“How do you know if a strategy is getting off track?”
This was one of several questions I confronted last week for a journalist writing for a finance magazine. It’s a great question because I see the signs regularly, and boards are often unaware that their strategy is about to prove a mismatch to reality.
1. Everything is going great. We just need to tweak it!
Just consider how much has changed in the last year. And I’m not just referencing the pandemic. A vast majority of our lives have changed. Think about how social opinion has driven radical action against police, against GMO foods, against statues, against, well, just about anything.
From currency to education, to healthcare to housing and climate change, our world is in a constant state of disruption. Strategy cannot remain constant and flex at the same time. Not with the gyrations we are experiencing these days.
At a minimum, your strategy needs a deep review annually. More often if you are in tech. If you think after a year your strategy only needs a tweak, you’re ignoring everything that’s happening around you.
2. We have a five-year plan.
No you don’t. You have a five-year aspiration with a lot of risk. Your ability to predict the future beyond two years is severely compromised by just about every potential variable you can think of. Markets crash. Wars erupt. Supplies dwindle. People completely change what they believe is important.
In a recent planning session, I suggested that a board consider a two-year horizon. They decided to focus on a one-year time period instead. There were enough plays for them to ‘get right’ in the next 12 months to turn the ship quickly. I applauded their choice.
3. Our leaders know enough to build the strategy.
Sorry, no. A good board brings a diversity of perspectives, and even then it may not be enough to consider sufficient angles to craft a strategy that doesn’t have you heading for a brick wall. More input is needed.
“So what can they do to ensure a strategy remains relevant?” A brilliant follow-up question. I suggested:
- Run a broad environmental scan, beyond competitors and encompassing similar organizations
- Consider winning strategies from other fields and how they might apply to you. For example, Apple’s Genius Bar, Software as a Subscription, Airplane loyalty programs, Ikea’s showroom design
- Bring in guest speakers: Who can shake up our thinking? (Google “futurist speaker”)
Strategies never succeed by standing still. They need renewal just as much as you do.
Thoughtfully yours,
Jeff Skipper
