Why Succeeding with Strategy Doesn’t Start with a Plan
Strategy is about thinking differently, and that starts with thinking differently about strategy.
Strategy is often perceived in a linear fashion: This is where we are, that is where we want to be in 3–5 years’ time, and these are the objectives we must achieve to get there. This linear approach to strategy development and execution is ritualized through annual strategy retreats by the executive team, cascading of the objectives along functional lines, and calendar-driven process of budgeting, resource allocation, and governance. All of this provides the illusion of control and certainty, and fits naturally with how our minds are evolved to think linearly and locally in the face of challenges.
External Context
When you place this way of thinking about and acting on strategy within the external context practically every organization finds itself in, you quickly see an enormous mismatch. In addition to various levels of political uncertainty, social unrest, and natural phenomena and disasters, every organization is affected in one way or another by advancements in artificial intelligence and technology, interconnectivity, and the network effects among them. Even when a single containership gets stuck in the Suez Canal for a few days, the whole world notices the supply chain effects.
What this means, is that the change organizations must navigate by means of their strategy to remain relevant and successful, is multidimensional. Change is perpetual, occurring all the time; it is pervasive, unfolding in multiple directions at the same time; and it is exponential, accelerating at faster rates.
Mismatch
Linear approaches to strategy, centrally developed and directed, locally executed, are not designed to deal with the challenges and pressures of complex, uncertain, ambiguous, and highly dynamic business environments. To address this mismatch, it is tempting to start by designing new strategy frameworks and models. That, however, is not the real problem. That would be culture.
Culture
In simple terms, culture is about how we do things around here. It is shaped by the beliefs, values, and goals that guide daily life for a group of people. Culture matters to people, because it proves a sense of belonging and safety, which creates space for mastery and, in combination with meaningful goals, contributes to a feeling of fulfilment. Further, the more we are exposed to the cultural behaviors of the group we belong to, the more we accept these behaviors as part of our own cultural identity.
When you place this notion of culture within the context of an organization’s form, e.g., hierarchical or matrix, you see that, typically, there is no one culture, but many local ones that may or may not have an overlap with neighboring ones. In other words, you encounter multiple, different cultural identities: how things are done in the finance department is not the same as within the research & development department, which is different from how things are done within the executive committee.
Cultural identities influence how people interpret and react to situations. When they feel under pressure, which the assault of multidimensional change on our attention and workload can easily affect, people tend to subconsciously revert to the behaviors that make them feel safe and accepted by their group peers. As they do this, they erect invisible barriers between their own and other groups, including management layers, to protect their identity and interests.
Irrelevance
When strategy is approached in a linear fashion and people are faced with the unrelenting pressures and challenges of multidimensional change, it means that there is a large chance that many may pay lip service to the corporate, business, divisional, or functional strategy they hear or see being cascaded to their level. This behavior is what the expression ‘culture eats strategy for breakfast’ is based on. The consequence is also that the organization might find itself over time being swept aside by Schumpeter’s Gale of creative destruction, with customers switching to other providers who are better adapted to delivering on their promise in the face of prevalent business conditions.
Shared Cultural Identity
What all this means for strategy development and execution in a world of perpetual, pervasive, and exponential change is that it needs to be rooted in cultural identity, ideally a shared cultural identity, to lower or remove invisible barriers between people that hamper adaptability. In simple terms, strategy is then not about where are we and where do we want to go, but about who we are and who we want to become to remain relevant for our customers.
Strategic planning and execution of initiatives then also take on a different form. Rather than being calendar-driven, directed and governed top-down, they become more flexible, integrated across multiple functional, managerial, and organizational lines, and something that is part of us through empowerment and an intrinsic sense of ownership. In metaphoric terms, paraphrasing Daniel Coyle (The Culture Code), the organization then becomes “like a flock of birds flying through a forest at high speed, going around trees, staying together, moving toward a shared ‘North Star’.”
When you can achieve this shift in perspective and culture, and when the desired cultural identity resonates intrinsically with your people and key stakeholders, it engenders subtly a desire to not let each other down, because you don’t want to be the one who is going to hold others back or tarnish your shared reputation. When you have such a culture as the basis for how your organization works and acts on strategy, it is amazing what sustainable impact you can make in the world.
