
In our practice, we advocate systems thinking, always focused on taking the outside-in approach. It allows an organization to remove the institutional filters and apply a critical eye that reveals how others see and value the organization (or not). Without a systemic approach, over time organizations can become insular with heads stuck in the sand. When we are committed to a long-term plan, that charter informs our tasks and where we spend our energy to the point that we may miss making crucial iterative and flexible changes.
Sarah Holbrook, Contextual Futures Strategist and Adjunct Professor at the Fashion Institute of Technology states, “The conventions of traditional business strategy have been disrupted by disruption. Seminal strategic models such as Porter’s Five Forces were developed in an era where an extrapolation of past patterns adequately advised future strategy. Now, concepts of sustainable advantage are proving an ill fit as a temporary advantage, regularly tweaked, and iterated upon are gaining favor. Relevance is seen as the advantage, but relevance is a moving target. Sustainable strategies should be designed as flexible modules which factor in plausible disruptions, including wildcards.”
Goodbye to Three- and Five-Year Plans
Strategic re-think is a new business practice and becoming an increasingly popular business theory. Here’s how it works in basic terms: The theory, in our definition, focuses on constantly assessing performance as it relates to one’s market orientation and gauging if the results align with the strategies and goals set by the planning effort. Re-thinking requires active listening and critical thinking evaluating the market, data, research, and current and prospective customers to determine ongoing relevance.
When performance decreases or shifts, and when data, feedback, and research indicate the sands may be shifting, a re-think is being constructively open to changing or fine-tuning the course. This fluidity often infuses anxiety into the thought process. Alarm bells may go off when we conflate the urgency to “do something” with making corrections for the sake of correction. As we recently wrote, using reflective thinking becomes critical to determining the right iteration and avoiding a knee-jerk reaction. Reflective thinking is not mutually exclusive from thoughtful urgency.
Today’s global, digital marketplace begs for iteration because, clearly, there is urgency. The approach should be informed and thoughtful urgency. The rate of change in a near-constant tech evolution and AI as the desirable shiny new object puts pressure on all organizations to figure out how to identify and integrate appropriate new technologies. Changing consumer preferences force competitive repositioning. Competitors who are quick, adaptive, and flexible are becoming more numerous. The goal posts keep moving and it becomes anxiety-provoking to know which shifts are catalyzing the necessity to flex and which may flame out tomorrow.
The central issue is thoughtfully and critically separating out the noise and determining what is necessary and meaningful. And speaking of noise, it’s unfortunately becoming white noise to those who don’t want to listen as the number of competitors vying to gain the attention of the same base of customers grows.
Evolving Past Practices
The paradigm used to be building strategies methodically and systematically. The whole team, board, and other stakeholder groups were facilitated to align and agree on a plan. Those that were outliers, bringing different perspectives were quieted as no one wanted challenges to the assumptions behind the strategy. Retrospectively, being the tortoise left organizations in the dust. Slow and steady was a fool’s errand.
That was then. The pace has picked up. Informed urgency has become the new strategic watchword. But not urgency at any cost. Iteration with a sense of informed urgency is the new smart strategy. Think of the Japanese concept of “kaizen” or continual improvement.
Re-Think Resistance
Talk is cheap; action is critical. So, how do organizations of any size embed strategic re-thinks into their planning? Let’s start at the beginning. What is strategy? It’s not a bunch of fluffy packages of buzzwords, motivational slogans, and short-term financial goals, according to author and strategist Richard Remelt. What do you do best or better than anyone else? A good strategy is a “specific and coherent response to — and approach to overcoming — the obstacles to progress,” he says. And the obstacles are a moving target today. Think of it as an oxymoronically flexible blueprint for success.
A cautionary note: The drive to be better than anyone else can often be disconnected from realistic capabilities and capacities. An important step in any strategy development is to recognize one’s limitations. Does the organization have the skills and talent to exceed expectations? Can it identify the necessary investments to expand the organization’s scope?
Some organizations have renamed their operational tactics as “business unusual,” according to Fast Company. That may also include unconventional organizational design. That’s where the foresight experts and the valuable outliers come into play. According to Ethan Chernofsky, SVP of Marketing at Placer.ai, the new definition for innovation is impact. Innovation with purpose and results is a pillar of strategic re-think. And the architects behind impactful innovation are business unusual thinkers.
Focus is another issue. Research from Robert S. Kaplan, a professor of leadership development emeritus at Harvard Business School reports “85% of executive leadership teams spend less than an hour per month on strategy.” And Vistage research reveals that 72% of CEOs utilize an internally developed approach for strategic planning, relying solely on a self-built framework that has been generated over time or handed down generationally.” Predicting the future based on an irrelevant past is a certain strategic death. Updating antiquated approaches requires identifying and eliminating the gaps in the current processes.
Foresight Is Insight
But the real barrier to re-think is having the right workforce that is inclusive with disruptive voices in the team mix. As a leader, who do you look to in your organization for foresight? Perhaps a new title in town should be Chief Flexibility Officer.
Increasingly we need nontraditional thinkers who can constructively pull apart any strategy and reweave it in a relevant and flexible plan. Creating an open culture with a system and mechanism for critical thinking is key. Ensuring criticism is welcome and objectively heard in any interaction or discussion is the new model.
Next have a clear, transparent, understandable communications campaign to bring the workforce into the plan. It’s necessary to inform teams how flex and iteration can lead to improvements or alter the course. Workforce alignment, or lack thereof, can make or break any plan. Building trust, establishing an environment for open critical communication and voices, and active listening build the operational infrastructure for successful evolution and yes, transformation.
Flex Time
We often write about the necessity for organizational shared purpose matched by a clearly defined market orientation. This practice was also the focus of our book, The Truth About Transformation. It is important to use flex and iteration to evolve directions, goals, and strategies. Shared purpose is always the glue that holds an organization together in serving its customers and workforce — and how it seeks to contribute to society.
We all aspire to improve with the necessary investments to reach our goals, iteratively brick by brick, over time. But we often forget that we need to remain open and adaptive, not rigid, when variables seem to change at the speed of light. We also need to acknowledge that we don’t know what we don’t know.
Foresight of the future is helpful, but there are many possible future scenarios. Choosing the right path is a challenge. However you choose to chart the journey, rigidity is folly. Slow and steady without adaptation can be a disaster. And don’t be held back by the fear of fear itself. As we often say, it’s a brave new world, and welcome to it!
Infuse your organization with informed urgency, embrace active listening, take the outside-in viewpoint, be open to critical dialogue, incorporate reflective thinking, and recognize the necessity of flexing and iterating. Strategic re-think is paramount in today’s market and your organization’s success hinges upon its embrace.
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