The Office Of Strategy In the Age Of Agility
Here's some perspective on what the Office of Strategy Management can borrow from the world of agile
Our understanding of strategy has come a long way from the war-front to the collaborative ecosystems. We are now getting an appreciation that strategy is not a zero-sum game, but is synergistic, that it is emergent and not definitive, and that is must be more responsive than previously thought. While long ago strategy was synonymous with Long Range Planning, in today's world of hyper-competition and VUCA economy, the boundaries between strategy and execution are getting blurred. When organizations are graduating from a linear model of thinking to a more iterative approach, where creation and delivery timeframes are rapidly shrinking, and speed takes precedence over accuracy, where does it leave the venerable Office of Strategy Management? How will the strategy making process cope with rapidity of change and retain its relevance? Here's some perspective on what the Office of Strategy Management can borrow from the world of agile.
Don't confuse strategy with purpose
The German philosopher, Friedrich Nietzsche, famously observed, "He who has a why to live can bear almost any how." The imperative of "purpose' can't ever be overstated for an organization. Simon Sinek frames this as the Golden Circle, comprising of the Why (the purpose of existence), the How (secret recipe), and What (the products and services), and offers that customers do not buy into your what or even how, but your why, and the same applies to your employees and partners. An area that leads to a lot of confusion is: "Where does strategy lie: Why, How, or What?' The strategy is about "how' to meet your objectives. Scores of leaders confuse strategy with objectives, or vision or mission. As Michael Porter clarifies, strategy is all about differentiation, and how uniquely you achieve your objectives than others.
The purpose stays but the strategy evolves. And in dynamic contexts the timeframe of strategy planning shrinks from decades to years and even into quarters. It would be unwise to think that once you have formed a strategy you don't have to relook at it for a fairly long time. The strategy is a living document, where your plan is only as good as the external realities, and that the execution is only as good as the outcomes. So, the Office of Strategy Management must set out the purpose firmly but be flexible and fluid on the strategy, and even more so on is execution.
Seek inputs on strategy building from far, down, and wide
Agile methods such as scrum, kanban and lean development have gone beyond the realm of product design and development to other organizational functions, such as customer engagement, employee motivation, and execution amid uncertainty. From the earliest Agile Manifesto, what we know are the following principles: 1) people over process and tools, 2) working prototypes over excessive documentation, 3) respond to change rather than follow a plan, and 4) customer collaboration over rigid contracts. However, in the realm of strategy, agile is often confused with adhocism, and that it would lead to more chaos than value. But as Jeff Bezos instructs us, when making strategy, one must focus on the long term, the things that will remain largely constant over time. In the case of Amazon, the strategy is three-fold: customer obsession, invention, and being patient, and that for customers what matters is greater speed, wider selection, and lower cost. With so few strategic priorities, how does the company manage to remain relevant? The secret is in managing strategy organically, where inputs flow all the time from the periphery, and there are multiple paths to reach to the top and fewer chances of missing out on an important development, which might elude the leader or the chief strategy officer.
The Office of Strategy Management must actively seek inputs from the trenches, where the action is, push sensemaking far and wide across the organization, and demand executives to have "extreme ownership' of their decisions. Netflix, one of the most valued media companies in the world, prides itself in fostering a culture of freedom and responsibility, where most of decision making happens at the point of action. Reed Hastings, Netflix CEO, prides himself on making as few decisions as possible in a quarter. The inputs, decisions, actions, responsibilities, and deftness are pushed far and wide and then the Chief Strategy Officer ensures that the system runs smoothly, much like an orchestrator.
Engineer incentive systems to encourage decisions and a bias for action
Disney's CEO, Robert Iger, writes in his memoir The Ride of a Lifetime – "chronic in decision is not only inefficient and counterproductive, but it is deeply corrosive to morale.' Knowing that there is "somebody' (read strategist) who is supposed to make decision and that my role is to merely follow orders is detrimental to self and organizational growth. By pushing decision making down, it calls for not only empowerment but also governance and monitoring. Each decision made in the trenches can either erode the company or make it stronger, and it depends on both ownership and freedom. On openness, we have two extremes: Apple and Google. Apple is famous for its secretive culture, where employees are discouraged from talking about their projects, even to other team members, whereas at Google the Objectives and Key Results (OKRs) of the company's CEO, Sundar Pichai, is for everybody to see and comment on. In the long run, Google would take more chances, recover faster from its mistakes, and let a million flowers blossom. The OKRs tie up goals, incentivise taking a stretch and achieving it, and makes performance visible, whereby getting one's skin in the game. On strategy, Apple is an exception, and not a norm that one could draw insights upon.
Agile is the way forward, not only owing to the rapidity of change, but also for the sheer value of experimentation. When it comes to strategy, honing an experimentative mindset was best avoided, but needn't be the case going forward. It's okay to make a mistake, but not so much to remain indecisive. By putting the locus of both sensemaking and decision making in the hands of a few, the organisation might sway too far away from reality. The Office of Strategy Management must become the "Office of Strategy Orchestration', equipping employees to makes sense of data and insights, decide with deftness, and execute with ownership.