A few weeks ago I presented an online Masterclass for a University Management School about ‘Strategy in a time of uncertainty’, and some of the questions set me thinking about the different ways in which people and organisations approach strategy. The questions were all relevant and led to some good discussion, but what I found particularly interesting was what they implied about how those asking them were thinking about strategy.
Some of the questions focused on the mechanics of developing a strategic plan: data inputs, fitting the process to the annual planning cycle, financial projections, measuring progress with appropriate KPIs and reporting structures. Here strategic planning is viewed as a project, with a focus on the quantitative – data, analysis, projections, outputs, measures – and the organisational processes to support this approach. Deadlines drive the process, with various workgroups tackling different aspects of the plan and their outputs being synthesised into a strategic plan document for final approval. There is some engagement, both in developing the inputs and consulting stakeholder groups – but often this is a part of the project process rather than a deeper involvement.
Such a mechanical approach to strategy can of course be effective, especially when the emphasis is on planning in a more predictable environment. It is less suited when there is significant uncertainty and the situation is more volatile, or when there are issues that need more depth to really understand and work through. Considering future scenarios and working out the implications requires structured creative thinking to develop narratives about possible futures. Also, a ‘task and finish’ approach to completing the project on time can be at the expense of achieving engagement and understanding across the organisation – there isn’t the flexibility to invest time for these.
Although this ‘cold’ approach to strategy can have its limitations, it is still much more effective than being ‘lukewarm’. This is where the need for a strategy is recognised, but the organisation fails to devote sufficient time or expertise to produce an effective result. Fundamental issues are not identified or resolved, potential negatives are avoided, the organisation might rely on a ‘Awayday, SWOT and document’ process – a box is ticked, but the outcome might be of little value, especially if the organisation encounters changes or obstacles.
Increasingly, organisations are developing ‘hot’ approaches to strategy. The emphasis is on insights and understanding, so people throughout the organisation can make sense of where the organisation is going and how they can contribute to it getting there. Strategy is managed dynamically, so the organisation is able to respond and adapt as circumstances change; and it has invested in developing the strategic capabilities to enable this approach: strategic thinking, management and leadership. Strategy is part of the everyday thinking and conversations across the organisation, with continual learning at both individual and organisational levels: it’s an important and exciting journey, involving everyone.
Of course, no one approach to strategy is necessarily ‘the right one’ for every organisation and situation: much depends on the context, the experience of strategy of leaders and the organisation, and the culture of the organisation. But whether cold or hot, strategy is vital – and even organisations with lukewarm approaches can learn and improve!