Always-On Strategy: A Guide to Agile Strategizing For Disruptive Times (4/4)

This is the final article in a series on "Agile Strategizing."

Part 1: Old School Strategy is Dead

Part 2: What is Agile Strategizing?

Part 3: Better Strategy – The Content of Strategy

Part IV: How to Put Agile Strategizing Into Practice – The Process of Always-On Strategy

“On s’engage et puis on voit.” (You comit and then you see.) – Napoléon Bonaparte?

“Agile Strategizing” will require you to shift not only your thinking but also your doing.

First, you’ll need to move away from doing strategy only once a year, during a 2-day offsite, for example, as many organizations still do, to making it an ongoing process of conversation, action, and reflection.

Second, you’ll need to move away from the traditional “thinking, then doing” to “thinking while doing.”

In short, you need to move from “planning” to “strategizing.”

You need to turn your strategy always on.

What does that look like? Here are two scenarios of “Agile Strategizing” in practice.

Scenario 1: It has become urgent

Many organizations, unfortunately, put working on their strategy off until it becomes urgent.

Consider the example of the ?Cold Company“ (name changed). Cold Company is part of a large global industrial group. It has about 150 employees, making some $20 million in revenue. Although it belongs to a group, it‘s seen as an investment, meaning the group has been very hands-off in the company's management, and the company is not integrated with its operations or other businesses.

But that is about to change. Cold Company is not doing very well, and the group wants to see things improve. So, the Group Head of Strategy asked whether I could help. His key message is that things need to change rather quickly. If Cold Company can‘t provide a solution, a strategy and prove that it works, it will be sold.

Up until now, Cold Company applied the traditional approach to strategy.

They had the vision of being a leader in their industry. They had set their financial goals for three years. They had forecasted sales and profits by year, quarter, and month. It was supposed to be a success story, at least on paper. But, in reality, they kept missing their objectives year after year, quarter after quarter, and month after month.

Because they lacked a clear strategy, they had engaged in all sorts of seemingly strategic initiatives. They had the vision to expand into new geographies, acquire new customers, launch new products, and sell more in their established markets, which they thought required price decreases, so they needed to cut costs, become more efficient, and maybe change the business model, and so on.

The owner had asked for a strategy several times already, but the leadership team of Cold Company had gotten stuck. They knew somehow what needed to be done in some areas. They even agreed on some strategic directions. But then there were many topics they couldn’t align on and many open questions. They thought they needed more data and more time to collect and analyze it before making any decisions.

But more data only made matters more complex. Worse yet, it didn’t provide the answers they needed.

Is reducing the price going to make existing customers buy more? Was the current business model the right one for expanding into new territories? Would a new product sell better than existing ones? Which customers should the company focus on? Should it sell directly or through distributors? Do we have the right value proposition? Should we move into servicing end customers? Do we have the right people? How can we grow in established markets?

As often, the solution was not in the data but in taking action.

“Agile Strategizing” offers a simple way to get started, even if you don‘t know 100% yet what your strategy should be.

As a leader in your organization, you know what challenges that must be overcome. More analysis and more data will not change that. But sometimes, you might only know part of the solution. Unfortunately, most leaders get stuck here, wanting to have the perfect answer, the perfect solution, before announcing its implementation.

I see this happen very often. This behavior is based on the idea that thinking and doing must be separated (thanks to Frederick Taylor’s Scientific Management).

Instead of taking the traditional approach of first thinking, then doing, in other words, fully developing your strategy and then implementing it, “Agile Strategizing” is about thinking while you’re doing.

You understand what is going on, decide on what challenges or opportunities to focus on, and take action. Then, you observe the results you achieve based on the actions taken, make sense of those outcomes, and repeat the process.

You iteratively craft your strategy, thinking while doing and doing while still thinking. And with every loop, the maturity of your strategy increases while you stay flexible to adapt to whatever happens along the way.

You probe and act, look at the results you’re getting, evaluate what they mean for your strategy, and adapt, fine-tune, re-design, and repeat the process.

In the case of Cold Company, we did a 2-day workshop (not offsite, but at the company) to get started. I like to call this the “orientation workshop.”

On the first day, we zoomed out as described earlier, discussed ambitions, looked at market trends to find opportunities, and we made an inventory of all the internal challenges the company was facing.

On day 2, we synthesized all this information into what I call a “strategy backlog.”

The “strategy backlog” contains three types of content:

1. Strategic moves that need to be executed. Things that everybody agrees upon need to be done. It’s clear what needs to be done, how it needs to be done, and why. It’s clear what challenge will be solved or what opportunity will be seized. And everybody is aligned.
2. Assumptions that need to be tested. These topics need to be explored or ideas that different team members have different opinions about.
3. Questions that need to be answered. These are often challenges or opportunities that need to be better understood and where the answer needs to be clarified.

Leaders at Cold Company, for example, were clear about the need to expand in Germany, but they disagreed on how to do it. Whereas the head of sales thought about partnering with a big player, the CEO kept challenging why this big player would partner with them. That’s an area to explore. Debating it won’t give you the answer. You need to act. In this case, we reached out for a meeting, and sure enough, they were not interested. So now we knew for sure, and we focused on other directions.

Once you’ve established the backlog of these strategic moves, assumptions to be tested, and questions to be answered, you define your first sprint.

Like in Agile software development, a sprint is simply a time-boxed period during which you will work on a specific topic. Regarding strategy sprints, I like to work in cycles of 3-4 weeks.

So for each sprint, you look at the backlog, pick a couple of topics, and start working on them.

At Cold Company, which had a leadership team of six, we picked three topics and assigned two leaders to each. These pairs then defined what they wanted to accomplish in the next sprint.

(I have developed tools like “The 4 Types of Strategic Moves” and “Strategy Triage” to help prioritize which topics to focus on.)

A month later, we got together again, reviewed the sprint outcomes, made sense of what they meant for the strategy, and decided on the topics and action steps for the next sprint.

We kept on doing this for a couple of months, solving one challenge after the other, and with every sprint, the strategy became clearer and clearer. At the end of 12 months, Cold Company had grown its revenue and profit by 50%.

Scenario 2: Always-On Strategy

Consider the example of “Health Company” (name changed). Health Company is a private hospital group with some 4000 employees, which wanted to reboot its strategy. A new leadership team had taken over a little over one year ago, and the CEO thought it was time to design a new strategy. Unfortunately, the team deemed that the old strategy was not a strategy but a list of buzzwords and lofty objectives without any specific actions behind it.

To get things started, we engaged in a series of meetings (again, no fancy offsites, but meetings at the company) over a couple of weeks to outline the core pillars of the strategy (the boundaries of the red triangle).

The core pillars were the priorities the leadership team decided to focus on. They were developed based on input from throughout the organization, customers, and key partners.

(We used my “Strategy Launchpad” approach, which you can learn more about at www.makebetterstrategy.com .)

These core pillars outlined the strategic direction, “what” the organization would focus on, “why” these pillars had been chosen, the strategic logic behind them, and among each other.

Once we had defined those pillars, we did not engage in a lengthy exercise to plan out each and every detail on how to go about implementing them in the next five years.

Instead, for each pillar, we defined the core challenges or opportunities to focus on for the next 12-18 months: the first steps, so to say, the first hill to climb. And we didn’t even outline all of those in every detail, instead, we proposed some initial thoughts on what to do, and we let the organization decide on what to do specifically and how to go about it.

As the organization started to work on these pillars, the leadership team met with key people every week to review the strategy, asking three questions:

1. Are we making progress on the implementation? Are we doing what we committed to? What are the issues we’re encountering?
2. What are the outcomes? Is it leading to the results we were hoping to achieve? In other words, “Is the strategy working?” If not, what needs to be done?
3. What’s the mood within the organization on our strategy? Is everybody still on board?

Based on the discussion, interventions and actions were designed and implemented to adjust and further implement the strategy.

These weekly conversations gradually, step-by-step, institutionalized strategic thinking and management within the entire organization, turning strategy indeed always-on.

Leaders and teams at all levels were constantly engaged in the three core activities of always-on strategy:

1. Reflecting, understanding, and making sense of what was happening,
2. Making decisions about the next steps, adjustments, and actions required,
3. Implementing actions.

Call to Action: How can you start engaging in strategic conversations using the abovementioned questions?

Conclusion: The New Rules of Strategy

Throughout this guide, I have outlined an alternative approach to strategy, and I hope that I was able to inspire you to rethink how you think about strategy.

Old-school, traditional strategy is mostly dead. What most businesses need instead is Better Strategy. And Better Strategy requires you to make these eight shifts

From: Old School Strategy: ?? → To: The New Rules of Better Strategy: ??

1. Financial targets and lofty vision statements → Focus on the most critical challenges and highest-value opportunities
2. 3-5 year plans → Which can be addressed in the next 12-18 months
3. Benchmarking best practices and following what competitors are doing → Put innovation back into strategy
4. Done once a year at a fancy offsite → Is always-on
5. Think, then do → Think while doing
6. Working behind closed boardroom doors → Involve relevant stakeholders
7. Analytics and PowerPoint → Engage people in conversations
8. Outsourced to “done-for-you” consultants → You take ownership and responsibility

But, no matter how you approach strategy, make sure it meets these quality criteria:

1. Clarity: A good strategy must have a clear and concise understanding of the problem it is trying to solve or the opportunity it is trying to seize.
2. Simplicity: A good strategy must have a simple and straightforward approach that can be easily understood and executed.
3. Coherence: A good strategy must have a coherent set of actions and decisions that are aligned and support each other.
4. Focus: A good strategy must identify clear choices and actions necessary to achieve success, with an underlying logic of why you think it will work.
5. Adaptability: A good strategy must be flexible and adaptable to changing circumstances and new information.
6. Innovation: A good strategy must contain a creative element to create advantage and differentiation.
7. Action-Oriention: A good strategy must be action-oriented, translating goals into specific, concrete, high-impact actions that can be taken, and will deliver the most significant results.

Make Better Strategy.

– Marc