Strategy – or more accurately, how organisations approach strategy - is changing.
Long, long ago, back in the 1990's and early 2000's, the focus was on producing a strategic plan that would set the direction and ambitions of an organisation for the next five years and map out how it was going to achieve these. Compiling this document - and the focus was on a document - required an intensive effort: departmental inputs, sophisticated analysis, board workshops, detailed projections, resource negotiations, financial budgeting, and crafting the words. It needed highly skilled people who 'knew' strategy and could reel off very impressively all the tools and techniques - SWOT, Porter's Five Forces, Boston Matrix ('cash cows' and 'dogs' were everywhere, but few 'stars'!) - and so on. Having a strategic plan became a best practice to which organisations aspired - and was insisted upon by many boards and regulators. Many organisations felt that they lacked the skills – and the confidence – to undertake this, and so sought help from management consultants to lead them through the strategic planning process.
Having produced a strategic plan, and ticked the board or regulator's boxes, there would be an initial cascade communication across the organisation and a burst of energy and intent to start its implementation. But a few months later the strategic plan document would be gathering dust on the Chief Executive's bookshelf, and monitoring progress reduced to executives poring over detailed Red/Amber/Green project progress reports and monthly performance measures whose connection to the organisation's strategy was usually secondary to the debates about the accuracy of the numbers.
Of course, I am exaggerating a little - but unfortunately not much (I've seen all of these happen!). What was apparent though was that there was much more to strategic planning than producing a document, and that organisations needed to be able to manage their strategy processes in a more sustained and continuous way.
There were doubts too about relying on a one-off approach to strategic planning: seldom did the organisation’s path over the following five years happen exactly as the strategic plan had envisaged. Organisations started to think differently about strategy, and how it could evolve as circumstances changed and threats and opportunities arose – and how they might manage this.
The past three years have highlighted even more clearly how the ‘traditional’ approach to strategic planning is no longer fit for purpose: the uncertainties about the future and realising just how quickly and radically things can change have shaken organisations’ faith in relying on a periodic strategic planning exercise focused on a document to map out their future.
Organisations need a more dynamic approach to strategy: it is in reality an ongoing journey, not a one-off project. They need a different way of thinking about the future, and to develop the adaptability and agility to be able to respond quickly as challenges and opportunities develop. In addition, they need the resilience to navigate around obstacles and setbacks, and the confidence and ability to consider alternative futures openly and objectively, as well as to work through what these mean for the organisation now.
At its heart, strategy is about how people in an organisation make sense of where it’s going and how it’s going to get there. It is not just about sophisticated analysis and board workshops leading to a glossy document: it’s about people, conversations and questions, and the organisation’s journey as it tries to work out its future direction and development. It is important to demystify strategic planning, and to focus on strengthening the organisation’s strategic skills, processes and culture to enable such sensemaking and ‘rich conversations’ to happen. Strategy needs to be dynamic - continual, agile and lived. Considering possible futures - and the uncertainty that they may bring - requires a different way of thinking, and the skills and willingness to do so. Responding, adapting and learning are crucial attributes.
It is a very different approach to strategy, and requires a different set of management skills. To be successful at strategy now requires focusing on strengthening the organisation's strategic capabilities: how people think and talk about strategy; the processes which encourage, facilitate and manage this and lead to decisions and actions as well as the leadership to steer the organisation on its strategy journey. It is no longer enough just to develop a strategic plan: the strategic leaders of today are thinking about how their organisation approaches strategy and how it can strengthen these strategic capabilities.
This is leading to different opportunities for management consultants working in strategy. The shift is from the ‘traditional’ strategic planning approach (in which organisations want help with strategy formulation, or developing a strategic plan, or the implementation of that strategic plan), to one in which organisations are looking for help to strengthen their strategic capabilities to enable them to adopt a more dynamic, adaptable and ongoing approach to strategy. People need to be able to think, and talk, strategically – and have the confidence and opportunity to do so – so strengthening the ‘strategic thinking’ capabilities across the organisation is fundamental. Organisations also need to develop the skills to think about the future. This is more than just identifying trends and forecasting developments: futures thinking requires creatively developing and considering possible scenarios (both desirable and undesirable) and then thinking through their implications and being able to deal with the consequent uncertainties.
Organisations need effective strategic management, and this is another critical capability which management consultants can help to develop. They need effective processes to engage people in strategy conversations and consequent decision-making and implementation, and the ability to facilitate and manage them. Establishing these as an ongoing part of how the organisation functions is the basis of good strategic management; and engaging people throughout the organisation in this is key to achieving high levels of understanding and ownership. It is an area where many organisations struggle, and yet it is vital in achieving a dynamic approach to organisational strategy. Helping them strengthen these strategic capabilities is an important contribution that management consultants can make going forward.
David Booth is a Certified Management Consultant and Fellow of the Strategic Planning Society. He is author of ‘Strategy Journeys – a guide to effective strategic planning’ which was shortlisted for the CMI Management Book of the Year 2018.