Traditional models of strategy making do not take advantage of what the internet age can do in terms of finding new ideas. That’s partly because many executives have a narrow view of the process, afraid that if they open it up they’ll mess up decision-making. Perhaps they are also afraid that they will only expose their ignorance by looking for ideas. And finally they worry that the whole process may become unmanageable. Leaders who fall into these traps will lose. Instead, CEOs should map out their process to find out where they lack ideas — most likely at the information gathering stage — then consider that part of strategy making as a process of exploration and discovery. what they don’t know, like. an exercise in innovation, and, finally, accept the number and complexity of the ideas they receive.
For most of the 20th century, business strategy was usually done by a small executive team that sat down to work on solutions to “strategic issues.” Typically, this team is comprised of the CEO and his direct reports. They analyze trends and changes, analyze competitor activity, analyze financials, and create solutions, which they get in a strategic plan.
It is no longer possible to rely on this industrial approach to strategy development. The internet age has created highly informed, well-connected user communities with very strong opinions about what businesses should do. The confluence of high-speed internet, social media, sophisticated search and mobile connectivity has given those users unprecedented access to knowledge, choice, and influence. It is no wonder that senior executives at Proctor & Gamble describe the old top-down approach to innovation and strategy design as a “broken model.”
So why are so many companies clinging to it and how can they make the switch to what is described as the “joining age?”
There are basically three obstacles that trap executives in the old model:
- A narrow view of the strategy process. Paul is the founder and CEO of a business that manufactures complex communications cables for the defense, aerospace, telecommunications, and transportation industries. When I asked why he didn’t use broader participation in designing his business strategy, his answer was immediate. “We don’t have a strategy by popular vote.” This blanket response comes from a narrow view of the strategy process. What Paul doesn’t know is that participation is not the same as decision making.
- Fear of losing face. Ashok heads a government-owned waste disposal business that operates a landfill site. It removes all types of waste, from green waste to asbestos. Ashok’s business environment is far from stable as there is increasing pressure to reduce and recycle waste. At the same time, his landfill site will be filled within the next decade and other sites will be difficult to find. Valuable ideas about the future of business and its mix of activities are hot topics locally and online – from environmentalists and hard-nosed local entrepreneurs. When I suggested that he might use their ideas through a participatory strategy he somewhat jokingly replied, “People might think I don’t know what I’m doing.” For Ashok, the fear of losing face outweighs the benefits of accessing potential solutions.
- Fear of process overload. Can you come up with more ideas? Some executives think “yes.” Managing people’s suggestions takes time – time to collect them, time to sift through them and time to report back to contributors. Maureen heads a government business that issues vehicle and trade licenses. When I suggested that he try participatory design strategy he expressed this risk: “That would let the cat out of the bag. It takes a lot of time to manage – how do we process all the information? “
There are three ways that CEOs and other senior executives can overcome obstacles and shift to adopting a more participatory approach to strategy.
Map your strategy process.
The strategy process involves at least four stages. Two of these, strategic analysis and idea generation, feed into the third, strategy selection. These three make up the design of the strategy. The fourth is the implementation of the strategy. Of course, there are feedback loops in all of this.
CEO Paul’s fear stems from his narrow view of the strategy process. He sees it primarily as “choice.” So, if you’re in that boat think again. Participative strategy does not take the power of choice away from decision makers; it just gives them a richer field of options, especially in the idea generation stage.
So, step one, map your strategy process and determine where you lack innovation and ideas. This is where participation can be most beneficial.
Name your weakness.
Developing a strategy is a process of discovery. It’s in what you don’t know about that you’ll likely find the best answers.
Consider the case of Rachel, the CEO of the government-owned business that runs the state lottery. He wasn’t sure which way to go so he convened his new board to learn about changes and trends in the industry and to explore strategic options. But he also included the executive team and other staff in a session of 26 participants. It’s called the “blue skies session.”
Instead of pretending to know everything, Rachel actively canvasses for ideas that can feed into her organization’s strategy process. He doesn’t seem to know what he’s doing? On the contrary – Rachel’s inclusive and participatory process demonstrated leadership and motivated the planning process.
Planning for processing.
If you accept that strategy is about discovery, the next step is to embrace the complexity and quantity of ideas. Strategy development should not be viewed as a repetitive, controlled business process, but rather as an exercise in innovation. A good example is given by Megan, general manager of a regional city council, who saw the cessation of control as an opportunity for new thinking. He and his team created strategy documents primarily focused on addressing state-government requirements. They are dull, box-ticking exercises that lack innovation and conviction.
To change this, Megan began involving the community in developing options for the council’s strategic plan. He created a smart table with the main stakeholders of the council on the left side and the engagement method above.
Methods include online engagement, summits, forums, special meetings, and surveys. One is the “deliberative engagement process,” where 50 residents — randomly selected to represent the diversity of the entire region — participate in a community panel to help define the council’s future vision.
Each is tailored to a type of stakeholder, for example, local businesses or senior citizens, and each includes a plan for processing and classifying the ideas generated through that engagement. An evaluation team was used to code and categorize the responses, collect statistics, and present a summary of the ideas that most appealed to the executive and councilors.
As Megan reported: “We’re not going back to the old ways. The innovative, participative approach gives us the confidence that we deliver what our citizens want as an executive team. And community understanding of our strategic plan leads to faster implementation. “
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Your strategy design and execution environment has changed with the advent of the digital age. People are used to forming and expressing opinions on everything – and your business is no exception. But this is a good thing: The strategic understanding the market has become a vast resource waiting for you to tap into. By embracing the new reality you can collect ideas from a wider group of employees along with main stakeholders outside the organization such as clients, suppliers and the community. It’s not always easy – we are still in the early stages of getting it right — but the continuing explosion of information, and the increased complexity it brings, is the strategic challenge of our time.