Hey Ryan: What’s the future of “strategy”?

Hey Ryan, you and I have been dancing around this question for a few weeks, so I thought it’s time to put it to the real test – let’s hang it on the blog and work it out. I’ve been really excited to see where some of the more unanswerable questions have gone; the harder they are, the more interesting things become.

We do a lot of work around “strategy”. It’s sort of an abstract concept, and it’s so overused, sometimes the word verges on losing its meaning. I went in search of a concise, useful definition not so long ago…I found a really nice definition from a designer named Barbara Ballard here. She defines it quite simply…

Strategy is the plan for how to compete.

I like that simple definition because, in practice, things get messy fast. A strategy can be a shared agreement that drives the businesses, it can be a constraint that helps people make execution decisions, it can be a guideline for handling the competition. When done well, and communicated correctly, a good strategy can create an amazing business.

Strategy as we know it has changed so much in the last 30 years (more, even). Some of this takes root in the popularity of MBA programs that encouraged us to build strategies assembled from industry best practices. Then, as accounting and computer systems allowed us to gather more and more data, we saw movements toward quantitative rigor and evidence-based decision making. Supply-chain optimization gave use six-sigma and the Toyota production systems. The evolution of software gave use enterprise planning and other real-time management tools. And throughout the whole period we’ve slowly been getting our head around how much organizations and culture play a huge role in how we do what we do. All of these elements compound and complicate how we formulate strategies. There are some bedrock concepts that seem to forever guide us, but as a rule this field is moving at serious clip.

On top of all this, we work in radically new ways. This shift in communication has completely changed the way we approach strategy – the quicker a company can serve and communicate with it’s customer, the more options (and pitfalls) it creates. Taking it to the extreme, I’ve even heard arguments for customers first, strategy later.

Ok, this is all getting a little dramatic, so I’ll get to the ask…

Acknowledging that predicting the future is futile, but understanding that it’s important to understand what could be next, what do you think is the future of strategy?

6 comments

  1. I’m no Ryan (or Colin) but I’ll weigh in on this “Hey”-

    The future of strategy (in my humble opinion) should be the incorporation of incentives into all areas of business process. Discussion of incentives has historically been confined to issues of organizational design but their applicability is actually much greater. For example, as more and more companies become more and more convinced that customer centric business models are imperative to success, understanding your customers’ incentive structures will go a long way to determine what products and services they need as well as design ways in which you interact with them. Under this strategic framework (I’m sorry to use those words together), a crucial question will become, “What do my customers stand to gain from me?” rather than the other way around.

  2. Troy,

    Thanks for adding to the conversation…it’s sort of nice to know it’s more than Ryan and I bantering back & forth out here on the internets.

    I like how you re-framed the value proposition around customers. Your point about incentives is interesting. I always get leary of companies creating clever incentive structures because I’ve seen it detract from the holistic mindset that’s usually at the heart of great customer service. That said, redesigning incentives and other motivators can be a pretty inspirational design challenge -with a new view on things there might be something there we’ve missed up to this point.

    Dan Pink has a great TED talk (and forthcoming book) that tackles incentives and motivations. Definitely check it out – http://www.ted.com/talks/lang/eng/dan_pink_on_motivation.html

    (sorry it took so long to reply, been traveling).

    C

  3. Thanks, Colin; happy to have the opportunity to contribute.

    Perhaps the redesign should begin with a real shift from value proposition to actual value creation? The difference has the potential to be far more than semantic.

  4. Great question. And a timely one given the recent death of corporate strategy rock star CK Prahalad.

    You mentioned quite a few technology changes over the 30 years–all impacting how companies plan. If I had to guess, the future would be about faster cycles and more agile planning. 10 years and 5 year plans don’t make sense with our product cycles are approaching limits unseen in the past century.

  5. Hey Matt,

    I think you’re right on. Eric Ries who blogs at http://www.startuplessonslearned.com talks a lot about this. He had a retweet on Twitter today.

    “If my iteration cycle is 1 week, yours is 3 weeks, I can be pretty stupid and still beat the crap out of you”

    I think that’s exactly the sort of stuff you’re talking about.

  6. Colin – love your strategy conversation.

    I was talking with a collaborator today about the role of strategy in knowledge intensive industries.

    We concluded that strategy is a conversation, a sharing of visions, perspectives and context. Its a lot of stuff.

    Because its so broad and disparate the future must be about how leaders really engage with those who need to make execution decisions

    One thing we are convinced that strategy needs to be is both VISUAL and evolved collaboratively / quickly. He has been making maps of strategy for the past 15 years.[see examples at http://www.inter-action.com.au ]

    They are visual, get the point across fast and unlock the latent discretionary energy available to really execute. His clients use them to both create the strategy, stress test it with customers, employees and other interested groups and engage all input to further refine the context, concept and eventual content of the strategy.

    Because the cycle times are diminishing so quickly, really getting the strategy is a basic business process. our chat today was about how to make this highly scalable, super fast and easily accessible to all – not just a premium service.

    Cheers
    Mark

    ps About 10 years ago, I met a guy on a production line in a Mars factory in Veghel the netherlands, who could explain to me how his job reduced the working capital of the company and helped finance their expansion into Eastern Europe – that’s strategy execution and releasing discretionary energy!

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