Jeff Schwisow (pictured below) is a Melbourne-based strategy specialist, speaker and the author of Projectify – How to use projects to engage your people in strategy that evolves your business. In this latest post for B&T, Schwisow says your agency will end up off a cliff without the right roadmap in place…
At its very core, strategy is a future-focused activity. It exists to create the most advantageous environment in which to conduct your business’s operational activities – its tactics. But in today’s highly-dynamic business environment, the best governance is no longer as simple as producing a strategic plan. Increasingly, good strategy-making means persistently responding to the shifting business landscape so that the business’s strategic needs are consistently met.
This makes strategy a journey that has direction but no destination. However, this journey isn’t a drive on the Hume Freeway from Melbourne to Sydney. It’s a trip through the wilderness over uncertain terrain.
The uncertainty of this future business environment means you need to be intentional about the way you journey into it or you’re certain to get lost. To set out on a journey of this complexity, you need to decide where you’re headed – you need a roadmap that your organisation can follow. A roadmap that sets out both the initial steps you’ll take on your journey as well as the approach you’ll use to refine the roadmap as the journey unfolds.
Why strategy struggles
Unfortunately, business strategy has become a very static, analytical discipline that lacks action and forward momentum. Our strategy-making is often more concerned with developing a plan that creates the illusion of certainty, than with forging a successful path toward an uncertain future. As a result, research shows that anywhere from 63% to 90% of organisations fail to successfully implement their strategic plans.
This is because one of the rarest elements in a strategic plan is a strategy for executing your business’s strategy. In fact, research undertaken by McKinsey showed that only 23% of companies use a formal process to operationalise important strategic decisions. Robert Kaplan, of The Balanced Scorecard strategic planning approach, reports that they have undertaken multiple studies that show 90% of strategic implementation failures are the result of ineffective execution.
An effective strategic journey is both deliberate and emergent
Henry Mintzberg, in his 1994 book The Rise and Fall of Strategic Planning, talked about the need to incorporate two elements in our strategy-making. He called these ‘deliberate’ and ’emergent’ strategy.
Deliberate strategy includes those initiatives that are preconceived, require careful planning and have a very specific outcome in mind. This would include capital infrastructure investment or expanding into a new geographic market. The need to devote capital and organisational resources to these types of projects means that they need to target very specific long-term benefits and incorporate carefully considered predictions about where the market and the economy are headed.
Emergent strategy includes those activities that are the product of ongoing synthesis of the market and business environments. This means consistently translating what’s happening in the market, within your business and your assessment of potential business opportunities into strategic action. An effective emergent approach initiates strategic activities that will prepare the business for a future shift in approach or focus rather than creating an operational reaction to emerging data.
Mintzberg argued that any business that doesn’t include an emergent component in its strategy-making leaves itself dangerously exposed to the rapid pace of technological and competitive change. Twenty-five years on from this work, the pace of change has only increased, and the potential impacts of this change have increased in both scope and magnitude. So, it’s even more important today to incorporate emergent thinking into your strategy – in certain industries and markets, it is the single most important part of an effective strategic approach.
Create a roadmap for journeying into the unknown
The deliberate strategic journey requires a roadmap with a clearly plotted course for the work to be undertaken to keep it on track. Deliberate strategic activities are often complex, filled with cross business interdependencies and unfold over an extended period. Each requires its own strategy – its own roadmap.
The emergent strategic journey, on the other hand, requires a roadmap for identifying, selecting and undertaking the emergent activities that represent the best strategic investment. The five elements required in a roadmap for this kind of journey are:
- Establish your business’s strategic model by understanding: Who you want to be in the marketplace? How you want to be seen by your customers? What sort of workplace you want to create? Then determine the strategic foundation, goals and objectives that will allow you to manifest that model. On our metaphorical journey, strategic modelling establishes the destination you are seeking – it creates a beacon for directing all your strategic execution activities.
- Map out the Improvement Opportunities that will lead you to your strategic goals and objectives. These are the organisational qualities you want to create, improve or amplify – whether operational, product or customer service-focused. This allows you to link the business’s strategic objectives to improvement opportunities by responding to the statement ‘We could achieve thatif we did this’. If strategic modelling establishes the destination you are seeking, then strategic mapping sets out the waypoints to reach that destination.
- The best way to explore the business terrain is by identifying ‘projects’ that will allow you to realise your improvement opportunities. These strategic projects are not big transformational undertakings. They’re short-duration, hard-hitting activities that target a single specific strategic outcome – either on their own or as part of a longer program. The projects should be undertaken by a cross-functional team with the best understanding of the opportunity being pursued. Importantly, the projects you identify should be prioritised based on their strategic value.
- With the strategic projects identified and prioritised, you want to make an effective strategic investment by triaging the projects according to their priority and your organisation’s capacity to successfully complete them. For the selected projects, your project teams need to ensure their projects are effectively defined from four key perspectives: strategic context, the change you hope to make, the people required to maximise the outcome and the business value. In our metaphorical journey, this is where we select and provision the teams that will lead the business on this leg of its strategic journey.
- The power of a strategic journey lies in constantly assessing your direction to ensure it is creating the business’s future you aspire to. Therefore, your portfolio of strategic projects should be regularly adjusted based on previous project results, strategic priorities and emerging opportunities.
When done well, this strategic roadmap creates a clear linkage between your strategic objectives, the opportunities that will lead you to those objectives and the projects that will allow you to manifest those objectives. It allows your people to see the business value in the strategic work they’re being asked to do. It also imbues your strategy-making with action and purpose that delivers consistent progress and allows you to adapt at the pace of change in your business environment.