Well, it’s only right that we start this blog with definitions of process and outcome. It would be ingenuous of us to assume that you all understand the two strategy management imperatives.
Process: a series of actions or steps taken to achieve a particular end
Outcome: the way a thing turns out; a consequence
It’s apparent that process-focus attracts big ceremony and grandiosity. Process paradigms overly plan, discuss, and celebrate products that are the result of complex processes. Process-outcomes, in this case, the strategic plan document, are celebrated more-than the results of the actual activities/tasks in the plan.
The irony is that organisations celebrate the finalisation of the so-called strategic plan document at palatial ceremonies, but not the actual achievements as and when the plan gets executed. You have been invited to strategic-plan commissioning ceremonies, but rarely at outcome achievement ceremonies. The latter is a quiet affair.
Apparently, the traditional firm’s obsession with process dictates that they celebrate ‘process-outcomes’ like above, and not the actual signature ‘value-addition-outcomes’ that should form the core of the strategic plan. Perhaps, and we write this with a lot of caution, there is nothing of significant value to celebrate at the end of strategic plans, as calls to show tangible value-addition outcomes are rarely answered.
Why do companies celebrate ‘strategy-process’ and the resulting glossy paper (read strategic plan) and not tangible ‘value-addition-outcomes’?
Well, the answer has to be that a conventional strategist, typically high-flying consultants, would find it hard to put strategy-outcome first and process-outcome second – it’s not in their DNA. After all, such strategists have been trained to believe that if one gets process wrong, the strategy would also be wrong.
Secondly, strategy consultant contract terms normally don’t go beyond producing a well-written strategy paper, and for the more lucky ones, workshop flip-chart paper and excel matrixes of completed strategy models
It was when the Effectiveness lab discussed strategy making vs execution gap, that ‘outcome’ displaced ‘process’ on the strategy management continuum in this Strategy OV series.
The strategy making vs execution gap:
This is a situation where the gap between conventional/hybrid strategy design and execution narrows. In effect, strategy succeeds when strategy making and execution are merged into one business activity. It’s a different way to manage strategy and calls for unique skills: leadership, strategy, design, and people
Companies have been forced by extremely turbulent and unpredictable business environments to pay more attention to the narrowing of the strategy-making vs execution gap.
Strategy management is increasingly becoming discontinuous as strategy is made and implemented simultaneously. Scheduled strategy reviews have been relegated to the backseat. Instead, just-in-time adjustments are made to strategy.
If strategy is now made and implemented immediately, strategy process has to assume a much less significant role. The luxury of time and detail that has come to be associated with strategy design is no longer possible.
Those with an entrepreneurial eye may have already identified a business opportunity for a real-time strategy design Enterprise Resource Program (ERP). The frequency and speed at which design and execution are happening require firms to leverage digitisation and automation.
Business owners and managers will embrace ERP’s that mitigate the narrowing development and execution gap challenges. Well, the go-getters should bring such programs to market
The downfall of ‘strategy-process’ and the rise of ‘value-addition-outcomes’:
- Seismic role reversal: structure vs strategy
For many years, structure has been known to follow strategy. But the world is witnessing a flipped reality where strategy is starting to follow structure instead. Stanley McChrystal’s example of the US Army copying (and we suspect without copyright) the Al Qaeda loose structure in Iraq to win the war between the two foes is a poignant example of this reality. The American’s were forced to accept that structure (design/architecture) was the one most important factor that had to be manipulated to win the war. Apparently, this went against everything taught in military strategy classes
In itself, structure has become the strategy. With strategy increasingly becoming a short-term and unpredictable phenomenon, what creates sustainable value-addition in business is the ability to seamlessly tweak strategy to fit a particular unique scenario. A loose structure is considered an enabler of agility and resilience at the firm. Fluid structures, driven by interconnected and digital business environments, dictate the choice of strategy
When strategy follows structure, strategy making becomes an everyday matter, and consequently process-‘lite.’
Theorists like Alfred Chandler must be turning in their graves
- Org. turbulence turns strategy into a short shelf life product
While old strategy was grounded in extensive analysis and the accompanying trending, the new normal is the very opposite. Managers may know what is to befall their organisation this month, but may never know its actual impact on the organisation’s business value chain.
Stanley McChrystal quotes the Arab revolution that started in Tunisia. Tunisia bureaucrats and politicians knew that its Youth were unemployed and restless, but little did they know that the act of one youth and vegetable seller Tarek El-Tayeb Mohamed Bouazizi setting himself on fire would trigger a chain reaction that may have changed politics forever in Algeria and the Arab world
If organisations can’t predict with certainty the impact of tomorrow’s happenings on the future of the business, the best safety net is an OD. mesh that can withstand sudden impact.
Organisations that will survive the status-quo will morph like an amoeba – they will have loose structures that are seamlessly interchanged to fit unique situations that unpredictable environments bring on to businesses. There is simply too much discontinuity for heavy process-investments to remain viable
The governments in Egypt, Tunisia, etc. did not have the structures and people to deal with the discontinuity brought by the youth-power-surge and the rest is history
- Millennials in the executive suite
A major factor influencing how firms are run, yet disregarded by many, is the entry of the millennial generation into the executive suite. Conventional strategy design and execution is overseen by those at the top of the hierarchy.
However, the disdain by the millennial generation for longevity at one company undermines the very ethos of the executive suite holders being the vanguards of strategy management at an organisation. Millennials don’t stay long in jobs, and many times, corporations have found themselves short of pedigree in the corporate suite and strategy has suffered.
It remains to be seen how long the latest and perhaps youngest millennial to be appointed to a blue-chip executive suite will stay in the role. Heinz, an American corporation, has appointed a 29-year-old to its CFO job.
Bottomline – when the corporate suite is changing every two to three years, and it’s a generational thing that firms can’t-do much about, they are also forced to consider strategy a short-term phenomenon.
Strategy leads simply come and go, forcing firms to think of strategy as a short shelf life product
- The Google factor
Digitization and Automation have brought knowledge and facts to our doorsteps. Data that took weeks or months to collect is now gotten at the press of a button, many times, on a device as small as a mobile phone.
We have written on the Effectiveness lab that strategic planners of old got mystical power from controlling organisational data and its analysis.
Today, you can get data and information 24/7 from the internet. In effect, data gathering and its conversion into relevant information have been compressed into an activity that takes minutes and in some instances milli-seconds.
Shortening the analysis phase of strategy making has turned strategy design into a real-time action. That is the OD. power of Google that we at times take for granted
With the above four ‘strategy-process’ busting factors, what used to be called the short-term on the OD. clock is now the longterm while the long term is an anathema to organisations. Managers and leaders that are prepared for this new reality shall embrace the workings of the bionic-entity and will deploy all OV’s in the increasingly instant-strategy design and execution scenarios.
Leadership, Strategy, Organisational architecture, and People OV’s need to be applied in sync to create signature value-addition at firms – it’s bionics at companies
Managers should ask whether they are primed for an ‘outcome’ as opposed to the ‘process’ laden strategy management paradigm.
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