Strategic planning is dead.
Or at least what we once knew as strategic planning — that exercise of defining and setting into concrete some long-term strategy that was going to take our business to the next level in its journey.
Indeed, there was once a day — some ways back in our collective industrial past — when a business leader could concoct and set into motion a long-term strategy that would yield steady and impressive growth… one that would practically run on auto-pilot while they sat back and watched the revenue graph climb ever closer to that elusive upper right hand corner. I call this the “textbook MBA long-term business strategy”.
I’m here to break the news that such a thing no longer exists. Its day has long since come and gone. To some, this is bad news, and to others, this is great news. We will shortly understand why, but first let’s understand why the “textbook MBA long-term business strategy” no longer exists. The reason it no longer exists is simply because the pace at which our markets are moving now — the pace of market evolution, the pace of technology evolution — precludes an ability to even think of having a static long-term strategy. Unlike 50 years ago, this is simply not a reality of our world. Our world no longer sits still long enough for such a model to work. The traditional approach to strategic planning expected the world to go on progressing according to some set of initial assumptions; it failed to expect and plan for rapidly emerging challenges and opportunities. But anymore, the world does not go on progressing as one might expect; it progresses according to a grander aggregate unfolding of events — literally millions of events.
So what is a company to do?
The answer to that question involves an entirely different approach to developing and deploying business strategy. It lies in having a business model that merges together long-term strategic direction with short-term opportunism, what I call a “responsive growth strategy”. A responsive growth strategy expects — and plans for — these rapidly emerging challenges and opportunities. It recognizes and provides for the need to constantly shift and adapt in response to these. A responsive growth strategy is the only way to ensure your business’ day-to-day actions result in innovations that are consistently relevant to your markets.
With a responsive growth strategy, you have a long-term strategy that you are seeking to execute, but embedded within that strategy, you inherently expect many small opportunities to pop up along the way (and you won’t know exactly what these are until they show up). When they do pop up, you are prepared to pounce on them, which you can do because you have been expecting them. This, by the way, is the difference between being responsive and being reactive. With reactive one is not expecting the change (and stresses when it happens); with responsive one is expecting the change and eagerly awaits it (thus why the death of static long-term strategies is good news to some).
Adopting a responsive growth strategy is not as hard as one might think, but being able to leverage and execute such a strategy does require a particular set of prerequisites. Let’s explore these.
First is culture. Hands-down, a responsive growth strategy cannot and will not work without a culture that allows for an appropriate degree of responsiveness to changing markets, including the occasional misstep. Such a culture is able to integrate a sense of identity (think Jim Collins’ “Hedgehog Concept”) and long-term direction with the flexibility to shift and pivot in a timely fashion. Its planning cycles should inherently account for a certain amount of “churn” around short-term direction, while being anchored in the identity and longer-term direction.
Second is a constant pursuit of fresh market insights — the ongoing discovery process. This is where being close to customers and markets really pays off. There was a time when such an approach was the norm, but then things evolved toward mass marketing. Today the pendulum is swinging back to a more personal and up close encounter, such as with event marketing and similar models of engagement. This is out of sheer necessity, as markets are moving so fast that the only reliable way to remain attuned to them is by being close to them. The ongoing discovery process allows us to constantly learn about our market’s emerging needs, and this is where new opportunities for innovation will first be identified.
Third is the ability to execute rapidly, fluidly, and nimbly, not unlike startups do. This requires an entire arsenal of tools and methods for rapid and effective execution. This can include such business tools as crowdsourcing campaigns (to ideate around emerging market needs), corporate venturing (investing in and/or acquiring new startups that align with your market positioning), open innovation initiatives with external partners, and intrapreneuring liberties for staff that are so inclined (business plan competitions and similar activities). It also requires an overarching approach to innovation management that ensures all of these tools work together effectively. These are the things that are going to enable your organization to execute on the opportunities that have been identified and ultimately vetted for their business payoff.
Those three are the majors. On top of this, there are also a number of minors required for a successful responsive growth strategy. And of course, as is said, God is in the details, by which we mean that you still have to get all the minors worked out too if you are to be successful with a responsive growth strategy. Some of these minors include broadly networked R&D capabilities, creative IP arrangements, flexible approaches to classification and prioritization in Product Management, rapid salesforce education, nimble outbound marketing tools, flexible operations and supply-chain systems, and an HR philosophy that onboards professionals capable of working in such a fluid environment.
A responsive growth strategy combines a long-term business strategy with the embedded expectation (and eager awaiting) of the many small opportunities that will for certain occur along the way. It is the model best suited for sustained innovation and growth in our current age.
Anthony Mills is the Founder and CEO of Legacy Innovation Group, a growth strategy and strategic innovation consulting firm.
Learn more at www.legacyinnova.com.