The life of multinational companies has never been so short. Half of the current S&P 500 companies will be replaced on the list in the next 10 years, in what will be the most turbulent decade in modern history.
However well executed strategic planning with the necessary tools can take your organization to the next level.
Source: Corporate Longevity Report: Turbulence Ahead for Large Organization ( https://www.innosight.com/wp-content/uploads/2016/08/Corporate-Longevity-2016-Final.pdf )
The top-down corporate strategy is broken. It tends to cause organizations to be misaligned, gives superficial direction, it is ignored by most, and lacks follow-through.
The dynamic of top executives meeting at a strategy retreat, building a perfect environment, and hoping it will land when they return, feels dated. This cannot be called effective in driving change in complex environments.
The conventional approach to designing a strategy fails for five reasons.
The stakes are too high to think that a group of people in a room for a few days will be able to understand all the crucial factors that influence the success of an organization.
Missing from the meeting are the voices of competitors, internal users, and customers. All of them have a vision of the market, of the values, of the alternatives and of the trends that make up a sector.
In a rapidly changing world, a strategy document that sets out what a company will do in the next five years is dangerous.
Initiatives are proposed without considering the organization and the human factors involved in their application (user experiences).
New initiatives must involve those who execute them. Otherwise, they will resist apparent risks with no obvious reward for themselves.
Design Thinking is a process for solving complex problems. It involves empathetically understanding the people involved in the problem you are trying to solve, defining that problem, coming up with solutions to it, building testable prototypes of those ideas and then testing them, while repeating the above steps as new information becomes available.
With some adjustments, the design process Thinking is ideal for designing a strategy.
The steps to design a strategy with the user at the center.
A strategy developed without consulting stakeholders is fragile. Your products and processes will not fit the needs of your customers. Your competitors will be surprised or confused. Your users will not agree with you, they will reveal information that you did not know, or they will simply not be motivated.
Every strategy process must start by talking to your value chain. You will find valuable information on the trends and changes facing your sector. You will be able to delve into the real value that your customers obtain from your offer and the opportunities to add more value.
The "why" (Purpose) is probably the most important message an organization can communicate, as it is what inspires others to act. Starting with "why" is how you explain your purpose and why you exist and behave the way you do. simon 's theory Sinek is that successfully communicating the passion behind the "Why" is a way of communicating with the listener's limbic brain. This is the part of our anatomy that processes feelings like trust and loyalty, as well as decision making.
Another key point in this part of the exercise is that you have to understand THE GROWTH MINDSET: a perspective on life in which a person believes that their talents, intelligence and abilities can be further developed. Another hallmark of the growth mindset is embracing error. The error as a trigger for the will to improve . It also facilitates the necessary confidence so that risks can be taken in a controlled way (you can make a mistake, but not the same one twice), something essential in growth or change processes, without the fear of a bad result . can be pointed out or penalized with disrepute.
There are usually far more promising opportunities than there are resources to pursue them, so a range of options must be explored before deciding on a direction. The objective is not to make a specific and binding decision, but rather to smoothly review a range of options to narrow them down.
The exploration is done with two approaches, internal and external.
In the Internal Approach what we want is to understand the challenges, create a heat map and prioritize these opportunities. In the External Approach, we contextualize factors such as industry, market, competition, customers, economic, social and technological trends.
With your vision and knowledge of the available options, it is time to select your path and delve into the details to follow it, including its areas of focus, specific projects, available resources and a roadmap to measure progress.
Most of the strategies become obsolete and are ignored. A living strategy is one that permeates the psyche, mindset and structure of the organization. To fully implement your strategy and make your vision a reality, you must have the participation of everyone and an organization with a clear purpose.
To achieve implementation, it is key to have agile leaders and teams, owners of initiatives, aligned to the strategy but with autonomy to build the path and learn throughout its design iterations.
The agenda of the strategic planning process depends on the nature and needs of the organization and its immediate external environment. For example, planning must be carried out frequently in an organization whose products and services belong to a rapidly changing industry. In this situation, planning could take place once or even twice a year and be done in a very comprehensive and detailed way.
On the other hand, if the organization has been around for many years and is in a fairly stable market, planning can be done once a year and only certain parts of the planning process are updated each year, for example action planning ( objectives, responsibilities, deadlines, budgets, etc. )
The process of market disruption is endless. Only through a tightly aligned, responsive strategy and relentless focus on customer value can you thrive through disruption and outlast your competitors.
To do this, think of your strategy as a hypothesis. A constantly updated guess , rather than a static “perfect” document that you rigidly follow. Let's call this rate the speed of your strategy, that is, the speed with which the strategy penetrates your organization. Imagine an organization moving in perfect sync, with each member aligned toward a shared vision of the future.
At London Consulting Group we improve your company faster. Discover how to lower your company's strategy in an agile way and how to pivot when necessary.
We help you move from a Normal Strategy Design process to an Agile and Simple one
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Written by: Alfredo Chávez