KingChapman believes sustainable growth strategies must be viewed as an organizational transformation. The creation of sustained growth occurs in the face of rapidly changing market conditions, aggressive competitors, picky customers and uncertain governmental and regulatory environments. Given the rapidity of changes, it is impossible to anticipate what will be encountered in execution. Execution success requires quickly identifying changes, assessing this data, and acting accordingly. However, this iterative approach to strategy and execution is NOT how most business people have been trained. Instead most business people have been trained using the conventional linear approaches to strategy.
This linear approach assumes the prerequisite data is available to develop the rights strategies. Once the right strategies are in place, execution is sequential and will naturally unfold. Since the strategy is right, execution is less important, e.g., something that anyone can do. Evidence for this is how fluently execution is carried out by different groups of employees than those who were involved in developing the strategies.
What the linear approach misses is – the acts of developing strategy and execution cannot be disconnected. Important data can only be gained during strategic execution which must influence the thinking about strategies. Successful strategies are designed for execution and made flexible to incorporate feedback which occurs in execution.
Strategic execution is much more difficult than assumed and the place where many companies falter. What is not appreciated is that the problems in strategic execution are directly related to how the strategy was developed, i.e., the traditional linear approach.
Inventing New Futures
Growth strategies require a new future. If sustainable growth is not occurring, it is because key stakeholders like customers, employees and investors do not see the existing future as compelling. Companies have an implied future, whether they know it or not. The description of this future can be readily expressed by individuals in the organization.
KingChapman uses techniques to help you put language to this default future. As these descriptions are being developed, the consequences of the default future on growth become apparent. Usually, those involved in this exercise can readily see that the desired growth will be difficult, if not impossible, given the default future.
The next step is to have the same individuals invent or create a new future to which they could be committed and which would promote growth. This allows you to create strategies based on a desirable future that is not confined by the past. This step is essential for your organization to create growth strategies and transform your business while executing these strategies.
A senior client once said, “Since the future is made up, we might as well create a good one!” The growth strategies following that insight enabled his leadership team to transform a struggling company to taking it public on the New York Stock Exchange. Since then, this company stock has been a top performer in its industry sector.
Strategies from the Future
Growth strategies require significant changes. A future-back approach is best for developing these strategies. Thinking from a future in which success has occurred reduces the contamination in thinking which invariably occurs when the current issues and problems enters into the deliberations.
KingChapman uses a unique future back approach, which has proven to be highly successful in growth strategy projects around the world.
KingChapman believes developing and executing growth strategies requires a candid self-assessment. Starkness is a good term for effective strategic assessments. This requires getting data and facts, and letting go of preferences and prejudices. It ultimately depends on leaders using inquiry to enhance the group’s strategic thinking.
The assessment begins with a comprehensive look at the businesses markets, customer perspectives, changing market dynamics, capabilities, cost positions, financial performance, market share, product and service ratings, sales statistics, etc. Leadership is critical in assessments, since many managers will be defensive about their functions and units. This defensiveness often results in poor assessments of organizational capabilities, current customer relations, competitor’s strategies, and positions of products and services in markets. Quality assessment is essential for growth strategies, which depend on an organization’s capabilities to execute the strategies, Assessment includes identifying an organization’s capability deficits. Candor in talking about these capability deficits is often difficult for some executives, so finding approaches to having these crucial conversations requires creativity and leadership support.
KingChapman helps clients to identify factors in the background, including business design, strategic context, leadership capabilities and organizational culture. These background factors often are the most influential in execution.
An analogy for developing strategies without a candid assessment is like planning a road trip to a desired destination without knowing the point of departure. An organizational assessment includes the readiness of the organization to implement changes.
KingChapman has a series of possible interventions that have proven successful in evoking these conversations. For more information, see KingChapman’s Technical Note on Organizational Assessment.
Revising Business Design
Executing strategic growth calls into question the design of your business, as well as the appropriateness of your existing business model. Most businesses are not designed, per se, but have evolved over time in response to external and internal factors. The lack of current design becomes painfully obvious when developing strategies for growth. The outdated and messy business design is often a key source of suppressing growth.
Business design is an innovative way of thinking about your organization’s markets and the context for competing in these markets. The business design includes how your organization designs products and services for its customers, as well as its interconnected systems that shape delivery of those offerings. Business design can be referred to as a new agile model for business strategy. Its tenets include the latest applications of Design Thinking.