Wednesday, February 24, 2010

Learning for Flexible Strategy

Mintzberg describes a "Learning School" of strategy that offers some neat possibilities for how to make strategy flexible.

The "Learning School" incorporates various elements from the last 20+ years to offer a radical approach to that flexibility problem:  What if an organization's strategy included organizational learning? What if organizational learning actually drove strategic change?

That is, what if the organization focused time and attention on
  • questioning strategic assumptions,
  • scanning the environment for emerging threats and opportunities, 
  • engaging in dialog about the complexities and confusion in the environment, 
  • learning in an emergent way, and 
  • coming together about new directions based on a new shared understanding?

Emergent learning?  Maybe the right way to deal with the environmental emergent-cies we all see smashing over-considered strategies?

And, with the whole organizational learning opus on the table, what if an organization were smart and bold enough to combine a few things, as a test?  Specifically:

Action Learning
+
Executive small group
(chartered to find and recommend strategic modifications)
+
New technologies for virtual group work
=== === ===
An agile, adaptive, approach to strategy revision

Could be a game-changer...

Tuesday, February 9, 2010

How Flexible Is Your Strategic Plan?

Strategic plans are based on analyzing the environment and prescribing a direction, a series of activities to create the future the organization wants.

Strategic plans limit choices of action to that path that the planner foresaw when the plan was made. Some are more flexible than others. If they’re not flexible, they’re doomed to be SPOTS (Strategic Plan On The Shelf).

How flexible is yours? These 3 questions will tell you.
  1. What metrics tell you if you’re heading for the results you want?
  2. What assumptions are the foundation of your plan – and how do you know if they’re still true?
  3. What contingencies are built into the plan?

Metrics tell you whether your plan’s working. The best ones provide a “dashboard” of key indicators that are sensitive and future-focused.

Assumptions list out the environmental factors – stable or changing in some predicted direction – that are necessary for the plan to keep making sense. Thinking them through, writing them down, and checking them periodically keeps the foundation of the plan rooted in reality.

Contingencies are a series of “what if” scenarios about the assumptions changing or the metrics going badly. They include at least the early steps of diagnosis and a direction for recovery.

A problem you anticipate can be halfway solved – which is what flexibility in strategy provides.

Monday, February 1, 2010

"Strategy is dead" RIP, and long live AGILE strategy!

Last week, the Wall St. Journal featured an article saying “Strategic Plans Lose Favor” with larger companies (read).

The article reports that companies like Home Depot, Spartan Motors, and (surprisingly!) Accenture think “Strategy, as we knew it, is dead.”

I say “Rest in peace!” -- for the sort of strategic planning that Accenture has specialized in, and that most larger companies have practiced.

Strategic planning can be, and has been, a massively analytical undertaking. Large consulting firms, like Accenture, can spend months of effort and hundreds of thousands of dollars developing an exquisitely detailed strategic plan based on massive analysis. Sometimes they’ll deliver it in nice leather binders so it looks great on the executives’ bookshelves.

In an economy with lots of surprises, such strategic plans can be obsolete before they’re printed.

One manufacturing company spent months developing a plan to achieve ambitious growth over a 3-year period. Within the first 2 quarters, sales dried up and they went into survival mode. As for the strategic plan? “Well, we haven’t looked at it in quite a while.”

So does that mean that strategic planning is dead, killed by the accelerating pace of change?

By no means! But the analytical behemoths may go extinct, while more agile approaches will flourish.

To be useful in turbulent and difficult times, strategic plans need to be flexible and adaptive, open to rapid learning from the environment.

If a strategic plan is not agile, it’s dead, worthless, money very poorly spent for “SPOTS” (Strategic Plan On The Shelf).

So how can a strategic plan be agile? See my next blog.