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Five-year strategic plans were the norm a couple of decades ago and strategic savvy was a must-have competency for the chief executive. But the pace of technological change, disruptive innovation, globalization, demographic shifts, economic disequilibrium and the rapidly changing, always emerging competitive landscape have rendered older strategic planning models that relied on a somewhat predictable future and relatively stable competitive forces painfully inadequate.
Unfortunately, no other model has penetrated the main stream of business and, as a result, strategic thinking capacity has atrophied across the board. Somehow, the concept of strategy as we knew it has become incompatible with the flux of today's business world.
Start-up culture is infatuated with pivoting, the process of working through successive ideas, leveraging what works and discarding what doesn't until a viable result is achieved, as a legitimate way for organizations to stumble upon a successful path. Agility is the new must-have. The rising popularity of the start-up culture has brought this concept into the mainstream, Newer models of strategy, such as David Teece's, Dynamic Capabilities model, which emphasises that an organization must be able to build and reconfigure its internal and external capabilities if it hopes to address changing environments, are anchored in the organizational and team ability to learn (or rather, to remove learning dysfunctions, entrenched assumptions and unchallenged world-views) and to make sense of what's happening around them. It's about learning, adjusting, and ultimately, the possibility of transformation.
In a rapidly accelerating world, chasing revenues and sales at any cost becomes the default most-viable activity when there is a lack of broader strategy. Good sales people are in demand and are increasingly being given top jobs. But achieving greater sales now through excellence in salesmanship is not the same as figuring out the best way for an organization to compete successfully over the longer term. Pivoting is deeply damaging when it gets out of control and becomes about throwing stuff up the wall to see what sticks. Relying solely on great ideas, even though they are plentiful, is not necessarily a good strategy. Short-term tactics are necessary but are not a replacement for building a capacity for sustainable growth.
We need to adopt new models of strategy development, ones that are better equipped to deal with the ambiguities of today and the uncertainties of tomorrow. In the post-industrial era where technology is diminishing barriers to entry, intangible assets such as organizational curiosity, know-how and imagination become more valued.
Strategy has come closer to operations and is, in some cases, indistinguishable from it because the emerging customer sentiment can be seen more quickly in the every day. But operations often lack capacity to evaluate new insights. In my past consulting, I often practiced the model of Strategic Agenda, which is a tight list of strategic priorities, actions and initiatives arrived at the end of a process and analysis, so that it does not become an unqualified laundry list of wishes.
Precisely because of the complexity of the environment, strategic thinking, which is disciplined thinking first and foremost, is required to prevent mindless loss of energy, momentum and resources. What are the most important reasons for strategic thinking? To create or take advantage of opportunities, develop criteria for evaluating options, to be proactive instead of reactive (reaction is usually not a sustainable strategy) and to facilitate alignment, synergy, empowerment and accountability.
How do we go from "great idea, let's go for it!" to a more rooted understanding as to why an idea is worth pursuing? In the absence of a "big plan," how do we bring more strategy into every day?
Here are some key questions to ask:
1. What is the competitive value proposition contained in the idea? To me, thinking about a value proposition is as vital as ever as it is the evidence of addressable market and its size.
2. What are the hidden assumptions behind this idea – can we pull them out and examine their validity?
3. Does it give us competitive advantage that can be sustained? It's okay to do short-term things but don't be surprised by their short lived value. It's important to believe an idea can potentially make us robust against any scenario but the most important thing is to contemplate how and why an organization can sustain the provision of a competitive value proposition.
4. What are the resources, and even more importantly, what are the critical capabilities, and new know-hows needed? What do we need to learn, change or develop, in order to pursue the idea successfully?
5. What are the key constraints and implementation issues and how easily can they be overcome?
6. What are other potential benefits (brand and knowledge enhancement, partnerships, adjacent future opportunities, etc.)?
The main benefit of disciplined thinking is that it grounds us and help us be more proactive. Being proactive eliminates short-term noise and enables us to envision a future, rather than reacting to today.
Marina Glogovac is president and CEO of CanadaHelps in Toronto.