Strategy should be a creative exercise, but companies often end up with plans that look a lot like their previous ones. Strategy expert Graham Kenny outlines a three-step process to avoid this pitfall: 1) open your mind to ideas from external stakeholders, 2) take a cold, serious look at your performance pain points, and 3) study the companies in other sectors that have solved these problems.
Strategy requires our most inspired creative management thinking, as we seek to find ways to respond to changing conditions and leverage our new competitive advantages. So why does your shiny new strategic plan often look like the old one?
A guy named Frank summed it up perfectly for me. It was over 20 years ago, but I remember it like it was yesterday. I was leading a strategy session with 14 executives. We had a flipchart, whiteboard and screen, and we followed the agreed agenda. I took points from the group. Then suddenly Frank said, “I don’t know why we have these strategy workshops every year. It always turns out that business is business as usual.
It was the first time I had heard the term “business-as-usual” in this context. But Frank was right. I’ve since seen this scenario play out with other clients on other occasions – strategic planning turning into same old, same old.
The usual strategy is your enemy. Here I’ll show you how to shift your thinking from “strategy development” to “strategy discovery” and illustrate with cases of companies that have escaped the usual strategy loop to seek ideas outside of their industries.
Avoid the usual strategy
Step 1: Change your mindset.
The conventional language around strategy, which is reinforced by every manual, is that strategy must be “developed”. But that turns management teams inward. Rather than looking for new ideas, they go back to industry conventions to develop a strategy from what has been done in the past.
The first step to making things happen is to change your way of thinking and your language from “developing” to “discovering”. Rather than thinking the answers are “here” (with the leadership team), think the answers are “out there” (with the stakeholders).
This simple change has a profound effect on how managers think and behave. Managers no longer think they have to have all the answers. They also don’t think that if they don’t they will lose face. Instead, a curious new mindset takes over. The message is “it’s okay to say, we don’t know”. Humility rather than pride becomes a valuable trait.
Step 2: Recognize your shortcomings.
While a shift in mindset is a useful starting point, you need more to open your organization up to true strategic invention.
Consider this example: Felix is a senior executive at a health insurance company, and in the wake of the pandemic, he sees a once-in-a-generation opportunity to create better customer experiences, greater efficiency, and better health outcomes. The problem is that it forces his company to adopt a whole new way of looking at its role. New models are also needed – the so-called “digital gateway” approach to member engagement. It would bring together virtual care, remote patient monitoring, patient navigation and coaching with price transparency, providing an integrated experience for the consumer.
While the benefits are obvious (increased efficiency, reduced waste and increased consumer satisfaction), the strategic transition will not be easy for Felix’s business. This brings us to the next step.
Step 3. Find your partner.
Felix saw an opportunity to look beyond health insurance to companies that had been on a similar journey of using technology to create real customer value and competitive advantage.
He landed on the market leaders of the Australian banking sector – Commonwealth Bank, Westpac, National Australia Bank and ANZ. They had gone through a similar revolution to become providers of a digital experience at nearly every touchpoint. By studying them, Felix learned what had succeeded and, just as importantly, failed.
Their experience showed Felix how he could leverage the power of automation to improve customer experience and drive innovation through, for example, building a customer app. He was also able to identify the technical skills his company would need to drive these changes forward.
At another company, one of the largest cosmetic companies in the world, one of the senior executives, Tony, studied Red Bull, the Austrian manufacturer of the famous energy drink. He was impressed with the efficiency with which Red Bull managed its audience through its media channels. His company and Red Bull have even teamed up to create a men’s grooming and skincare line. This produced a strategy to reach a common target market, the young male audience. They created an “activation” at a major Australian supermarket chain, Woolworths, to jointly promote his business and Red Bull products.
Then there’s Emma, who runs a social enterprise providing jobs for people impacted by the justice system. The company packages and delivers groceries to offices and factories. The lack of a proper business strategy was cited as one of the shortcomings of social enterprises and Emma needs to improve the performance of her organization to be truly business-like.
His inspiration is the automotive industry. By studying Toyota, Emma and her team discovered ways to improve customer service by increasing order fulfillment accuracy, order processing speed and delivery speed – all important factors for any competitive advantage.
Overcome your reluctance
Why aren’t more companies doing this more often?
Tony suggests that one of the obstacles is the “organizational culture”. He says, “How do we get out of our own four walls and really start looking outside of our industry and what we do?
And AG Lafley describes how, when he was CEO of Proctor & Gamble, he paid far too much attention to internal demands. He constantly had to fight against the “gravitational pull” from within. It’s a wonderfully descriptive metaphor for what most managers go through. Everyone plays on the actions and reactions of colleagues.
Another obstacle is that managers think their problems are unique. Felix calls this “false uniqueness bias.” While subtle differences certainly exist between industries, it is highly likely that broader strategic issues are shared across other industries.
Emma refers to an “illusion of validity”. Managers think they know their business better than anyone and outside input could never help.
. . .
My experience with Frank, in my opening story, was a real red flag. I’ve come to realize that strategic thinking and strategy design often hits a dead end and management teams just spit out strategy as usual. Keep an eye on this and jump ship, if necessary, to gather strategic information from other industries.