Two years ago in autumn 2019 I was helping a UK healthcare organisation with a ‘demand and capacity planning model’ to enable them to project what beds and staffing they should plan for over the next 3 years – the culmination of several months’ development to save them ‘reinventing the wheel’ every time their anticipated demand changed. They were looking forward to be able to plan more accurately and efficiently, with the ability to make revisions quickly and confidently as they went through their annual planning process and considered longer term clinical developments.
Three months later and everything changed: the crisis of COVID-19 required an urgent reconfiguration of how their facilities and resources were to be used. The model was still valid, and a valuable tool – but all their projections and plans had changed radically. 21 months later they – and the rest of us – are in an uncertain cycle fluctuating between cautious optimism and worry, continually revising our hopes and expectations and adjusting our plans to the best of our limited knowledge.
Whilst psychologically there is a yearning for a ‘return to normal’, realistically and objectively I’m not sure that’s ever going to happen, at least not in the absolute way that many might hope for. Such a seismic jolt to how we live our lives, individually and collectively, will inevitably change some of our behaviours and values: we will learn and adapt, and move on.
Organisations will change too. Although the debate in recent months has been on ‘working from home’ (for those who can) vs ‘return to the office’, and evolving ‘hybrid’ options, there are more fundamental questions in play about the nature of work and how this is organised. Add to this the challenge of tackling climate change, and the tectonic plates of this are starting to shift. No matter how much businesses (and some Governments) wish for a return to how things were in 2019, there is no going back.
How can organisations survive in such a changing and uncertain world? There’s a need for agility and adaptability, and the willingness and ability to think about possible futures – undesired as well as hoped-for – and to consider the consequences.
In this world organisations need a new approach to strategy. The ‘traditional’ 3-year strategic plan, developed in a one-off intensive project then implemented (often only partially) until the next strategic review, is no longer enough in such a volatile and uncertain environment. Strategy has to be more dynamic, more continual, more embedded in the ongoing work of the organisation: people throughout the organisation need to be more comfortable thinking and talking strategically, and the organisation needs to develop the strategic management processes to enable this and the culture to support it.
Strategy is about making sense of where an organisation is going and how it’s going to get there. It’s a journey, on which people embark together to explore and learn: it’s about perspectives, questions and conversations, including the ability to think about possible futures and the willingness to accept the consequent uncertainties and risks. The capability to do this, the processes to enable it and the culture to encourage it are critical elements in organisations adopting a more dynamic approach to strategy.
There are some key ‘building blocks’ that organisations need to consider to establish a more dynamic approach to strategy.
Firstly, the organisation might need to strengthen its ‘strategic capabilities’ (the capacity, knowledge, skills and ability to develop and implement strategy). There are three ‘levels’ of these:
- the ability of people to think, and talk, strategically – and the confidence and opportunity to do so (‘strategic thinking’ capability)
- effective processes to engage people in the discussion of strategy and consequent decision-making and implementation, and the ability to facilitate and manage these (‘strategic management’ capability)
- an ability to achieve consensus for how and when to use such processes, and the confidence that these will work well (‘strategic leadership’ capability)
All three of these capabilities are required – and they are mutually supportive in developing the organisation’s approach and abilities in developing and implementing strategy.
Secondly, a stronger focus on the future is essential – the possibilities and their implications, the opportunities and how to realise these: strategic planning is no longer about linear projections extrapolating what is known. Futures thinking is an essential skill – the ability to consider possible futures (desirable and undesirable) and think through the implications and what this means for the organisation now. Organisations also need to work through how they will accept and deal with uncertainty, including assessing and managing strategic risk and embedding an agile and adaptive approach so that they can respond dynamically to changes and opportunities. Incorporating this into their strategic management processes is vital to begin to anticipate and think through what might affect the organisation’s future and how it will deal with this.
The third key element is to establish a culture that enables and supports such an approach to strategy, encouraging the strategy conversations and processes as an ongoing part of how the organisation functions and engaging people throughout the organisation in this. The ability of the organisation to learn is vital: strategy is not just about the techniques and tools that can be used in analysis and formulation, it’s about what is learnt – collectively – from what is encountered, and then remembering this and acting on it – and applying that learning in future. (Henry Mintzberg has stated that strategy is more about learning than it is about planning; the ability of an organisation to learn is the key strategic differentiator.)
So how do organisations start to develop such a more dynamic approach to strategy? Assessing the current situation and considering all the elements of this framework as ‘building blocks’ is a first step: what is the organisation’s approach to strategy, and how might this need to change (including how it thinks about possible futures and deals with uncertainty)? Does it need to invest in strengthening its strategic capabilities, and if so which? Is the culture sufficiently supportive and engaging to enable such a more dynamic approach to strategy, and is the organisation willing to embark on its strategy journey with an openness to learn?
Considering these questions, and having an open conversation around them, provides a starting point for the organisation to develop a more dynamic, adaptable and agile approach to strategy that will strengthen its ability to deal with the future.
Leading strategists have been advocating a more ‘ongoing’ approach to strategy for several years, but it has been difficult to shift actual practice from the traditional ‘3 year strategic plan’ model. Some organisations are now beginning to realise that a more dynamic approach is required, and they are investing in developing and strengthening their strategic capabilities to enable this to happen.
The approach to strategy is changing, there’s no going back.