In the two months since the pandemic turned life as we know it on its head, there’s one truth that’s becoming increasingly clear with each passing week:
Not even the best firms can take out their pre-pandemic strategic playbook and apply it to their organization successfully
Over the past few weeks, I’ve had a number of calls with executives and teams that are facing the same basic quandary: they have spent significant time investing in long-range planning and strategy that they felt was doing a great job – right up until the time of the recent crisis.
The time before and after March 8, 2020, represent two very different worlds:
- Before that date, the largest driver for strategic work was FOMO, or the fear of missing out, on participating in a historic economic expansion.
- Post pandemic, we are looking at FOCI, or fear of COVID-19 infection – personally, internal to our firms, and in serving our clients.
These leaders and teams know they need to make serious resource shifts. Specifically, leaders are looking into their strategy work for insight to make differential investments in people, processes, and technology that will allow them to experience stability, growth, and returns for their stakeholders (this includes financial, internal, geographic, partners and suppliers).
However, the work captured in their strategy documents isn’t accounting for the magnitude and dynamic nature of this needed shift.
Much like the changes in economics that were experienced as railroads moved the centers of physical commerce, COVID-19 is shifting the value landscape beneath our feet in real time.
5 Reasons Strategy Documents are Breaking Down Now
The process built into most firms, modeled on work by academic strategists, has lulled us into a lengthy dream-design-install cycle, and now the world is too dynamic for that. The truth is that many of the “tools” we used were assembled in the rearview mirror with a lot of confirmation bias towards the previous momentum. We fell prey to developing well-documented ways to extend trends that were already in place. The implicit assumption is that the world will stay stable while we plan our strategy, but in this environment, it’s just not true.
I’ve been pouring over documents in the last few weeks and supporting executive leaders in developing fresh plans. Through this work I’ve found these concerns with their current strategy work:
Concern #1: They only examine one main environmental context and are untested at different levels of economic stress.
Why it won’t work now: The economic constraints are shifting quickly. We need to have projections that we’ve already worked through to allow for fast decision making.
Concern #2: The work is very high level and conceptual, stopping short of crisply prescribing market scope, investment recommendations, and talent requirements.
Why it won’t work now: When we stop our strategy work at a high level, it leaves the work of implementation strategy undone. This forces the team to do the hard work of response development and debate at the same time they need to implement – which doubles the work.
Concern #3: Many times they skip the insight and proceed directly to operational initiatives and plans. By outlining objectives, and not strategies, brittle outcomes are created.
Why it won’t work now: Insights are the rocket fuel of strategy, and finding them and forming them into practical applications and examples is where real implementation is done. It is nearly impossible to scale strategically without doing this step.
Concern #4: They don’t build on the firm’s current expertise. This sets up a debt to be paid of competence development while in competition with market incumbents.
Why it won’t work now: The cornerstone of great strategic response is the application of “hidden” strengths to fresh problems. It is easy to be seduced by a problem that we are interested in, versus those we have the competence to solve. At this time, we need to bring our best to the emergent needs of our customers.
Concern #5: They contain a basket of workstreams without clear interrelationships. This reinforces pre-existing line item momentum rather than a strategic focus.
Why it won’t work now: This usually occurs when strong functional leaders press for their agenda to be “included” in the strategy. In making room for everyone’s project, strategic focus is watered down. So rather than allowing directional decisions, you get a weak inventory of current work.
Because of the above, leaders are wishing their strategy work was more focused & adaptive.
What Does Adaptive Mean For Us Now?
Websters gives us a clue what we mean by “adaptive” in the following definition of the word:
: modification of an organism or its parts that makes it more fit for existence under the conditions of its environment: a heritable physical or behavioral trait that serves a specific function and improves an organism’s fitness or survival
In short, we need strategy documents that allow us to draw insight from them even if the environment shifts. Static approaches will not get it done.
In the post-COVID world, the new competitive battlefield is the time from the firm knowing it to the time the firm is doing it.
3 Steps to Move Toward Adaptive Strategic Planning
Leaders who want to decisively put their firms on solid footing will:
- Use their full team as a network: These leaders collaboratively gather intelligence and then mine those insights ruthlessly. One of the most profound shifts in the last decade has been the realization that we need to think of the firm as a network, where the decision making and insights are at the edges – not in the conference room at corporate headquarters. The best firms use that conference room space to gather and update the strategic insights from the front lines and send them back out to the field. Those who do this are turning insights into operational value faster than their peers.
- Complete three scenarios as a matter of course: Firms who invest the time to talk through a base case and two valid options (one high and one low), find they are much more able to pivot than those who are locked on to one set of environmental variables. For example, we train pilots to have a specific plan on takeoff that includes aborting before leaving the ground or very specific actions if the aircraft is impaired after it’s in the air. This allows the pilot to run through a mental checklist of each path pre-briefing themselves, and not miss a beat when the time for action is upon them.
- When they know what they know, they move with dispatch: It is very important as leaders to have high regard for time as a resource. Many of our systems are built to treat the scarce resource as money, and while we want to be good stewards in times of dramatic change, the highest payoff is getting the right thing, in the right place, right now. In mature firms, it is easy to allow time to go by while over-perfecting (what one of my clients calls “polishing the cannonball”).
Our businesses need to get back to peak value creation as fast as possible to serve their internal and external stakeholders, communities, and investors. We need to move our teams to value-seeking rather than perfecting. To that end, it’s time to set aside those cyclic tools that aren’t serving us and build highly responsive and dynamic strategic loops.
By embracing the current, rapidly changing environment with these tools in hand, leaders are finding that they are able to engage their teams to be highly value-added in serving customers, and are finding that their firms are more able to change.
Help
This is no small thing, and if you are still reading, you know that. If you’d appreciate some outside support from a veteran of six recessions and strategic restructurings, please reach out to me on my direct line at 847-651-1014 or put a quick chat on the books using this link.
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