A New Strategy for a Continuously Disrupted World
Organisations need to embrace agile emergent loop strategies to succeed in a disrupted industry
‘All that is solid melts into air.’
Karl Marx nailed the 2010s with the above statement. Certainly everything we thought of as solid is melting away. Geopolitical, economic and environmental change is firmly on the agenda and there seems to be a way to go before anything settles down. Similarly, the digital rampage continues with once stable industries being disrupted from all angles, as well as our daily lives being continually questioned, rethought and relaunched.
How should organisations plan ahead in a continuously disrupted world? How can they be certain the decisions they are making now will be right in the next few months, let alone the next few years? Is there any point in trying to develop a strategy in a time of such great macro flux?
The word strategy generates a lot of negative press these days, and deservedly so. It is overused and misused in so many different ways that it is in danger of becoming meaningless, which would be a disaster. We need strategy now more than ever. Not the generalised, static, unimplementable strategy that sits in old ring bound documents under the CEO’s desk — but the active, emergent, agile (with a small a) strategy that drives today’s decisions through an executable vision of the near and not so near future.
But how can a strategy that flexes and changes over time be a strategy? If strategy is to be implemented, doesn’t it need to be static for long enough for it to be implemented?
Standard ‘event oriented’ linear thinking would have it so. You define D, and then, much like World War 1 soldiers going over the top, keep running into the A, B, C of the machine guns until strategy end point, D, is reached. Success or failure are then measured. This worked well enough for some in much less changeable times like the 1960s and 70s. However, the Digital Revolution has changed the world, and it has only just begun. For the type of continuous change organisations are facing today, linear thinking is not going to work to drive the kind of innovation and transformation that is now needed. Creating the business equivalent of Khrushchev’s 5 year plans, and then implementing them no matter what, is the surest way to see the end of a company in today’s unforgiving markets.
Luckily there is a new emerging strategy fit for this new world called Loop Strategy (as part of a Loop Transformation). Loop Strategy thinks in loops rather than straight lines. It has emerged from a combination of Systems Thinking and Design Thinking and it has three key elements at its core that are critical to its success — a dynamic realtime feedback loop, an agile and rapid innovation execution capability, and an authentic and purposeful vision.
The need for this type of strategy in today’s business environment is obvious. In today’s markets, organisations that cannot adapt quickly enough to new technologies and customer behaviours through rapid execution of innovation are left behind. The ability to implement strategy at pace, and react to changes in the market almost instantly, is now a key to survival. But, an agile executable strategy without a vision is just a strategy of reaction. Organisations need to be able to make fast decisions in their markets, but all those decisions must drive the company towards a successful future. That successful future is represented by a vision, which becomes the Northstar for the organisation. It shows the way, and keeps the company on track even in the biggest of storms. And this vision must be created, visualised and baked into its DNA.
Vision is core to Loop Strategy. Much like strategy though, vision as a word and a tool has been maligned, and again for good reason. The practice of painting a generic vision statement on the office wall has not worked, and does not drive decision making. It becomes meaningless and can help feed inauthentic cultures and behaviours, and ultimately leads to purposeless reactive strategy. But the correct vision, developed through the correct organisation internal programmes that build commitment (rather than compliance), will identify the gap to be closed, and the journey that must be travelled to get there.
A true vision is a complex combination of analysis and synthesis. It becomes the guard rails for the organisation to play in. It is the framework within which the employees have the freedom to work and achieve. Ultimately, it is the sense checker for today’s decisions — delivering an assuredness and belief in the direction the organisation is going and preventing behaviours and decisions which will lead it down the wrong paths.
But, how can a 3 to 5 year vision even hope to be correct, if the world is continuously changing? It doesn’t need to be. Rather than the vision identifying actual co-ordinates for the strategy to deliver to, it identifies principles of behaviour for the company to adhere to and strategic territories within which the company will innovate in. The operational execution loops feedback to the strategy, and if necessary the strategy is modified within the guard rails of the vision. The strategy becomes emergent. In the event of major unforeseeable change, the vision, and the guard rails that lead the strategy, will be changed — but if the vision work has been done correctly the vision should still define and drive the company journey, even within continuously changing markets.
Ultimately, much like the cat in Alice & Wonderland said, to get anywhere we need to know where we are going, and plan our routes accordingly. Organisations today cannot know the future, but they can know where they are going and plan how to get there. Strategy is about decision making, and how those decisions plot a coherent direction. How successful they are depends on how informed we are when picking the correct routes to the vision, and how flexible we are to quickly change routes when we need to.
Much like climbing a mountain, the only correct route to the top is the one that gets you there. Being able to try different routes, and dynamically react to obstacles and failures, is the key to reaching the summit.