From Strategic Planning to Strategic Agility
I know, it’s old news: The speed of change is increasing and management (in theory and practice) is not adapting fast enough. There is this great clip from Gary Hamel (https://www.youtube.com/watch?v=aodjgkv65MM) that highlights the point quite well.
From a strategy perspective we actually see a change in the focus as outlined below.
So, if speed and agility of strategy and execution is key to strategic advantage how come that in most organizations the traditional strategic planning process still looks something like this:
Let me explain:
- Executive Management conducts a yearly Strategy off-site meeting, typically with some industry or management guru and his crystal ball to understand what is going on and define the future strategy;
- The head of strategy then produces a 50 page “strategy deck” as a tangible result;
- To comply with governance rules this strategy then needs to be presented and get approval from the more or less interested board members;
- Thereafter the strategy needs to be communicated to the staff. Typically in “tell & sell” town hall meetings where questions are invited but not really appreciated;
- In order to stay (politically and budgetary) relevant the divisional or department heads then start thinking how their areas can contribute to this strategy. This is done within their areas (silos). The less we have to involve others the better (easier) it seems to be;
- But very soon operational reality and firefighting sets in again and the “strategy stuff” is then handed over to a Program / Project / Strategy Execution or Results Improvement Office (whatever the flavour of the month for the naming of this unit is). They have to do the tracking and the admin work and ideally leave operations alone.
- The PM (??) Office then prepares regular reports on the implementation progress for the Executive Committee and prepares and tracks the high-level scorecard;
- Finally the EXCO then reports back to the Board on the strategy progress. Normally just in time before the next cycle starts and all begins again.
As a consequence this process has SIGNIFICANT shortcomings:
- The Strategic Relevance of the Plan is below 40% because
- The environment changes faster than a yearly cycle
- There is a lack of collective commitment in the Exco
- Business complexity is growing and becomes overwhelming
- The defined strategy is typically too fluffy, not clear enough to granulate
- Strategy is perceived to be something to keep EXCO busy but must not interfere with Operations
- People Engagement is only around 30% because
- Staff members don’t understand the “WHY”
- Staff members often lack critical thinking skills
- There is a disconnect between the “thinkers / modelers” and the “executors / doers”
- There is a lack of role and expectation clarity (management problem)
- There is unresolved tension between “Line” work and “Project” work
- Project success is only around 35% because
- There are persistent silos that hinder cross-functional collaboration
- PMO’s collect & manage project information rather than designing programs & portfolios for strategic success
- There is too much work in progress (we start too much and finish too little)
- There are inadequate governance mechanisms (everything is treated the same)
- “Business-as-Usual” projects are not on the PMO radar
What is needed?
In order to address these shortcomings we need to drive agility in the company. Here is what I am talking about:
Let me explain what we mean by this a bit more in detail:
Increase the alertness of ALL managers across the strategic landscape. This is not only the responsibility of the strategy department. Each manager needs to have an understanding of the developments and trends outside which might impact his / her work.
Increase the level of thinking by creating cognitive tensions and making new connections across dimensions. In general people need to think better and more. Cognitive tensions such as reducing budget whilst demanding more results drive creativity and innovation.
Decentralize decision making, introduce flexible (bi-modal) governance models and insist on transparency. Empower the front line through delegation of authority and critically review governance with a view to customer centricity rather than compliance only. Drive transparency and traceability rather than strict workflows.
Get collective commitment for a common direction. Spend the necessary time to REALLY get the executive team on one page regarding their perception of reality and priorities in the company. Once this is consensed you have less politics further down.
- ACT & ADJUST
Commit the necessary resources and use modular structures to increase flexibility. Modular product design has proven extremely valuable in the automotive industry and other applications. So why not using modularity principles in organizational design or management in general to speed up re-configuration?
Granulate / cascade strategy fast to increase the speed from strategic intent to action. The faster we can break down high-level intent to operational action the faster execution can start.
Leverage technology to accelerate collaboration, sharing, coordination, remodelling and execution. Technology is progressing fast but manager’s adoption remains behind the curve. Where is the new breed of IT managers that focus on driving business value rather than slowing down organizations through exaggerated IT governance & compliance models?
We believe the need for (Business) Agility in companies can be driven through applying a unique matrix-based approach combined with a specifically tailored software platform for this purpose.
The Scientrix Matrix is clear, simple and easy to communicate:
It starts with clearly outlining the purpose and then breaking this purpose down into its most important dimensions and dimension variables. In the intersects we can then make the connections between the 2 dimensions.
The intersects can then be further granulated into next level down matrices, creating nested matrix structures:
This genial approach ensures overview, focus, alignment and easy granulation / cascading from strategic down to operational level.
The Scientrix™ platform allows to visualize this as follows:
Projects & Tasks can then be managed using Kanban boards.
Results can be displayed to measure the effectiveness of the selected strategies: