Leadership practices play a key role in shaping the form and outcomes of strategy processes in an organisation. As individuals and collectives to whom others pay attention, broader stakeholder attitudes and activities will be influenced by how leaders are perceived to think, talk, and act about strategy. This leadership influence on how strategy happens can arise from the “tone from the top” set by those in formally held positions, or through others trusting in the wisdom of a highly respected colleague without official standing.
If a leader or leadership team aspires to build adaptive or agile capabilities in an organisation, it then follows that their strategy practices must reflect similar characteristics. By acting in a dynamic way, and with authenticity and openness, organisational leaders can encourage others to follow suit. Leading by example, an environment can be nurtured in which flexible, adaptable strategy processes and practices can flourish more broadly. How this might be achieved effectively will depend on context—there is no specific formula or prescription that will guarantee the development of a flexible strategy process. Instead leaders might want to consider the following points as they reflect on how to best act in their own circumstances if they aspire to build organisational capacity for adaption and agility.
1) Exemplify humble leadership as a key enabler of a flexible process approach to strategy
The humble leader values the opinions of others, making time for candid dialogue and active listening, even if the messages received are challenging. Under the auspices of a planned approach to strategy, leaders often feel pressure to stay wedded to a vision and set of objectives they articulated under very different circumstances. Humble leaders accept that the changing context will often require them to change their thinking, potentially at short notice and to a great extent. The humble leader will talk honestly and often—admitting what they know and don’t know, and how their aims and uncertainties are impacted by changing circumstances and new information. As the leader sets the tone for the rest of the organisation, adopting a humble approach can open up a level of honest dialogue from others that inspires trust, candour, and high-quality information flows that greatly increase the possibilities of effective strategizing. This is especially important in times of uncertainty.
2) Increase the frequency of decision-making conversations
Commit to making decisions whenever required, rather than on a fixed schedule set by committees, budgets, or tradition. This typically will mean far more frequent decision-making conversations, possibly of a smaller scope. Imagine a navigator’s hand on the rudder of a ship dynamically choosing to adjust left, right, or remain constant rather than maintaining initial settings regardless of conditions encountered. Similarly, continually taking regular small-scale decisions avoids the pitfalls of trying to divine the future in conditions of high uncertainty.
3) Embed learning as a crucial feature of strategy process
Increasing the frequency of decision making also increases the extent to which each decision can be treated as an experiment. If expected results of decisions do not materialise, then the experiential learning gained can be built into the next round of decision making. This learning-by-doing mentality underpins a capacity to navigate or way-find out of unprecedented crisis conditions. If the world has changed around us, then fuel to the process of adaption can be experiential learning insights.
Further, digital disruption from sources such as social media, open data initiatives, and Internet of Things connected devices, now make “big data” a reality for most organisations. Investing in skills, or contracting in capabilities, in analytics can uncover valuable, contemporaneous business intelligence as a learning input to strategy activities. New digital ways of working (such as virtual meetings, social media messaging, and collaborative platforms) also create more opportunities to connect and involve others daily in strategy work. It is important that engagement tools are used to harvest insights and learning, rather than just broadcast leadership perspectives. Deployed carefully, learning through mass engagement by digital means can greatly enable strategic responses to the current Covid crisis.
4) Seek options to help preserve future capacity to act alongside dealing with current issues
In times of stability, holding options open might be considered inefficient and a wasteful use of scarce resources. However, when the future is highly uncertain, there is a process logic to making small investments in options until it becomes clear that they will not be needed.
Consider the apocryphal tale of Microsoft visiting a trade show in the early days of personal computing before Windows became the de facto industry standard. Microsoft brought multiple variants of possible operating systems to the show in stark comparison to their competitors who had invested strongly behind single technologies. Microsoft’s logic was that, with high environmental uncertainty, the only way to be sure of maintaining the winning option was to invest in all possible technological development routes until the context clarified. As events unfolded and contextual knowledge was gained, irrelevant options were defunded and focus was returned to the most fruitful initiatives.
Strategy as a flexible process will attend to the needs of now whilst working to preserve the potential to respond to possible needs of the future. Managing options is possible when a broad range of stakeholder inputs are received that help the strategist gauge the lie of the land and maintain capabilities that enable a range of conditions to be addressed. The use of foresight tools, such as scenario thinking, are valuable as methods to hold strategic conversations that identify options to meet multiple, plausible future organisational needs.
5) Encourage creativity and diverse thinking
To gain most from a processual approach to strategy, invite novel thinking from a wide range of stakeholders. For example, a useful starting conversation could be to ask stakeholders how usage of the asset base might be adjusted to better address the possibilities and constraints of the current situation. This could trigger creative dialogue about the “affordances” of resources—the many possible productive uses of the asset base aside from their formal designated functions.
A Covid-related example is how many businesses in the alcoholic drinks industry have adapted their equipment to produce hand sanitizer. This creative redeployment of resources created new revenue from otherwise idle assets as well as delivering a social good.
6) Know the bottlenecks and constraints to your strategic adaptiveness
When attempting to shift strategy towards a process-focused approach, it is useful to understand what factors currently set the pace for adaption of strategy. Under current operating conditions, how are decisions being made? Where is strategy being delivered, and where are outcomes failing to materialise? In what ways is strategy failing to keep pace with contextual change? Leaders need to be open to the possibility that it is themselves that are the critical constraint in the organisational speed of adaption of strategy to environmental change. With a sense of what is constraining strategic adaptiveness, leaders can take steps to resolve bottlenecks and allow the strategy process to better flow.
It is likely that organisational leaders will feel pressure to create strategy to guide colleagues in the face of continuing environmental flux. Equally, it would seem unreasonable to think that all the best strategy ideas reside only with those at the top of the organisation. By opening channels of dialogue with a wide range of stakeholders, organisational leaders might install a flexible, continual process which co-creates relevant, impactful strategy. And in these unusual times, for organisational adaption and survival, we need such flexible approaches to strategy more than ever.
by David Mackay