Getting Ready for StratOps

Michael Hanf
Executive Partner
April 13, 2021
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Key Learnings (if you read nothing else, read this)
  • StratOps is a new strategy framework that interlinks strategy development, strategy execution and a company’s operating environment to make the company more resilient and adoptive to change
  • While StratOps is a holistic concept, different organizations will choose different paths to realizing its benefits holistically or by selecting specific elements.
  • The tools and techniques used in the StratOps framework are not new, and they have been around for some time. Some of the most considerable value from StratOps realizes by integrating them into a model that brings together strategy development, strategy execution, and the continuous monitoring of the operating environment.  
  • StratOps can only be successful if the broader organization is on board and if processes, tools, and people support the continuous, agile adjustment of the strategic direction the organization is taking. This requires the involvement and support of different functions, units, and teams and active dialogue among them.
  • While the StratOps framework is important to consider, the organization's mindset and leadership are critical. At its core, StratOps is about understanding to look at the world around us in a new way and to accept that we do not have all the answers about what the future brings today but that often we learn and adjust as we go.

The past year has shown how vital resilience and agility are for companies today. Sudden changes in the operating environment can make thoroughly developed strategies useless in a matter of days.  

StratOps, the model that tightly integrates strategy development and execution, provides a blueprint to address some of the major challenges traditional strategy models hold in these fast-changing times.  

As a key element, StratOps builds on rapid feedback loops that link the strategic frame that is set in the annual strategy process with the actual project portfolio that implements the strategy and the broader operating environment.

In this article we will outline the main barriers that prevent organizations from adopting the StratOps methodology and how to overcome them to unlock the value of StratOps for your organization.

Figure 1: StratOps Model

You can read more about the StratOps model in one of our earlier articles.

Change is not easy.

Today most companies have well-established Strategy development processes that strongly interlink with how the broader company is being steered and operated. While the traditional approach to strategy has many downsides, as outlined in our earlier article “Traditional strategy vs. StratOps," it is not easy to change it overnight, as it is at the core of the company.  

Some of the obstacles you might face when considering implementing StratOps are:

  • Change resistance – Most organizations try to keep the status quo and oppose change. As a result, a major change in the strategy development and execution process might be seen by many as a threat or an “impossible thing” to do, which will raise resistance to the change.  
  • Operating model & Governance – As mentioned before, the strategy process is often tightly integrated with other parts of the operating model and governance, e.g., budgeting, performance management, business architecture, and capability management. Changing the strategy process will require these integrated functions and related activities to be considered and changed simultaneously.  
  • “We’ve done it before” mindset – When talking about StratOps, we often hear people state that they have already tried or are doing all the things that form the StratOps model. Such mindset often leads to a rejection of the new approach as it is labeled as to be "proven to be unhelpful." While the tools and techniques that form the foundation for StratOps are not new, it is about putting them together into the right overall frame that delivers the organization's impact.
  • Tool first approach – Given time constraints and requirements to move fast, some organizations choose a tool first approach, which shifts the discussion from an organizational/behavioral level to a technical level. As a result, the focus is often on selecting the right tool rather than change the overall organizational mindset and approach.

This article will outline some of the key considerations that enable a successful shift towards the StratOps model.

Key Considerations and Possible Actions

There are several key elements to consider when approaching the shift towards the StratOps model and overcome the before mentioned obstacles to becoming a more resilient and dynamic company:

Establish a continued dialogue on the future  

The discontinuous nature of the operating environment raises the need for leadership teams to have one eye on the future while steering the company in the current environment. In the more stable past, such demand could be satisfied with the occasional foresight workshop. In today's fast-paced world, such foresight needs to be closer to execution. Leadership teams need to establish a continued dialogue on trends and their impact on their strategic choices.  

Possible actions to get started:

  • Establish a practice of continuously scanning the operating environment for new and developing trends that might impact the organization's strategic direction.
  • Schedule recurring meetings for the company’s leadership to review and evaluate key trends and developments in the operating environment to identify the potential impact and needed adjustments in the organization's strategic direction.
  • Engage in an active dialogue with the ecosystem, including customers and partners along the value chain. This will allow the organization to understand trends originating from within the value chain early with a possibility to adjust and react.

Engage “the field” in a frequent and continuous feedback loop  

Gone are the days when top leadership could be expected to have a superior vision of the company's future than the people out in the field. The tell-tale signs of changes with potential impact on any company's future success are increasingly seen first by "the field." Hence, leadership teams need to engage all employees across the organization in a frequent and continuous feedback loop to validate the strategic frame and evaluate how their strategic choices are translating to operational success.  

Possible actions to get started:

  • Schedule monthly feedback sessions on the unit or team level to enable and encourage all employees to take an active role in the strategy development and execution process by actively collecting feedback.
  • Set clear expectations as part of the employee performance management process that people are encouraged or even better required to provide feedback on the company's strategic direction when things work well but even more so when things don't work out.

Redefine your measurement system  

As business requires more frequent steering, you need to update your measurement systems accordingly. A focused Performance Management System, e.g., utilizing OKRs (Objectives & Key Results), is critical to measure and track the organization's progress towards the set strategic goal within the strategic frame. The measured KPIs (or OKRs) should include both quantitative and qualitative measures that are linked to the strategic goals set in the strategy process and enable the organization to adjust and navigate its path.

Possible actions to get started:

  • Define and measure KPI (Key Performance Indicator) with a clear and direct linkage to the company's strategic goals and objectives, making sure employees understand how they are expected to contribute to the company's success.
  • Follow-up on the achievement of KPI frequently involving people from strategy development and strategy execution (e.g., project managers of transformation projects or other key initiatives)

Break down silos  

Organizations are designed for a specific situation. When such a situation remains unchanged for extended periods, it is often beneficial to increase the organization's level of specialization. However, when the situation changes, it will most likely imply a need to change how a company is organized to operate in it. Hence, in today's operating environment's dynamic nature, the most successful companies break down their silos and wrap themselves around the emerging situations in a way that brings all their capabilities to play seamlessly.  

Possible actions to get started:

  • Enable and encourage a strategic dialogue between different units, functions, and geographies, e.g., by scheduling monthly cross-unit strategy forums or specific cross-unit working groups.
  • Find and actively manage interdependencies between various parts of the organization and set common, cross-unit goals and KPI.

Embrace a culture of change and continuous learning  

We assume that the discontinuous nature of business is here to stay and will only accelerate. Hence, we believe that any organization will benefit from embracing a culture of change and continuous learning. While this new culture can create an increased level of uncertainty for employees, it can also create new opportunities to learn and grow. As mentioned before, change, let alone continuous change, is often seen as a threat, so change and people management have a critical role in providing the secure, stable environment needed while enabling the required flexibility and mindset for the culture of change and continuous learning.

Possible actions to get started:

  • People feel better about change once they understand why change is required and why it is not scary but rather a positive thing. Therefore, make sure to overcommunicate about what it takes for the company and each individual to succeed in the ever-changing operating environment most companies are facing.
  • HR plays a critical role here. Building the right capabilities, setting the correct targets, and providing the needed support for employees will take a crucial role in enabling success in these fast-moving times. The company that has the best-prepared employees will be able to react fastest to change external factors.

Getting Started

Considering the above dimensions as well as the broader requirements to the organization for establishing the StratOps model, we see companies take three distinct approaches:

  1. Greenfield – Companies choosing this approach start by developing a new strategy model/approach and implement it, disregarding the earlier process. While it enables realizing the StratOps model's benefits at an accelerated pace, this approach is exceedingly difficult to implement for companies that have a very established and integrated strategy process.
  1. Focused pilot – Starting to use StratOps in a focused, specific sub-part of the organization, e.g., a business unit or function, to test and trial the approach before rolling it out to the broader organization. This approach allows a stepwise implementation where the organization's fast-moving parts can shift faster to the new model. In contrast, other parts might follow at a slower pace or once the pilot has been concluded.
  1. Tweak and develop – Keeping the old strategy process and approach while adjusting and developing it towards a more agile model reflecting the key elements of the StratOps model. While the impact that can be realized is limited or reduced to a much slower pace, this approach can be good for companies with a very established and integrated strategy process to "get people on board." Once minor adjustments show the first value, the readiness to accept and implement more significant changes to the strategy process will increase.

Conclusion

While StratOps is a holistic strategy framework, every organization will have its own path to implementing the framework and taking it into use. For that reason, it is critical to understand and verify the current strategy process/model to understand how a transition towards StratOps could work. In our work with clients, we have noticed that the paths are as different as the companies. For some, it makes sense to adjust the current process step-by-step while other companies are looking to pilot the new model in one specific unit or function.  

Independent of the path you are taking for your organization, it will be critical to involve the broader organization. StratOps is not about the tools and processes but about the mindset that enables the organization to adapt rapidly. StratOps is about understanding to look at the world around us in a new way and accept that we do not have all the answers about what the future brings today but that we often learn and adjust as we go.  

If you are interested in learning how StratOps could help your organization become more agile and resilient, book a meeting with me.

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