A military maxim attributed to 19th century Prussian general, Helmuth von Moltke the Elder, states: “No strategy survives first contact with the enemy.” Mike Tyson put it more bluntly: “Everybody has a plan until they get punched in the mouth.” For most businesses, 2020 was the punch in the mouth that has made most of them rethink their approach to strategic planning. Agility is the new watchword.
Some may even go as far as to wonder whether any grand, long-term strategy can endure in a world that is moving this fast. After all, many corporate strategies conceived for 2020 were made irrelevant within a matter of weeks while at the same time areas that had been placed on the backburner for some future time became front and centre overnight. Furthermore, the pandemic has and continues to disrupt our lives and change our habits professionally, socially and within corporate operations. Before one ventures an opinion as to how leaders might respond to such turbulent operating environments, marked by high levels of uncertainty, it’s worth considering what business strategy is.
Though there are numerous definitions of strategy, for the purposes of this piece renowned business author, Michael D. Watkins’, definition is most apt:
“A business strategy is a set of guiding principles that, when communicated and adopted in the organisation, generates a desired pattern of decision making. A strategy is therefore about how people throughout the organisation should make decisions and allocate resources in order to accomplish key objectives.”
As this definition shows, a business strategy doesn’t necessarily need to be what many people think it is: a grand, top-down plan conceived in the boardroom and issued as an edict to be rigidly followed to the letter for five to 10 years of the business’s existence. While this sort of long-term planning can help give purpose and direction to the business, it does need to be flexible enough to cater for change.
Harvard Business Review author, Tim Leberecht, articulates it like this: “.., Strategy has long been the domain of careful deliberation based on a maximum amount of information. But that model may no longer fit our volatile, uncertain, complex, ambiguous times. In a dynamic marketplace, the value of traditional strategy is diminishing…How often have you crafted a meticulous three-year strategic plan, only to have it become obsolete after a few months, or even weeks?”
This said, another school of thought might argue that the strategy remains, what needs to be flexible is the business itself, in how it operates in pursuit of the set strategy. Whilst this is an important and true consideration, there are two other items to think about. The first is the deadly notion of strategic drift, where strategies formulated are outpaced and therefore soon out of touch with changes in the organisation’s operating environment. Often times this is due to historical and cultural influences on decision-makers. The malady of strategic drift is what saw dominant brands such as MySpace and Blockbuster become irrelevant and unknown entities, almost overnight. This is simply because the strategies they chose to pursue were out of touch with realities in the market realities.
Closely linked to this is the concept of emergent strategies, particularly where there are high levels of uncertainty in the environment therefore high likelihood of adverse unforeseen outcomes. This requires high levels of continuous adaptation and experimentation until the most relevant path ‘emerges,’ in line with the environment.
Through the fog of war
This is where many business thinkers find resonance in the wisdom of Von Moltke the Elder. He conceived of an approach where subordinates, if disciplined and well trained, achieve better results if they were allowed to carry out a mission without micromanagement. In the chaos of battle, this would make them more adaptive in the face of unpredictable events.
Perhaps not surprisingly, some business consultants see echoes of Von Moltke’s thinking in echoes of the Agile methodology. In the same way as the general’s “mission orders” give fireteams the ability to respond to shifting tides on the battlefield, an agile approach to business strategy empowers teams in a business to rapidly adapt to customer behaviours, competitors or trends.
As one writer puts it: “Traditional approaches to digital strategy and transformation typically follow an “Analyse, Plan, Do” approach, focused on building certainty through planning before execution. Such ‘Waterfall’ plans assume certainties and the ability to predict outcomes – which tend to be the root cause for failure. These plans often turn out to be irrelevant as soon as exposed to the real world, which ‘digital’ has made even more complex, open and unpredictable.”
Putting more flexibility into planning is what Agile expert Steve Denning calls strategic agility. It is about mastering market-creating innovation by shifting from a world of formulating strategies focused purely on improvements and changes to products and services to a world where customer needs are placed at the centre and digital advancements are leveraged.
Experimenting for success
Business leaders in the digital economy have to prioritise fostering cultures where all employees, regardless of title or role, do not fear experimenting. One could go further into the realm of a culture where employees do not fear failure but are encouraged to experiment in order to find solutions that add value and solve real operational problems while also satisfying the needs of customers, now placed at the centre.
Leberecht advocates sprints (a short, time-boxed period when a team works to complete a set amount of work) as a means to formulate strategy. Such an approach is critical and most apt to gaining control in the journey of strategy formulation, particularly in uncertain environments.
“Sprints are an ideal way to incorporate vision, improvisation, imagination, and experimentation,” he writes, adding that sprints help bypass bureaucracy, “analysis paralysis,” and endless debate cycles. This tactile approach to strategy-making can be guided by a vision, “the long-term, if not permanent, purpose and principles of an organisation, which serve as the north star for all its actions.”
Thus, strategy formulation is about distilling the eternal principles that guide the business, while accommodating the many uncertainties we will face in a digital-saturated, post-COVID world, one where society and technology are changing at unprecedented speed. Above all, one where failure to adapt and pivot quickly could spell disaster for businesses, large and small.
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