It has been more than 20 years since an article title “Strategy Under Uncertainty” by Hugh Courtney, Jane Kirkland and Patrick Viguerie was published in the Harvard Business Review. But what if the speed of change accelerates to the point where uncertainty is the new normal? How do you make sure your strategy is not stuck in the past but rather considers the opportunities, challenges and threats of the future? How are you ready for a black swan like the corona crisis, or are you ever?
One of the reasons we established Taival three years ago was the understanding that the way we do strategy has to fundamentally change. Inspired by the service design methodology that back then took the world by storm, we developed a new, dynamic strategy development framework that we have since then been shaping and developing further.
The Dynamic Strategy Model builds on several key principles that contrast the traditional strategy process:
The Dynamic Strategy Approach
The Dynamic Strategy approach builds on a rapid, iterative development model that utilizes the sprint methodology:
Sprint 1: Vision Statement
During the first sprint, we are looking to understand the company’s operational environment as well as key global and local trends that will influence the future positioning of the company. Utilizing this input, we develop the future vision / identity which will be the guiding North Star for the company’s future.
Sprint 2: Strategic Options
Once we understand the future vision / identity of the company that is shared by the leadership, employees, key stakeholders, customers and ecosystem partners, we move on to identifying the strategic options the company has to reach this vision. This phase includes scenario planning and developing an understanding of the probability of specific strategic options that the company has. While we make decisions to pursue some strategic options and disregard others, this part of the process provides critical input to the continuous strategy revision process described later in this article.
Sprint 3: Roadmap & Budgeting
Once we understand the goal of our journey (the vision / identity) and the strategic options we will pursue to get there, we will proceed to develop an actionable roadmap that takes into consideration e.g. capability gaps that need to be addressed, initiatives in operations and market facing activities that need to be started as well as concrete measures on how to measure success. Often sprint 3 is followed by an additional, optional sprint that focuses on defining or re-defining the KPI (Key Performance Indicator) or OKR (Objectives and Key Results) model for the company.
Our approach for this transparent, holistic strategy process follows the double diamond model. In line with the familiar concept of design thinking, we involve employees and key stakeholders in order to lay the groundwork for the implementation of the strategy process.
The role of the ecosystem
While strategy in the past was an inward directed exercise that focused on understanding where the leadership and ownership of the company want to see the company in the future based on historic data and experience, we believe that successful strategies go beyond the walls of the corner offices and actively engages with employees, ecosystem partner and customers. Therefore, the dynamic strategy process utilizes tools like user / customer journey’s and broad ecosystem ideation sessions to think strategy from the outside in.
From one-off to continuous process
As uncertainty becomes the new normal, we need to rethink the strategy process. Shifting our approach from an annual or even bi-annual strategy renewal cycle towards a continuous strategy renewal process within the organization. What this means is that companies will not run their strategy renewal only once per year in a set annual process but rather take on an active, scenario-based approach to strategy that allows for a dynamic strategy approach. Evaluating chosen scenarios on a monthly, if needed weekly basis to make required adjustments. As such, the Chief Strategy Officer will continuously review the changing external environment, forecast future scenarios and adjust the strategic direction of the company under the guidance of the CEO and the Board of Directors and in close cooperation with their C-level colleagues. For further details also see the article “Strategy 365”.
So, independent of what the path to the new normal after the current or the next crisis will be, one thing is for sure, uncertainty will be an integral part of the new business reality for some, if not all companies. Addressing and mastering this uncertainty will require a new way of strategy development and execution. One that takes into consideration the future outlook rather than historic financial and non-financial data and experience. One that looks forward into the future, defines the guiding North Star for the company and explores different paths towards that final destination.
The Dynamic Strategy framework can help on this journey towards the new normal in strategy development and execution and we are happy to discuss and provide more insights on the tools and approaches we have utilized in our past projects with companies such as Technopolis, Motiva, Fonecta, Altia and many others.