Dynamic Organizational Planning: Converting Strategy To A Verb

by Jeff Jones

You may be skeptical about reading yet another article about strategy. After all, “strategy” is a ubiquitous term in business, but is still somehow a misunderstood concept. In our experience, most organizations don’t have a clear, effective business strategy. Instead, they have what Roger Martin has referred to as essentially “budgets with lots of explanatory words attached”, and what we might call a robust tactical plan that is often tied to some larger goals or directional decisions, but that usually fails to truly create or enhance competitive advantage. And that’s the primary job of a strategy.

ABOVE ALL ELSE, STRATEGY MUST BE DIFFERENTIATING

So let’s start with the basics. Strategy is simply a set of integrated choices that define how a company uniquely creates value for stakeholders. And when we say stakeholders, we mean that in the broadest terms possible, not just customers or investors but expanding the idea of value to any group that is impacted by your operations.

The word “uniquely” plays a huge role in the definition above. A strategy needs to be more than a list of objectives and tasks. It needs to define what the organization is pursuing in support of its distinctive “why”.

The primary value of any strategy is to provide clarity for the investment of organizational energy and capital—to define what a company will do and what it will not do at a level that creates clear differentiation from competitors. In other words, it defines how the organization will create value in ways that no one else can or will. And these strategic boundaries allow the entire organization to make informed decisions that are aligned in pursuit of the company’s unique vision and value proposition, bringing its reason for being to life in tangible ways.

Download our free eBook on using lean strategy to unlock growth:

How to Use Lean Strategy to Get Unstuck and Accelerate Growth

DOWNLOAD NOW

ORGANIZATIONAL STRATEGY MANAGEMENT MUST ALSO BE DYNAMIC

A well built and managed strategy ensures that your most valuable resource—your people’s time—is spent on the things that are most critical to long-term success. To do that in today’s dynamic environments, your strategy needs to adapt as the facts around you change, not just in an annual planning meeting. In other words, you need to turn strategy into a verb.

One of the most fundamental mistakes leaders can make is to view strategy as a static plan rather than an adaptive structure for informed decision making. A written plan is really just a snapshot of your best perspective at a given time. And yet markets are dynamic. In implementing strategy, managers and employees at all levels of the organization are constantly making a wide range of independent operating decisions in pursuit of the company’s vision within those dynamic environments. So how do you keep those decisions aligned and relevant?

Leaders must begin to view strategy as a verb, not a noun. A verb expresses action and denotes movement, which are not traditionally associated with most strategic planning processes.

BUSINESS STRATEGY DEVELOPMENT MUST EVOLVE

While some choices are truly foundational and enduring, that does not mean that an entire strategy must endure. Take Southwest Airlines for instance, which is at its core a low cost airline. Having a dynamic and responsive strategy does not mean that they should abandon the core anchor of cost in determining how they uniquely create value for travelers. However, the goal must be to create an evolving framework that is constantly being refined by market realities and ecosystem inputs, allowing you to identify misalignment or opportunities to improve your strategic positioning in real-time, and empowering the entire organization to make better decisions about how to grow and optimize the value being created.

There are two key factors that help organizations to build a dynamic framework:

• Identifying which elements of your strategy are creating the most value. We’re firm believers in the Pareto Principle - 20% of your inputs are responsible for 80% of the results. By identifying what really drives value creation, organizations can invest capital and resources efficiently. Conversely, what can and should be diverted from efforts that aren’t producing the desired results.

• Consistently engaging the ecosystem to understand what’s happening in real-time. Keeping a consistent eye on the broad ecosystem and markets, in addition to key internal measures of performance, allows organizations to quickly pivot before it’s too late. For most businesses, scanning the horizon and evaluating performance at least quarterly is required to ensure relevance. Otherwise, it may be too late to change course and optimize value creation.

Achieving this more dynamic form of strategy represents a real challenge. It requires a shared understanding up and down the organization of the constraints imposed by the current strategy, along with clarity on how and when market information should be leveraged to disrupt and refine those boundaries to achieve better performance. It requires some friction to build and manage a truly adaptive strategy. But when you get it right, it becomes an extremely powerful tool for accelerating performance and creating sustainable competitive advantage.

Jeff is a Partner and Senior Organizational Strategist at BILD, helping leaders gain clarity, accelerate performance, and create long-term value. Jeff enjoys ice cream, behavioral economics, dumb comedies and embarrassing his family in public.

Photo by Jeremy Bishop via Unsplash.