How to act in uncertain times?
The five attributes of a dynamic strategy
What do you do when you feel your playing field is changing? How do you act on factors that influence your business? Which strategy do you pick? There are many different types of strategies to choose from. However, which type of strategy do you need? That depends on your organisation. Also, it depends on the context you are in. In this article, we share insights that we gained in the strategy development process which we recently co-created with and for a mid-sized company.
Your context has changed dramatically
For many of us, COVID-19 resulted into dramatic changes in the business context. For some, the incoming revenue nearly stopped altogether while customer service only increased, while for others the cash pool drained to critical levels due to ongoing costs and financial obligations. If we only knew when and how our business would return to pre-corona levels.
Three dynamics are relevant in the process of defining a relevant strategic response to the crisis you are in:
There is an increased level of uncertainty:
Many business tactics rely on stability and predictability, such as business planning, contracting and agile development. The level of uncertainty needs to be factored into the way you operate and decide.
The viability of your business model is under pressure:
This means that the time to react has decreased. There is no time to wait and see what happens. Nor, can you afford to build a new business model from scratch. You must act now.
The norms of your industry are fading:
You are thrown back into a storming phase. Previous norms have disappeared, and everyone is looking for new anchor points. In relation with the first trend of increased uncertainty, this reveals a paradox: There is an increased level of uncertainty, but at the same time there is more room for change and you can drive that change.
How to respond?
The three dynamics we mentioned above, indicate the need for a dynamic strategy. A dynamic strategy has the following five attributes:
This involves a gradual process of change and development, building on your key capabilities and assets. There is a strong focus on creating value, which helps to prioritise. Evolutionary also means that you must work from what you know today. Looking at your current operations, what do you need to stop doing, what do you need to decrease, what do you need to increase, and what do you need to add?
This means that it takes the level of uncertainty of the market into account. It includes scenario planning where planning is made based on dynamic horizons. In each dynamic horizon you look for a cadence that fits to the dynamic, while continuously monitoring cues that signal changes in the scenarios.
As complexity and pace have increased, disconnected initiatives are doomed to fail. Therefore, instead of focusing only on parts, it is important to understand the whole ecosystem. Acquiring an understanding for how the different parts are connected, serves as a starting point for designing interventions.
Change is driven by people. Therefore, the focus is on people rather than business or technology. A people centred approach involves gaining deep understanding of people’s motives, their changing latent and manifested needs.
As immediate action is required in uncertain times, there is no doubt that the strategy should be actionable. This can be done by defining (long and short term) design challenges that allow people to get right on it without falling in love with solutions. When dilemmas arise along the way, guiding principles can be used as an instrument to make decisions, empowering the entire organization to respond effectively.
We applied the development of a dynamic strategy to a mid-sized company. This was done remotely in two months’ time, in co-creation with the whole management team. This dynamic strategy allowed them to act straight way. It also gives the organisation a lot of trust in how to deal with this uncertain environment, their options, and the influence they have on making it through this crisis.
Would you like to learn more about (dynamic) strategy development? The Strategy Development Map gives an overview of the different activities regarding strategy development and shows how these different activities are connected. In terms of Music Thinking, the Strategy Development Map is focused on the PERSONALITY cue: The cue to work from the heart of your organisation: from your why and brand values to the holding space you provide for your stakeholders.