Are we experiencing an 'epochal shift' in the socio-political context within which business operates. Certainly Brexit surprised; Trump shocked. But are these are just part of a broader pattern of changes happening across developed democratic societies? If this is true, the strategist and the executive need to make sense of these changes.
Our natural instinct is to create a single storyline which 'explains' these events. Our instinct is not to create multiple storylines. Nor do we naturally thread together multiple themes. And yet sober reflection tells us this is an inadequate response.
Scenarios are the 'tool of choice' for these uncertain futures. But we need avoid the notion that scenarios are just about building a 2x2 scenario matrix. Done properly they should impact at a much deeper level.
We are conducting a short scenario exercise in Perth CBD on Friday 31 March where participants will have the opportunity to explore an array of plausible futures given these changing political trendlines.
DDB ... a strategist's view
Read MoreIs the world more turbulent than it used to be? Not everyone agrees, but in the post war years the economic context was largely stable and expansionary. Long range planning was at the heart of strategy. Today, VUCA, a military construct, is increasingly being used to describe the changing business landscape. What exactly is VUCA? How does it translate to the business world?
And more importantly, how can business respond to this VUCA world? Nicholas Taleb, the man who introduced us to the notion of black swan events, suggests we need to develop 'anti-fragility'. Interesting turn of phrase, but not much practical help. I offer a few practical suggestions that will help you navigate these VUCA times.
Read MoreIt's happened. The digital economy is now top of the leader board in corporate America. Late last year the top 5 firms by market cap were all 'digital' specialists. Can you guess who?
And what are we to make of this? Do these firms actually make serious money? Are there lessons for 'old economy' firms.
If you don't know what a platform business model is, you need to read this. If you're obsessing over your competitors rather than your customers you need to read this. And if you are struggling to build an innovation culture you need to read this.
This is the first of a series of posts on lessons from the digital giants.
DDB ... a strategist's view
Read More2016 was my second year of serious blogging. In the last year I wrote 23 blogs and LinkedIn posts. My focus reflects my roots: the strategy process, strategy execution, and leadership. Based on reader responses, the three most popular posts this last 12 months were my post on the post Brexit/post Trump world; the strategy-execution gap; and an executive's plea for help in strategy execution.
I finish with some observations around possible blogs for the new year.
DDB ... a strategist's view
Read MoreTwenty years ago Dianne Vaughan, writing on the Space Shuttle Challenger disaster, coined the term ‘normalisation of deviance’. This was an underlying contributor to the Space Shuttle disaster.
The ACCC v. Woolworths case just finalised in the Federal Court provides us a modern local example of this effect. In his finding for Woolworths, the Federal Court judge found the practice of demanding money from suppliers was ‘consistent with the ordinary nature of retailer and supplier relationships and common practice in grocery retailing’.
How did we arrive at a situation where this sort of behaviour has become common practice? Normalisation of deviance.
Read MoreI am often asked: ‘when should you conduct a major strategic review’? There are various catalysts for a deeper strategic review: a new CEO; serial underperformance; business model disruption; major external shocks. Brexit should have been a catalyst for a process of deeper strategic reflection within most enterprises. Post the Brexit decision if you weren’t running scenarios which contemplate a Trump presidency as part of a broader geopolitical shift you were gambling on a status quo potentially under threat. The next step in that narrative has now unfolded. Post Brexit it was no great stretch to imagine a Trump presidency.
But what does this mean for business? The reality is no-one knows. But in a VUCA world, scenario planning is the best tool to prepare your organisation for what may lay ahead.
Note: this is a slightly longer blog than usual (ca. 5 mins)
Read MoreI've written a lot about strategy execution recently, but it begins with a shared understanding of what strategy actually is. Strategy has four dimensions to it: perspective; position; plan and patterns. You need to understand each of these if you are to overcome the strategy-2-execution challenges.
Next time you are having a conversation about strategy execution, begin with the question: what is strategy? And don’t settle for the simple answers. Growth doesn’t occur without some level of discomfort. Are you willing to sustain the discomfort necessary for this conversation?
Read MoreThe first step to solving a problem is to recognise you have one. Netflix CEO Reed Hastings recognises his biggest challenges now are execution. Do you have an execution challenge?
But before you can execute, can you summarise your strategy in 35 words or less? Would your colleagues put it the same way? And would they recognise the same top five priorities? Check out what the research tells us.
On execution, too many organisations are serial under-performers. What specific action steps will take your organisation's strategy execution to the next level. We have developed an Execution Playbook to help clients tackle the challenge of execution.
Read MoreMy previous blog on execution provoked this lament from one reader:
“See, this is what shits me. We don't want to take the time to actually consider the execution piece of our 'strategy'. Once we have something that looks pretty on paper we then go back to bidding work willy nilly and trying to operationally improve our projects on an individual basis.”
I had written about the socio-cultural elements that could bring much greater success to your strategy execution efforts. But this only works if you have the fundamentals in place. Unfortunately organisations often experience an 'air gap' between strategy and execution.
This blog highlights the gap between the 'what' and the 'how' of strategy execution. Mintzberg's mantra of 'codify; elaborate; convert' offers a sound process to close this gap.
You can't solve a problem you haven't defined. Do you have a strategy-execution air gap?
Read MoreAt a recent workshop a client expressed the fear that she felt stuck when thinking about strategy execution. That's not surprising. Research consistently shows that organisations massively under-perform on strategy execution.
I outline five practices here that will give you a winning edge when it comes to strategy execution. Execution is not a trivial part of managerial work: it defines the essence of that work.
Read MoreThe headlines scream at you: major miners blew the boom. It is true they repeated the patterns of all commodity booms. But are we guilty of playing Monday morning quarterback? What might they have done differently?
And what about shareholder value? When did we lose sight of the value part of the equation? And who was the greater fool?
Read MoreTechnology should be an integral part of any productivity strategy. But why do some organisations struggle to develop effective technology strategies? This was a question we put to the leadership team we were working with on a technology strategy some years ago. They identified 6 distinct barriers:
- Lack of aspiration … there was no clear ambition
- Lack of a technology strategy … resulted in a random approach to technology
- Lack of awareness … little knowledge of the external possibilities
- Risk aversion … doing nothing seemed less risky than doing something
- Lack of capability … lack of structures to effectively engage in the strategy
- Lack of execution … folklore around poor technology implementation (over budget/over time/under delivered)
How does your technology strategy stack up?
Read MoreAbout 15 years ago a major Australian resources company set out to develop ‘world class leadership’. But Professor Chris Worley rebuts[i] the usual prescription of ‘more leadership’. He argues that asking people to change behaviours without changing the underlying system – the structure, systems and processes – is borderline immoral.
Leadership requires us to develop new behaviours and create a context in which those behaviours can flourish. My research explored the barriers organisational context creates in the pursuit of 'world class leadership'. These prove to be at least as important as individual factors. But what are the conditions we need to create to enable leadership?
Read MoreBusiness leaders often lament the lack of political leadership and community support. It’s only going to get harder. WA Premier Colin Barnett, at LNG 18 – the premier global conference of the LNG industry – offered some advice to the industry: you guys have to do more of the heavy lifting. It is no longer viable, if it ever was, for industry to expect the politicians to take the lead in the public battles.
And yet the list of examples of decisions which make it nearly impossible for business to win public support continues to grow. These various decision failures impact three critical stakeholder groups: the community; the suppliers; and employees. And this has both direct and indirect costs.
Major corporations are not naïve about these issues. But we need to get much smarter at anticipating and addressing these broader stakeholder issues. Often these decisions reflect a progressive, cultural failure compounded by hubris and arrogance. Just because you can doesn’t mean you should.
We need to ‘inoculate ourselves’ from this cultural detritus. I suggest three possible 're-calibration' processes
(4 min read)
Read MoreThe recent death of Andy Grove passed unremarked in the Australian press. Grove has been called the greatest CEO in tech history: he mentored a young Steve Jobs. A former Intel CEO, Grove was responsible for the transformation of Intel from a ‘memory company’ to a ‘microprocessor company’. Few companies have successfully redefined themselves so fundamentally. When Grove stepped down as CEO in 1998 Intel was earning $6.9B profit on $25B revenue.
The story of the transformation remains a classic case study in strategic leadership.
I highlight three key lessons and suggest some practices you build into your personal leadership repertoire.
Read MoreHenry Mintzberg was right when he declared ‘we need better practice, not neater theories’. Three theoretical paradigms provide an overarching framework for strategic thinking. And these were part of the economics discourse more than 50 years ago. But any one of these by themselves is insufficient.
It is the overlay of the insights from these three paradigms that create the case for change and that shape the strategic option space for an organisation. Organisations can improve the quality of their strategic thinking by applying these frameworks with a combination of discipline and creativity.
Read MoreAt their most dangerous presumptions are assumptions that are accepted as a ‘social fact’. This makes them more dangerous than assumptions. Assumptions should be explicitly identified and can be tested. But we remain blind to our own presumptions.
The risk of presumptions is everywhere around us in the age of disruption, but it exists also in other areas. Shell lost control of a major project in Russia; Tata had to move the Nano car plant weeks before commissioning.
Presumptions in both cases turned out to be a very costly.
What can you do to reduce the unanticipated risk of presumptions?
Read MoreAt its core, strategy is design. And great design starts with the question: what if anything was possible. If we start with constraints we get designs for tomorrow that merely tweak today.
What if we applied the same design principle to the strategy process? This would improve the chance of creating something truly distinctive: a ‘breakout strategy’.
In preparing for a leadership conference Starbucks CEO Howard Schulz argued:
Before we could challenge the status quo, my colleagues and I had to see it in new ways, reframe our existing ideas, and move beyond self-imposed constraints to imagine new possibilities.
How bold are you willing to be to achieve something truly distinctive?
Read MoreStrategic renewal is a fact of life, While strategies constantly evolve, organisations experience strategic drift either through organisational entropy (the tendency for systems toward increasing disorder) or market and competitive shifts that are no longer reflected in our strategies. The challenge is to respond to these issues before you reach crisis. Regrettably, organisations often move too late. Why?
There are two explanatory factors: a ‘failure to see’ or a ‘failure to move'. This blog illustrates the power of some of these issues and describes an approach used in a recent workshop to overcome some of these limitations.
This is part 2 of a three part series of blogs looking at some of the issues at different stages of the strategy life cycle. To see the earlier blog click here
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