The New Interface – The speed of strategy
Reading books from the 50s and 60s, it is easy to get the sense that strategy was virtually unknown. The businesses appear to have been monolithic things, just one step removed from Dickensian times. The degree of rigidity gives the sense that they carried on year in, year out without altering. That has changed significantly. Strategy has attained a huge degree of importance, to the point where it has become one of the underpinnings of business communication and media engagement.
Communication is one of the key differences from the days of yore. With the pervasiveness of smart phones and browsing, not only do businesses have unprecedented access to knowledge (particularly when people have the savvy to use Google to find stuff out instead of waiting for it to miraculously appear in their heads), but they also have the challenge of coping with the information and transforming it into meaningful outcomes.
If information cannot be turned into outcomes, lags arise, Small lags become bigger lags. That’s bad news. It’s easy enough to call the information a challenge. Perhaps it would be better to use words like ‘prerequisite’ and ‘foregone conclusion’.
The question is, how does the information alter the strategy?
The duration of the strategic plan has shortened significantly. It used to be measured in years, but innovation has reduced it. Today, strategy can be a matter of a few months as developments in the technology sector show. Climate change, and its real challenges, are likely to entrench the duration of strategy. A drought for instance, can have significant impact on consumer spending and wage bills, for instance.
However, in most businesses, strategy is still relatively fixed. Any rapid changes will be met with resistance, as it is a mission to adapt to change. Although the Board and CEO may be behind a rapid shift, resistance and drag will increase further down the hierarchy.
The document, be it on a one year or two year horizon, will be treated as sacred. However by adding to the structure of strategy, it should theoretically be possible to gain acceptance for change.
The annual strategy can be relatively fixed, but by adding two strategic tracks next to it, it can be enhanced. The key second track begins the year as a blank column or area. In this column should be added significant events. These could be threats or they could be opportunities. Take the example of a crisis of major proportions or a competitor doing the wrong thing. Both of these can fundamentally alter the business outlook.
Threats and opportunities should be logged and assessed after the initial response. If there is a fundamental impact on the strategy, the strategy should be amended, which leads to a third column, area for an evolving strategy.
In reality, there is nothing particularly radical about this approach. My feeling is that most businesses begin the year with a plan and end the year looking back and wondering how they got where they are. Using a three track approach recognises the changes and gives room to consider them on a conscious basis, as well as a lead on short term amendment of the strategy which opened the year.
As a management tool, it should be useful across the entire hierarchy.
If this is accepted, the question should become, with an evolving mission, what underpins the organisation as an entity? The answer to this can be found in elements of corporate philosophy, particularly governance, values, the vision, and the brand in as much as the latter is allowed among the ranks of the philosophical elite.
Like a person walking through an amusement park or a shopping mall, there are many different directions and diversions. However the person remains the same. The same should be true of the organisational entity. There is no point however in sticking to a course which will be unproductive.