Arkaro recently ran a LinkedIn Poll to understand "What is most frustrating about your strategy process?"
Poll results highlight agility but are other issues are reported…….
- 32% of respondents supported that statement “It is not sufficiently agile to adapt to the marketplace. Often an annual process, tightly linked to the budget“
Indeed there was a comment “An annual process actually would be a major improvement at firms who are still in a 3-5 year strategy cycle”! Infrequent review and update ensures that strategy “is a document kept in a drawer but not a working document influencing the organisation”.
And when tightly linked to the budget process focus is given to excel sheets and forecasting, rather than making choices on what to do (and not do).. “My experience is that during a strategy process no real choices are made and that subsequently the execution is flawed….of course smaller companies may struggle even setting a path forward”
So why is this happening? Experience would suggest that the strategy process is so heavy the organisation cannot cope with a more frequent review. Inspired by Eric Ries’s “The Lean Startup” thinking the answer could be a “Minimum Viable Strategy” designed in Agile-like Sprints and adopting a “Build, Measure, Learn” mindset enabling frequent review and adaptation.
- 24% align with “Do not have the available expertise to develop strategy effectively”
In modern lean organisations, it is perhaps no surprise that available expertise to drive the strategy process is limited. Hiring external expertise is a solution, but care is advised. Instead of the “do it for you” external consultant approach, the “do it with you” method is recommended. This approach ensures the team has ownership of the strategy but is guided by external objectivity to secure a quality outcome.
In a related comment, another frustration was the “Inability to focus organisation around common understanding of language of strategy” which can of course be addressed with external expertise.
- 24% voted for “People do not have accountability for achieving goals. This may be because they are not adequately involved in the design to create ownership, or performance metrics do not drive appropriate behaviours.”
The importance of engaging the team in strategy design has already been highlighted.
It is not enough to have high level objectives and goals. Plans with metrics and sub-goals should clearly identify accountabilities and reviewed regularly in management rituals such as Integrated Business Planning (or S&OP) monthly reviews top drive the right behaviours. Far too often this discipline is missed creating the divide between strategy and execution.
- 20% felt that the most frustrating aspect of the strategy process was “Goals and objectives are identified, but limited guidance on how to achieve them, again impacting execution.”
As identified in the article “What is the definition of strategy?” sadly for many the process gives the organisation high level aspirations, but the team is left to work out for itself how the goals should be achieved, leaving a low likelihood of aligned cross functional execution.
One key insight of the Emergent Approach™ is understanding the critical distinction between the aspiration (“What Matters”) and the strategy (the central and unifying rule that guides “What you can do?”). The Emergent Approach to Strategy™ has the following definition;
A strategy is the central rule of a framework,
designed to unify all actions and decisions around
busting the bottleneck to achieving the
With such rules, or policies, established the organisation is given real-time guidance to aid choice making during execution. Tactics are also rules for lesser aspirations.
Some additional frustrations were shared by respondents.
- “Trying to implement a modern strategy within an old fashioned culture”
This is likely worth further review, but perhaps this could be explained as team members have a different understanding of the problems or of the solutions or both. It may help to have greater transparency on the diagnosis of the organisation to secure alignment in the strategy process. Likewise, strategy alternatives should be discussed as a team allowing the best to emerge as an agreed choice.
- “The organisation’s desire to change strategy too frequently”
Whilst this might appear to contradict the lack of agility frustration, perhaps the root causes might explain? Changes of leadership often call for a change in strategy to “make their mark” which may not be in the organisation’s best interest. Also, rather than adapting the strategy to new learnings, some leaders may be tempted to redefine rather than refine the strategy. Further, too much focus on lagging indicator metrics, often financial, rather than leading indicator metrics, may kill otherwise effective strategies too soon.
In a related comment it was suggested that the lack of end to end responsibility, often seen in matrix organisations, can create functional strategies that clash with each other. In a future article we shall explain how nested strategy frameworks can created the essential functional alignment.
- “Insufficient resources – recognizing that daily business always is first priority if you are not able to dedicate additional time/attention to strategy implementation “
If strategy design is thought of as a very heavy process the challenge is understandable. Unless one is sure that all decisions and actions made in the organisation are aligned in achieving aspirations there must come a tipping point favouring focus on strategy. The case for a more agile process is once again made.
What do you think? Comments are most welcome.
The Emergent Approach to Strategy™ addresses many of the frustrations identified. Arkaro has been selected as the first affiliated partner to deliver The Emergent Approach to Strategy™. Please contact Arkaro to understand how your strategy design and implementation may benefit you and drive success.
Dr. Peter Compo, author of the Emergent Approach to Strategy™ —scientist, engineer, and corporate veteran—spent twenty-five years at E.I. DuPont in a wide range of positions in R&D, product management, supply chain leadership, and business management—including director of DuPont Display Materials and Director of Corporate Integrated Business Management. Coupled with a background in music, Dr. Compo began to see the same adaptive patterns of innovation and successful change in all these areas. He also saw the need for a new approach to strategy and spent seven years integrating the science of complex adaptive systems with strategy theory and practice. The Emergent Approach to Strategy™ is the book he wished he had had at the start of his career.
Mark Blackwell founded Arkaro in 2016 following a career in organisations both large and small, covering a wide range of industries including animal health, specialty chemicals, advanced materials, food and feed ingredients. 13 years at DuPont included 8 years of consulting roles across multiple businesses. Expertise included Six Sigma, Integrated Business Planning, Product Line Management and Business Productivity. At this time Mark worked with Pete as the ideas forming Emergent Approach to Strategy™ were developed. More recently Mark has provided feedback on the book prior to publication and is the first affiliated partner to deliver the Emergent Approach to Strategy™