How Strategy Can Deliver Today
By: Pawanjit Singh
Tags: Strategic Planning, Consulting, Strategy, Strategic Thinking, Innovation

Part-1

As a Strategy & Innovation professional for over 16 years and as founder & CEO of Ranzar Consulting, an Innovation & Growth Strategy consulting firm, I’ve often been surprised at how companies view strategy today. I’ve developed strategic plans for Fortune 50 companies and I’ve advised a number of companies on their strategic growth options and through all of that, there’s one thought that’s always bothered me; traditional strategic management is ill-equipped to make sense of tomorrow.

By no means am I disregarding the body of knowledge on strategic management that’s been growing since the 1960’s. But the fundamental problem is that we’re not living in the 1960’s or the ‘70’s, ‘80’s ‘90’s even the 2000's.

For the practice of strategy to deliver today, it needs to be supplemented, even replaced by some of the modern tools & frameworks, and not just from the field of strategy itself but also from related & adjacent fields such as Innovation.

The problem with strategy today

If strategy is the pursuit of a desired future state, we’re not doing a very good job of it. Good strategy must, first & foremost, present a set of choices. Generally (and this is the first & last time I will use this word), the way strategic planning is done today, is an exercise in backward looking wishful thinking. Burdened with data. And it doesn’t present the company or the leadership with choices. Strategy today is mostly a ways to reach an end and in that sense, we confuse tactics with strategy.

Where does it go wrong?

Strategic thinking comes in the way of getting S#!t done.

The external pressures (market, investor, competitor) mean that early-stage companies don’t have the time for the meta-physical type of thinking that good strategic rigor demands. I’m yet to come across a zoned-out founder pondering the meaning of life while the “platform burns”.

And for big companies, well, we attended this company wide all hands, virtually of course (because of COVID, we didn’t get to go to the fancy off site for an all-expenses paid vacation), and we got this glossy, colorful pinup with energetic inspirational slogans that looks suspiciously like the Parthenon in Greece (the previous year’s one must still be there under all the food delivery menus pinned up on my desk). Big Co. executive will tactically execute this strategy now, which is to say, I’m going to do what I did last year and the year before because admitting it’s not working is career suicide. And, also because I’m not the “what’s the meaning of life” kind of person and am an action oriented individual, I only understand bullet points, each with its own Gantt chart, thank you very much.

We plan for a world without turbulence

Strategic management really came into its own during the mid-20th century when the likes of Peter Drucker & Michael Porter turned the spotlight to what’s happening outside of the organization as a way to understand and make sense of the world. And while still very useful, my problem with these tools & frameworks such as the 5-forces and Value Chain Analysis, is that they provide a snapshot-in-time analyses. They’re not prescriptive. And they certainly don’t account for the way the world is today. All these tools & frameworks solved for a degree of operating stability which isn’t available today. It wasn’t wrong to think, at that time, that tomorrow will look a lot like today.

Even today, most strategic planning solves for a stable world. We assume, no, hope, that tomorrow will look a lot like today. Even when we have the benefit of hindsight to tell us that today looks nothing like yesterday.

It’s much harder to plan for turbulence & uncertainty and so we plan for stability.

After all, scenario planning should take care of uncertainty. And agile. We’re an agile, ambidextrous, innovative, entrepreneurial company with the committed, inspirational leadership that’s the envy of all.

Except we’re not.

We’ll be well served in our endeavor to make a little sense of tomorrow if we agree that knowing what we don’t know, should be equally important in our planning as knowing what we do know.

Data analytics disguised as strategy

Because W. Edwards Deming said, “ Without data, you’re just another person with an opinion” and because powerpoint has so many fancy charts options now, the world of data is where we must dwell. And I must show everyone the neat tricks I learnt in Tableau.

By no means am I discrediting the importance of data and data analytics. But mistaking data analytics for strategy is an easy trap to fall into. Good strategy combines a good amount of creative reimagination along with hard data. It’s that creative reimagination that we’re incentivized out of and that’s so hard to hold onto in the daily humdrum of corporate life.

The fear of the unknown keeps us tethered to historical data. But data needs to tell a story. The future is unknown. Historical & other data can suggest a way forward but you need the creative reimagination of a story (actually multiple stories because the future is not a single point in time, it’s a range of possibilities), to add the layer & context needed to drive change. No amount of industry analysis & competitive benchmarking will tell you what needs to be done. They’re great for what they are; context.

Good strategy advice is inaccessible

Forced to recommit to strategy when things aren’t going well, companies have two options, build their strategy capability or look outside for help. Hiring for strategy is tricky. For many founder-led scaling and maturing companies, strategic decisions lie squarely with the founder and maybe a small set of individuals. But the pressures of staying viable for a small company means that strategy doesn’t get the kind of rigor it needs. In my experience, the initial set of assumptions on which the founder built the company, continue to drive strategic decisions even if those assumptions are well past their due date. But it’s expensive and time consuming to change. (In large companies, this is called “transformation”). At some point, when the company transforms from founder led to a professionally managed company, the company could hire for strategy. But even then, it’s mostly seen as a one-time activity, to be done every 3–4 years or when needed. That’s one reason why strategy is clubbed with other functions like marketing or finance, because it hasn’t earned its place in the organization hierarchy yet. Without a formal, institutionalized strategy function, strategy will always remain episodic and not produce the desired results & impact.

Companies can look outside for strategy advice of course. The global strategy consulting industry is projected to touch $91.4B by 2025 and apart from the established global powerhouses, there are a number of smaller, niche strategy consulting firms that companies could turn to. When considering bringing on board a consulting firm, companies are looking for 4 things,

1. Information — The data and analyses that take the client’s world, industry, and market position and make sense of it.

2. Expertise — An experienced operator’s perspective on a problem and the different ways that it can be solved.

3. Insight — The rigorous, analytical application of expertise to come up with insights that will help the company succeed.

4. Execution — The roadmap to choosing and implementing the changes to be made.

(Source: CBInsights)

The strategy consulting industry itself is getting disrupted by smaller, niche players offering unbundled services such as experts-on-demand (GLG), or market research (Nielsen & others), and the internet has democratized information which means we could turn to any number of frameworks, tools & data and not have to rely on the big consulting powerhouses for this kind of information & expertise.

The problem with this is that most companies can’t afford consulting firms. Unless you’re willing to sign multi-year, multi-million-dollar retainerships, the kind of consulting services offered by the big consulting firms is not an option. And going it by yourself is expensive in terms of time (where do you begin and how do you make sense of all the different tools & frameworks out there?).

Now what?

Strategic management isn’t going anywhere and entrepreneurial zeal and the hurry to “get S#!t done” only strengthens the case for considered, purposeful growth. Unintended growth of the kind we’re used to seeing from the startups that have turned into unicorns in the past few years, has consequences. If you’re chasing every new, shiny object in the name of growth, it can be an expensive proposition. And you’ll always be playing catch up with your capabilities.

In Part-2, I will look at how the practice of Strategy needs to evolve to stay relevant.