Why Most Strategy is Bad Business
As I write this, it is early in the new year 2020. As has become the custom these days, folks of all nomination are penning their predictions for the year ahead, or in the case of this year, the decade ahead.
Occasionally someone turns up with an interesting observation, sometimes a humorous offering makes waves, and often someone predicts the rise of a particular technology, product, or service that they just happen to sell… Yeah, we see you.
Nevertheless, it has become a festive season tradition to rest up and read through these vast ponderings. For me it is also an annual reminder of why the bulk of corporate strategy is so woefully inadequate.
Got your attention now, right?
For those accustomed with my work, you'll know that growth strategy faces a time of change and challenge like never before. Digital Darwinism, coined by Evan Schwartz back in 1999, is a time when the society and technology is evolving faster than businesses can naturally adapt to. Today, this phenomenon is occurring at breakneck speed.
In such a time of change, our dated corporate modes of strategy creation, borne largely of the industrial era, are being rendered obsolete.
I am often introduced as a “Growth Futurist”, but most people misunderstand it. The term “futurist” is largely associated to a big show, to technological predictions up in lights delivered by a charismatic story teller, hypothesizing amazing and mind-bending concepts that provoke and excite our imaginations. We dream of an intoxicating tomorrow, of worlds where our social fabric and life experience is re-oriented around the emergence of driver-less cars and robotic homes, sensor tattoos and tourist trips to outer space.
That’s all fine – in fact I kind of love contemplating that stuff myself – but Futures thinking has less to do with a tech-centric dog and pony show, and much more to do with critical strategic thought. Some call it the practice of foresight, and it is the composition of methodologies that allow us to establish preferred futures.
In fact, Futures thinking is an essential component of the social sciences, a domain long ignored by corporate boardrooms. Much to their great detriment – and I make no apology for saying it.
Here’s a question for you though. Do you remember your ninth birthday?
It was around this age that the foundations of your world view were set. Prior to this, the world was a blank canvas, an unlimited panacea of opportunities and possibilities. Nothing was out of the equation. Nothing was irrelevant or ridiculous.
Sadly, through the sociology of our upbringing and micro media influences, we settled on the foundations of the view of the world that we would hold onto for the rest of our lives. We adopted our personal paradigm, and all those possibilities and opportunities that exist outside of that paradigm began to fade out.
So it is with corporate strategy.
In fact, it is very rarely strategy at all. It is largely a cycle of iteration, the model of last year applied again with the odd tweak for this year, an approach that we will apply next year, and the year after, and the year after in perpetuity.
A few years ago, I had the distinct privilege of studying under the renowned Professor Sohail Inayatullah, Chair in Futures Studies at UNESCO and USIM; and the widely respected Doctor Robert Burke Director of Futureware Consulting. Both are as warm and generous as they are smart and insightful, and I quote them here:
It is very important we understand that strategy is what you actually do. Strategic and business planning, although very important, is still just espoused strategy – it is not strategy in action. This is why futures thinking matters - it is the thinking you need to do before you even think about strategy. It is the rigor needed to create the relevance.
Most companies move straight to strategy, or at least “espoused strategy” as Inayatullah and Burke call it. So when we are faced with the radically changing conditions bought on by Digital Darwinism and for instance, phenomena like the collapse of institutional trust, is it any wonder that so many organizations are struggling with outmoded customer programs, cultural confusion, declining performance, and operational challenges?
Many brand owners who have battled to really define the “why” of their company (to quote the great Simon Sinek), and the intrinsic identity of their business, may well begin to wonder if the lack of Futures thinking is the missing piece of the jigsaw.
Equally, others may start to wonder if the “why” that they have created for their brand is little more than a counterfeit veneer, papering over a company whose core “strategy” remains largely the same even as the world – and the people that make up its markets – change all around it.
To put it bluntly, the ongoing iteration of current paradigms masquerading as “strategy” is killing the potential of companies everywhere. As Nicholas Copernicus (1473-1543) once said:
To know that we know what we know, and to know what we do not know, that is true knowledge.
Without this “true knowledge” it should be little surprise that it is claimed that less than 10% of strategic plans are actually implemented. Yeah, you read that right: 10%!
Whilst that is confronting, the economic virtues of Futures thinking are compelling. The report ‘Technological Forecasting & Social Change’ by R. Rohrbeck (2017) found that:
“Future prepared firms… had a 33% higher profitability, and a 200% higher market capitalization growth…”
Man alive. Just think about that for a moment.
Knowing How to Know
Organisations that truly crack this nut, operate at a level that others simply never understand. They can only do so because of the insight, and the courage of their leaders. Why?
Because in order to know how to know, an organisation must apply a set of critical capabilities and processes, which collectively, allows it to operate outside the current paradigm or in multiple paradigms at the same time, re-imaging and re-configuring its future with deep insight.
Make no mistake. This takes courage.
It does so because it renders a leader vulnerable. After all, senior executives have established their careers on the old order. To even contemplate tearing it down quite understandably strikes fear in those whose very sense of security and value it is derived from it. Promoting a state of deeper mindfulness risks being derided by senior peers or being seen as “flaky”.
In addition to courage, it requires a re-learning and a significant investment of time. To make that point, I reference Richard Normann (2001) who argues that there are no less than five domains of critical capabilities (social, cognitive, design, spatial, and power); and three domains of critical processes (innovation, creation, and “The Great Organisation”).
There is no doubt about it. The more I have studied the ingredients of contemporary business growth, the more I am convinced that corporate strategy today is broken, and that Futures thinking offers a key to its recovery.
Yet such concepts seem so far away from what we have accepted as corporate norms for so long. It is challenging, for sure, but what if we could set that pre-nine-year old free again, this time in a boardroom? Imagine it!
After a decade that saw the large scale rise of the internet, mobile, cloud computing, and social media change our societal and business construct beyond recognition, we can be sure that our evolution will only increase in pace and complexity as we enter the 2020’s. AI will see to that almost single-handedly, but there is so much more.
What is coming? What are the ripples? Could we re-invent? Is who we are today, relevant tomorrow? Can we even see the horizon? Can we see at all? Do we dream? What are we missing? What could be?
When we know that… No, when we know how to know that, only then can we “do” strategy.