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10/12/2020

Strategic Incapacitation

Arnaud Montpetit Président

“Studies have found that two-thirds to three-quarters of large organizations struggle to implement their strategies.” - Donald Sull, HBR, March 2015 Ouch. How is this even possible?

To be honest, this question has been haunting me for years. From a professional point of view,  developing an approach to thinking about and activating strategies for our clients—in an ever-more distinct and concrete way—is one of Poudre Noire’s competitive advantages.

 But it’s on a social level that this question really gets to me. If three-quarters of organizations are having difficulty implementing their strategies, that means three out of every four organizations are failing to adapt at the right speed, bring innovation to market, reinvent their industry, solve their challenges, and improve the lives of their employees and clients. 

On top of that, this sad plight isn’t just confined to private business. It is the reality for any organization where humans collaborate and work towards a common goal—from non-profits to foundations, governments, hospitals, and public institutions. In other words, a strategic plan can mean anything from a digital transformation plan for an SME to reducing wait times at a hospital.

This kind of strategic incapacitation within our organizations is sneaky—it slows progress, diminishes our impact on key societal challenges, and inevitably affects our quality of life.

And yet… we keep doing things the same way, year after year.

Rethinking what strategy means

From Porter to Christensen, Martin, Kim, and Mauborgne, many brilliant minds have come up with theoretical frameworks to help us create strategies. Without a doubt, the issue isn’t our strategy toolbox, but rather the way we continue to use our strategic tools.

Over the last few years, I’ve had the opportunity to support big and small businesses alike, in every industry, as well as teach and study at the graduate level in management school. In my humble experience—and with the utmost respect for my colleagues and clients—I’ve discovered that the way we teach and apply these strategic tools is simply not adapted to the age of great change we’re living in.

It seems obvious to me that the problem starts in management school, and then becomes amplified in the workforce. We train and give key roles to managers who approach strategy from a purely financial, pragmatic, linear point of view—without risk or openness and devoid of creativity—which completely neglects the human element, which is a key to strategic thinking. In fact, for far too many, the more we dehumanize the approach, the more credible it becomes.

In 2020, we need to remain open to as many realities as possible. It’s not normal that managers today gnash their teeth whenever I ask them to speak to their employees on the ground, in factories, and in stores, before undertaking their strategic thinking. Yet this is key to the success of the exercise. 

In other words, our tools may be modern, but our way of using those tools remains stuck somewhere in the 1980s—back when humans were a variable, the CFO held the divine truth, and optimizing the process was the one and only competitive advantage a company had.

If I may caricaturize, the results almost always look something like this: A consulting firm sits down with senior management, opens an Excel spreadsheet, analyses the market, and plans a few stiff strategies to roll out over the next three to five years. This plan is limited to the ambitions of a small team, offers no exit strategy, and leaves little room for flexibility. Next, the president holds a townhall and imposes the plan on the rest of the company. Within a year the plan has been shelved, and the rest of the timeline is spent purely improvising. The management team presents the board of directors with key performance indicators that are more closely connected to the market than their own actions. Two years later, the process starts all over again.   

Strategy in an era of complex challenges

Over the next few weeks, I will share with you the results of a good few years of reading and thinking about what strategy should be in this day and age. That is, in an era of complex challenges. The goal here is to start a constructive discussion that will help today’s strategists—and tomorrow’s. I am not so pretentious to think I have all the answers, though. For me, it just comes down to strategy being simply: 

Iterative. Strategy is too often seen as a catalyst for radical change within an organization. As if the goal were to break everything in order to build it up again. Yet this is precisely the approach that leads to failure, when there is too much pressure to change everything too quickly. Strategy should be iterative and incremental. 

Human. Far too often, I have seen strategic exercises that begin with finances—never stopping to consider the team seated around the table, the employees on the ground and, most importantly, clients. Your KPIs are important, but those are only dealt with later on in the exercise. Humans always come first.

Creative. Complex challenges require a big dose of creativity, which will translate into your biggest competitive advantage if you can get your team onboard. Your strategic exercise must leave time and space for creativity to flow. 

Democratic. I have always opposed the idea that anyone can be a strategist, because it takes experienced professionals to lead strategic exercises. That said, strategy belongs to everyone, not just a handful of gurus. A strategist must be open to as many ideas as possible from their organization, factory, or board of directors.

Organic. Dy definition, strategy is a set of tactics that are required to win. Seen this way, strategy dictates tactics (which is what I believed for a long time), or else tactics dictate the overarching strategy. Today, however, I believe this is an evolving process, where strategy adapts as tactics do, and modifies tactics elsewhere in the organization—in an organic and living way.  

I’m aware of how much this still reads like philosophy at the moment. My goal is to shine a little more light on these concepts in 2021, so that they can add to your thinking and help you quickly put strategic best practices to work for you.

 


Photo credit : Possessed Photography / Unsplash

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