A Strategy Making Process for Todays Uncertain and Turbulent World
by Michael S. Goree and Eric Craymer
Look around you. In every industry, in every organization, in every country, change is now the norm. Change is rapid and drastic. A wrong move or a slow response can mean serious injury and even death to your organization. All indications are that this condition is only going to accelerate over time. The environment around you has evolved into a more dangerous and less forgiving place. To be successful, to survive, your method of strategy making must also evolve. You must become flexible, fast, and able to foresee outcomes before they happen. Strategic Thinking is the way to do it.
Strategic Thinking is a strategy making process, not a strategy product. In the past, strategy was typically left up to a few top managers who met once a year, published a report that no one looked at or saw, and then made plans to meet again next year. One organization we worked with would not let us look at their strategic plan. When asked, they said that no one gets to see it, including management and staff. This type of strategy process does not provide direction to the organization or prepare staff to make decisions that will further its purposes and be in its best interest. Strategic Thinking is about spreading strategic knowledge and decisions throughout the organization.
In a world of rapid and drastic change it is important for those closest to the point of implementation to be prepared and willing to make the decision. Uncertainty is very high in areas of high impact and it is impossible to predict outcomes let alone responses. There is not time to pass the decision up the management chain. Everyone in the organization, CEOs, managers, and key staff, must have the knowledge and the tools to think and act strategically. Strategic Thinking practices offer ways in which to transfer information about strategic direction and purpose, competition, and customers to and between all team members.
Strategic Thinking is not a "thing" that you do, it is a way of doing things. It is a set of several component practices, not a single process or formula. These include understanding organizational values and purpose, developing a systems view, modeling, distributing decision making to all levels, and holding strategic conversations. Not all of the parts have to be present for Strategic Thinking to occur but it is better to have as many as possible present. When used together the parts join synergistically to create an organization that practices Strategic Thinking.
The primary component is a strong sense of the organizations values that is shared by all. If decisions must be made at all levels and if circumstances change so quickly that there can be no standard operating procedure, a strong base for making those decisions is needed. Each and every member must understand what the organization stands for and what it is trying to accomplish. Decisions can then be made using values and purpose as the criteria. When opportunity or challenge emerges that requires immediate response, a choice made true to the core values and purposes will be a right choice. (For more on values and strategy see "Values and Knowledge; Critical Elements in the Strategy Making Process" in the last issue of this newsletter.)
In order to make the right decisions it is also necessary to hold a systems view. Complex systems, which is what any organization or environment today is, work in a different manner than we have traditionally been taught. In complex systems there is rarely a direct cause and effect and no part of the whole can act without causing a reaction in other interrelated areas and units. It is necessary to discover and understand these subtle but powerful relationships before making decisions. Instead of a straight line from A to B, thinking and planning becomes more like a web.
Modeling is one way to understand complex systems. Our decisions are based on our own mental models of how we think the world works. They are often hidden. Being hidden, they are not questioned and can contain many false assumptions or failures of logic. In addition, future developments in a complex and swift environment are harder to predict. Modeling is the process of making a simpler and smaller version of a system that will approximate its behavior. It can be accomplished through conversation, on paper, or in computer simulation. Through modeling it is possible to reveal underlying reasoning and project future developments.
Distributed decision making is the means to fast and knowledgeable decisions. Decisions must be made as close as possible to implementation in a rapidly changing and unpredictable world. The only way to achieve the required flexibility is to trust those closest to the action to make the decision. This also greatly increases reaction time. To make decisions at that level requires that individuals must be provided with the knowledge, the tools, and the trust to do so.
Strategic Conversation allows the sharing of information at all levels and provides knowledge for decision making. Because of distributed decision making there is an ongoing series of responses being made based on the individuals understanding of values, purpose and strategic direction. Because this happens at the point of impact and without consultation, there is continuous need for updated strategic information; top-down concerning critical shifts, bottom-up concerning customer and competitor information, and laterally concerning strategies and tactics that have been successful. To avoid costly mistakes it is necessary to test our assumptions and thinking through colleagues with alternate perspectives. To accomplish this, the entire organization has to be involved in Strategic Conversations, ongoing dialogues about strategy that take place at all times and levels.
How can an organization start to practice Strategic Thinking? Assembling the components takes time and effort but it can be started on a small scale. Even adjusting your own personal method of decision making is a beginning. At an organizational level the strategic planning team, a small cross functional team, or, in very small organizations, the entire staff can participate in strategic exercises and/or planning utilizing the components. Scenario Analysis, the topic of our next article, is an excellent way to launch the process. Ultimately you must adjust the way you think about strategy, spreading strategic knowledge and responsibility through all levels of the organization, creating shared meaning and conversational opportunities, and practicing, practicing, practicing.
An organization that practices Strategic Thinking is prepared to cope with todays world. When we are joined in a shared sense of purpose and by shared core values, it is possible to move strategic decision making to the edge where all of the action is. Because everyone is armed with strategic knowledge and tools, decisions can be made quickly. Because all individuals are involved in making strategic decisions they establish personal ownership in the success and failure of the organization. Strategic Thinking can provide the flexibility, speed, and agility to keep pace with the evolving change and uncertainty in customer demands, technology, and competition faced by everyone.