It’s Time To Re-Set Your Strategic Thinking Post-Covid

Strategy: a plan of action or policy designed to achieve a major or overall aim. —Oxford English Dictionary

“Everybody has a plan until I punch them in the face.”   —Mike Tyson, boxer and philosopher

If you hope to salvage your business’s 2020, your strategy for the second half of the year (and beyond) is going to have to look different from what you’d planned back in December or January. Things are clearly not getting back to “normal” anytime soon, so now is the time to re-set your strategic thinking.  

Strategic thinking differs from strategic planning.  In fact, “strategic planning” could be called an oxymoron: when most businesses engage in what they call strategic planning, what they are really doing is some combination of financial forecasting and tactical planning —necessary activities, but neither sits in the realm of strategy, as my friend and co-author, strategy professor John Hillen, has explained. 

Harvard Business School strategist Jan Rivkin advises that strategic thinking is rooted in questions such as “What might we do?” rather than “What should we do?”  Strategic thinking inquires into possible alternative futures: “What would I have to believe for this to be true?” rather than “What do I believe?” It posits creative but credible assumptions about the future and then examines what burdens of proof would be needed for those scenarios to be true.  This kind of thinking can create insights that are critical to pivoting quickly in uncertain times.         

One way to jump-start your strategic thinking is by taking time to re-assess your business’s priorities or “Big Rocks,”  especially in light of changing dynamics in your environment due to the current crisis. You began this year (or you should have) with a set of priorities and goals; take the time now, ideally in an exercise with your team, to re-examine those priorities and your progress against them via a handful of simple but fundamental questions:

1. Which of our Big Rocks did we (and didn’t we) make progress against in the first half of the year?  And what can we learn from our successes and failures?  
2. Which of those Rocks remain critical priorities, even if we may need to execute them differently?
3. Which Rocks are important, but need to be deferred until later—given that we currently have limited team bandwidth or have had to reallocate resources?
4. Which Rocks are no longer important and should be abandoned?  (This is a tough question—nobody wants to kill their darlings—but companies must realize when certain initiatives are no longer meaningful to their customers or when the window of opportunity has abruptly closed.)
5. Should we have any new Rocks?  Are there any opportunities we can seize right now that we may not even have been thinking about back in the first quarter?

These kinds of questions are intended to help you shift your mindset to that of a strategic thinker, a mindset that should be characterized by openness, creativity, curiosity, and the courage to challenge your assumptions and the way you’ve done things in the past.  

Traditional corporate planning drills tend to be bottom-up and data-driven: teams and business units advancing initiatives they understand, can attain, and have the data to support.  Corporate planning thus tends to stick with the known and bias toward the present. Planning favors data and analysis: things that can be proven.  Many executives are most (and too) comfortable with such an approach: “show me where the data takes us!”

Conversely, great strategies are often pulled forward by a vision of a different future rather than a future that is essentially the same, linearly derived from the present and based only on known data about the present. When you are thinking strategically you ask questions such as: 

• What opportunities might exist in the market?
• Based on what we know now, why have past strategies worked—or not worked?  And can we re-frame how we think about the future based on those insights?
• What strategies have not been tried?  Why not?
• What do we as an organization do particularly well, and how can we deploy that capability to serve unmet needs?  (Especially if that skill or capability is hard for others to copy.)

Clearly our Covid situation presents special challenges and constraints, and over the next month you may want to think both short-term and longer-term—for example, how might things look different after a vaccine is made available?  And if the current mode of physical distancing is going to continue for another six months or year, what opportunities does that reality present now versus a year from now?

One classic tool to get a team that is locked into “the known” to explore different versions of the future is scenario-based planning exercises. Exploring various options opens up different possible futures with different implications and potential benefits for the enterprise.  This type of exercise forces the mind forward, to think intuitively about an unknown future rather than analytically about a known past or present.  

Not many executives are “natural strategists.” One famous study by David Rooke and William R. Torbert demonstrates that fewer than five percent of executives use strategy as their principle rationale in advancing or defending their ideas and decisions.  Most executives think logically, with deductive reasoning that can be proven; whereas strategic thinkers think analogically, and they draw lessons from one business setting and apply them to another.

How can you become a better strategic thinker?  Execution is an important executive focus but doing things well doesn’t matter much if you’re not doing the right things.  In times of great change and disruption, yesterday’s champions can quickly become tomorrow’s also-rans if they don’t change the way that think about what they are doing and how they are doing it.  “Where should we play, and why should we play there?”

Given how much everything in our world has changed in the last six months, the companies that doggedly pursue yesterday’s strategies, no matter how tenaciously, are not likely to succeed.