Traditional strategy vs StratOps

Michael Hanf
Executive Partner
January 21, 2021
Tags:

Traditionally, the management team of a company would retreat to a nice offsite location for a weekend or two equipped with a suitcase (or more recently a laptop) full of historic financial graphs and data to figure out what the future of the company should look like.

These strategy retreats were repeated on an annual or bi-annual basis and produced lengthy presentations that extracted future predictions and developments from historic numbers. More often than not this process was “outsourced” to an external consulting organization that would come in, interview the CEO then go away just to return with the company strategy a couple of months later. Granted this description might be an exaggeration and companies have developed more elaborate approaches, but the underlying principles still hold.

The bad news is, this process is not fit for purpose any more and to position your company for success in today’s fast-moving world, a different approach is required.

Strategy traditionally

The traditional strategy process shows 5 key characteristics:

  • It was inwards directed, looking for solutions within the company, and often focused on developing a vision of what the company wanted to be and how to convince people outside of the company that this was exactly what they needed. The broader ecosystem of partners and customers only played a secondary role: receiving whatever the company decided to become.
  • In this model, the strategy is only for a chosen few and the process is C-level driven. The CEO together with a small team of insiders (which could be company executives or external advisors), come together and define and outline the future strategy. Employees are involved after the fact when the shiny new strategy is revealed to the public.
  • While the world is moving fast, a strategy process used to take time, often anywhere from 4 to 6 months. They were very lengthy and followed a very strict, defined process from an initial collection of historic financial and market data to the executive retreat to “finalize the strategy”.
  • Understanding the future is critical to make the right decision. Despite that understanding traditional strategy is backward-looking, often building on historic financial data and market performance to extrapolate future trends.
  • Finally, one of the specs of the traditional strategy process is its frequency. Run once per year in a standardized process, the strategy is developed in the same way every year repeatedly, even though the operating environment can change fundamentally.

The celebratory release of the top-down strategy is often received as a predetermined action plan allowing for no or very little adjustment when new information is discovered, or new developments are identified “out in the field”. ‘

As the world is changing fast, requiring companies to rapidly change direction to address changes in the operating environment, we came up with the concept of StratOps and Dynamic Strategy.

StratOps

To enable the strategy process to correctly reflect customer and market demand, the strategy process needs to be customer-driven and ecosystem-centric. What this means is that customers, suppliers, and other ecosystem actors need to be an integral part of the strategy development and execution to enable a maximum return for the company.

  • At Taival we believe the strategy development process is an integral part of the change journey of an organization rather than a precursor. Therefore, the strategy process needs to be inclusive and cross-organizational, involving employees along each step of the journey to ensure people understand why the strategy and the transformational path makes sense and is valuable for the company and each individual.
  • As the world moves at an accelerated pace, it is critical to develop and execute a company’s strategy at the same clock speed. Therefore, in StratOps we follow an agile, dynamic strategy approach that works with rapid 2-week sprints that allow for rapid adjustments based on actual learnings.
  • Strategy is not a one-off activity anymore but rather a continuous process. An initial strategy development cycle that defines a company’s strategic goal or North Star and alternative scenarios to get there, is followed by a continuous review and calibration of the strategy. The strategy process is kicked-off once and never stops to allow for continuous adjustments and revisions as the operating environment, market demands, and customer preferences change.
  • Finally, the StratOps approach follows what we call a future back model. In this approach, we identify and evaluate different possible futures and what role the company could plan in these futures to derive likely scenarios. Looking at the company’s capabilities we then map out different paths the company could take to reach this future goal or North Star. By continuously revising and adjusting the strategic direction, the company will progress towards the set target through different paths, depending on the changes in the operating environment.

Conclusion

While in the past, the traditional strategy approach served companies well in establishing a structured path towards the future in a stable and slowly changing operating environment, the new, faster pace of today’s world requires a fundamentally different approach.

The tools that today’s Strategists need to master are focused on enabling companies to set compelling, ambitious goals while providing the required speed, agility, and precision to adjust to new requirements and changes in the operating environment in real-time. This requires shifting the strategy function from a process-driven organization that runs a strategy process once per year towards an organization that steers the strategic direction of the company in real-time and enables the company’s leadership to make adjustments whenever required.

The Head of Strategy of one of our clients told us that the traditional strategy houses are very good at writing 100-page presentations with all the details about their business that they already know. It’s the confident exploration of the unknowns that are not in those 100 pages that is much harder to get from the consulting market. We developed the StratOps approach to explore these unknown unknowns and to provide tools to navigate the uncertain future.

Through our work with different clients across industries, we have learned that the step towards StratOps can enable companies to take a different look at their future while enabling them to steer clear of any “icebergs” that might block the way to the desired future position.

Subscribe to our email newsletter to learn more about the StratOps approach:

Tags

Want to know more?

contact us