2020/04/30

Strategy and Agility – Do They Go Together?

Do we need a strategy in times of uncertainty?

By Dr. Ralf Helbig

Is there a need for a strategy in times of uncertainty marked by rapid changes, increasing complexity, and innumerable unknowns? Is it possible to develop a long-term strategy? Are companies that constantly adapt to the changing environment perhaps even more successful?

Despite these doubts, the fundamental pillars of good strategy work have lost none of their relevance. When the competition for talent is keen, employees need more than ever a clear vision with which they can identify and that can convey a deeper purpose of their work. The formulation of concise answers to the questions of “why” we as a company do something and “where” our journey together is headed becomes significantly more important. Simple growth or expansion targets that are drummed into people’s heads and propounded every day are not feasible means for exploiting the potential of a company with its employees. Instead, easy-to-understand, clear objectives with which every employee can identify and that motivate him or her to get out of bed every morning must be devised.

Developing such a vision is not easy and requires creative commitment on the part of management. The vision Bill Gates created in the early days of Microsoft –“A PC on every desk” – is ambitious, memorable, easily understood, and motivating. Who would have thought back then that this motto would one day be reality? But once this vision had been achieved, Microsoft noticeably lost its powerful drive for a time because no new clear vision had been found. Today’s motto of “Enabling others to achieve more” is an open-end statement that does not ambitiously focus on a specific target. It must be understood as a kind of framework that gives employees a general sense of purpose for their work, but one that must be supplemented with specific short-term goals.

Demands on management differ from past expectations in this respect. After all, the challenge today is to set the long-term direction and to accompany employees on their journey from one attractive and achievable milestone to the next, landmarks along the way that have been set by common agreement, rather than to issue precise instructions on how goals are to be achieved. This implies the continuous questioning of the path that has been outlined in rough form and chosen for the achievement of the defined vision. In short, strategy development cycles for determination of a strategic road map of about five years, common in many industries, are no longer productive. Instead, all employees need a common understanding of the vision that they can translate into their work areas and use as a template for orientation of their activities.

Implied as well is the need to monitor constantly developments on the market, the activities of competitors, and, of course, innovations in technologies. Managers and employees should never, ever, think they are on the one right and true path. They should constantly question whether the path they have chosen is the most effective one for achievement of their goals and whether the goals they have set are ambitious enough to realize their vision. This is a painful and unpleasant process. After all, managers never enjoy being questioned about their actions and decisions. Sometimes companies would do well to have a kind of court jester who is allowed to ask unpleasant questions, express doubts about supposed successes, and point out weaknesses. Most of the time, however, lateral thinkers or critics of this ilk are silenced very quickly, and the window of opportunity for recognition and correction of mistakes or suboptimal decisions slams shut.

In this sense, a new light is cast on innovation as well. Driving innovation for innovation’s sake is futile; a spirit of innovation must be instilled on a broad front throughout the entire company. All employees should be given the opportunity and the freedom to develop and implement ideas in their purviews that will enrich their contribution to achievement of the vision. This is less a matter of the time and resources made available to employees and more about allowing them breathing space so that they can think the unthinkable, a liberty that must be powered by enthusiasm for critical reflection on their own actions and the thrill of leaving familiar paths and exploring innovative technologies in their search for new, improved, or even disruptive approaches. Demands are also made on management: tremendous openness to new and unfamiliar situations and the willingness to step off the beaten track. Of course, a constant risk of failure is another implication. But the secret lies in keeping the dimensions of potential failure very narrow through constant questioning so that undesirable developments are recognized and corrected at the earliest possible stage.

So what is different in Strategy 4.0 and Innovation 4.0? While just as in the past the scale of vision must be long term – and essentially the road to its achievement as well – it must be subjected to constant review and adaptation. All employees in the company must understand what contribution they can make to turning the vision into reality. Some companies are introducing so-called OKRs (objectives and key results) to generate this understanding. Every three months, teams consider how they can contribute most to the vision and from this starting point determine ambitious, motivating goals (objectives) that they translate into the concrete results (key results) that they want to achieve. The conclusions serve as their navigation system, determining their actions and setting the benchmarks that help them to measure their contribution. Using these tools, the organization is able to agree and focus on the most important strategic contributions at quarterly intervals while at the same time constantly adapting and optimizing the path culminating in the vision.

This article originally appeared in C-Level magazine No. 1 | 2020

Author

Dr. Ralf Helbig
Managing Partner | Global Head of Services Industries | Detecon Schweiz
Share this page