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Status Quo: Strategy experts argue that most so-called strategic plans are actually rolling resource budgets and market-share projections. These are certainly important, but they won’t transform a company’s performance and simply cannot deliver what leaders want: A Pathway to Substantially Higher Performance.
-> Here are a view fantastic HIGHLIGHTS from a McKinsey article.
1. Real strategy happens when an organization finds and exploits a change in the business landscape, in technology or in how humans perceive the world and drive this opportunity with speed, skill, and determination.
The most successful companies nurture a corporate strategy that focuses on spotting opportunities as early as possible and exploiting them successfully before the competition. Yet, this message is in clear contrast to reality. Most executive use still 360-degree feedback, outsourcing, creating internal alliances, cutting costs and the like to develop a strategy. Most companies also don’t have the resources and ability in available skill sets and operational structure to spot changes in their markets and to act fast and decisive.
2. The Entrepreneurial Strategy: Steve Jobs described his strategy as: “I am going to wait for the next big thing”
His strategic methodology was waiting for the right moment for a predatory leap [...] through a small window of opportunity and staying focused on those opportunities and not on maintenance activities. This is what characterises a real entrepreneurial strategy.
3. Key Touchpoints to an Agile Entrepreneurial Strategy
1. SEPARATE AND BE AWARE
OLD: Up to the 80th, the established wisdom was to decentralize strategy into business units, which would each generate a strategic plan that would then be presented to senior management. [...]
NEW: Today we’ve seen a dramatic re-centralization of strategy work. Annual resource budgets should be separate from strategy work. Strategy should be a separate, long-term opportunity-driven process that is resourced to act. This means investing in resources that will be made valuable by the changes that are happening. [...]
CORE MESSAGE: This is the only way to exploit changes in your environment, in technology, consumer tastes, laws or competitive behaviour and ride that change with quickness and skill.
2. SPECULATIVE JUDGMENT
You can’t get rid of ambiguity and uncertainty—they are the flip side of opportunity.
Changes don’t come along in nice annual packages, they don’t come as opportunities but as challenges. Technology often overshoots consumer demand, and nobody can 100% predict which positions will pay off in the future.
CORE MESSAGE: It is the nature of strategic thinking, that it is fundamentally an alternative for having clear connections between the positions we take and their economic outcomes.
3. TAKE A POSITION EARLY
Strategic thinking helps to take positions in a world that is confusing, uncertain and constantly changing. Speculative judgments are the essence of strategic thinking and they are the starting points for taking a position.
OLD: The opposite to strategic thinking is to run spreadsheets as a base to define the future sustainability of your organisation. If you want certainty and clarity, wait for others to take a position and see how they do. Then you’ll know what works, but it will be too late to profit from the knowledge.
CORE MESSAGE: Real strategy starts with identifying changes early, taking a clear position and developing strategies to exploit them.
4. SKILL POOLS & STRATEGIC INSIGHT
There is no substitute - companies need to build or have access to the right skill pools to be able to quickly and skilfully access resources and knowledge.
It's crucial to understand that an entrepreneurial strategy doesn’t include a leap of imagination into the far distant future. Changes are happening constantly in front of our eyes. BUT - you just need the right set of eyes to spot and validate them.
Meaning, being in the right industry does matter, but being good at what you do matters a lot more.
CORE MESSAGE: An entrepreneurial strategy is open minded, not trapped within their own fields of expertise. It combines pools of knowledge and resources quickly and skilfully.
A strategic insight is essentially the solution to a puzzle. Only a small group of smart individuals can analyse these kinds of things.
CORE MESSAGE: A functioning skill pool needs essentially not only to be multiskilled but moreover cover areas of knowledge that aren’t typically combined or part of your core business. The broader the understanding of the human experience in these pools, the better entrepreneurial innovation you will have. [...] (Think Diversity).
5. BE AWARE OF BIAS & VALUE DENIAL
Strategy needs to be dynamic in order to ride those forces of change and trigger actions early. One of the most important reasons that hinder executives to look beyond the standard consensus view of what is happening is the endless list of biases that prevail undetected. [...] Another common cause is 'value denial', which is essentially a business opportunity that is both desired and feasible but is not supplied to the market. [...]
CORE MESSAGE: Every change and innovation creates a new value denial. Dynamic strategy demands to look at every change from new, unusual and different perspectives, ask what value denials it will trigger, how this can be fixed and repeat this again and again.
6. DEVELOP COMPETENCY OF CHANGE
How do you accomplish a dynamic strategy in a world that’s changing so quickly? Competencies are created by activity. Companies get good at something by doing it. We create our competencies by making bets on positions and putting the right resources in place to develop those competencies.
CORE MESSAGE: Competencies will give businesses a sustainable advantage for a certain period of time, but be aware, today's advantages have only a short shelf life.