Learn why strategic agility is critical to success and where starting points are
In a volatile world, the adaptability of an organization determines its future. As a company, it is a matter of being permanently "strategically ready" in order to master changes in direction that are necessary at short notice in a timely, coordinated, goal-oriented manner and as smoothly and efficiently as possible.
Classic strategic planning is still useful, but it is unsuitable as a means of strategic management and development. Rather, it is a financial instrument and builds the basis for mid-term planning, budgeting, bonus systems and financial reporting. Therefore, planning can only be a result of strategy development, but never its beginning.
Proper interconnection, removal of organizational hurdles, and constant strategic dialogue are keys to strategic agility.
These points should guide you:
1. Challenge cherished ways of thinking and doing
Many of today's executives grew up in the age of traditional planning with large-scale, centrally controlled planning processes and long planning horizons aimed at achieving the most reliable mid-term planning possible. This works instable times that can be planned well. The volatile world requires the willingness to distribute strategy work among many heads, to create transparency for all strategies and to enter into a permanent dialogue independent of limiting organizational structures. In other words, it requires a change in thinking, at the very least a review of our entrenched thought patterns to determine their validity and the willingness to say goodbye to them if necessary.
2. Market sets the required pace and methodology
In the strategy process, segmented markets and sub-segments come into focus. Highly dynamic markets require correspondingly dynamic strategy approaches. This relates to the process itself, the methods used, the timing of the strategy work and, of course, the "maturity" of the unit developing the strategy. This assumes a high degree of autonomy for the planning units. As long as there are a few overarching boundaries, a few but essential methodological standards and coordination points, it is ensured that despite this autonomy, a coherent big picture will emerge in the end.
3. Work in small intermediate stages with short pacing and feedback loops
In an agile world, foresight is important, but so are narrowly defined goals. The path to the goal remains flexible. Work in intermediate stages, starting with an assessment of what has already been achieved. Check the validity of previous assumptions and adjust them at short notice if necessary. Agile strategy work means more foresight through shorter pacing and regular feedback loops in smaller, flexible teams.
4. Connect the relevant actors across departments
Encourage cross-departmental collaboration and involve cross-functional players at an early stage on the issues that are relevant to them. This cross-departmental interconnectivity is a lever for speed and quality of the strategies developed, while creating a robust foundation for the very purpose of a strategy – successful implementation. Interconnectedness also creates the most important prerequisite for organizational learning processes.
5. The Strategic Management Office takes on the central role as "orchestrator"
Communication, participation, and a cross-departmental iterative approach are becoming more important. The strategy department or "Strategic Management Office" (SMO) is given a central role in this. The SMO not only helps to provide the right tools to the right people at the right time. It also assists in the necessary interconnection of the relevant actors, in the linking of the content of the strategies and in the process moderation. This "orchestrating" is central to aligned strategy development and strengthens the organization's ability to move faster and more actively in a dynamic environment.
6. Disconnect from the events of the fiscal year and allow for uncertainties at handover points
Slavish orientation towards the events of the fiscal year (shareholder meetings, quarterly reports, mid-term planning, budgeting, etc.) increases the pressure on those responsible to "look as good as possible" when the deadline comes. The key strategy work falls on the sidelines. Instead of using strategy as the foundation for planning, people are tempted to extrapolate target figures based on historical values. This is human, but the consequenceis that the link between strategy and planning can no longer be established. Ultimately, the resulting gap between strategy and target figures can no longer be explained in a comprehensible way. In a volatile and complex world, executives increasingly get into argumentation trouble with this approach.
For agile strategy work, we need to detach ourselves as far as possible from the constraints of the fiscal year and be bold enough to tolerate fuzziness in the numbers. Only in this way is it possible to identify the gap between strategy and planning and close it in a comprehensible way. Fixed deadlines for mid-term planning and budgeting will remain necessary in the future. However, continuing to align strategy work with these deadlines is wrong as long as no logical link can be established between these two worlds.
Strategy development must become a permanent priority
Strategy development and implementation cycles need acceleration, a shorter cycle and decoupling from fiscal year events. The future belongs to those who are anticipatory and proactive. Strategy in an agile world means a process that is permanently underway and that cannot be limited by organizational structures.
This permanently increased strategic readiness starts with one's own mindset. When the cultural basis for agile thinking and action is in place, organizational learning effects and a sustainable time advantage over the competition emerge, which ultimately makes the difference.
However, it must always begin with the will to change. Organizations that want to remain successful in the future should embrace change early on, because there is and will always be no alternative. In the same way, there will be no alternative in supporting strategy work with modern software solutions.
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