An American couple are on a touring holiday in rural Ireland. One day they are lost and decide to stop and ask a farmer leaning on a gate for directions. He is old, smoking a pipe, trousers held-up with string. “Excuse me”, says the American man, “can you tell me the way to Cork?” The farmer draws slowly on his unlit pipe, in no hurry to answer. After a long and heavy silence he finally answers – “If I was you, I wouldn’t be starting out from here.”
This is a joke I love and is very relevant to Strategy formulation. It may seem counter-intuitive but the current state of the business is a probably THE worst possible place to start when crafting strategy, which by definition is meant to be a guide to help navigate an uncertain future.
If we start from a focus on where we are, it is very likely that we will consciously and unconsciously limit and filter our vision of the future to conform to our current reality, seeing only those possibilities within our immediate reach and relegating everything else to lala land.
This is not an error but a well-developed bias that works well in a stable world but one that is a constraint in a world of rapid change and uncertainty. We can’t eliminate this bias but need to compensate for it in Strategy exercises to ensure it doesn’t hold us back (individually and collectively) from seeing, exploring and grasping a future possibly very different from what we know today. If we don’t our vision and strategies can be myopic, self-serving and fail as a guide to strategic decision making.
Rather than re frame the current reality for what it is – a temporary and unsustainable step on a journey to an ever changing and uncertain destination – they re-enforce and extend the current reality, often beyond its shelf-life. We need to flip the process and ‘start with the end in mind’. This is not easy but not as challenging as it may at first sound.
Strategy is meant to be a decision-making guide but without a collective Future Vision no strategy can be compete, or useful. So how best to ensure that your strategy exercise starts with a Future Vision that objectively reveals opportunities and threats, rather than simply (and falsely) extrapolates current realities? Here are 5 practical steps based on our experience:
Be clear why you are conducting the strategy exercise – what are the drivers, why now, what’s different?,
Set an ‘horizon’ time frame – this is unlikely to be less than 3 years but could be 5 but the longer it is the more important that it is phased to ensure short-term focus,
Invest in a top-down ‘Mega to Micro Trends’ Framework & research – this defines the Macro Economic, Customer, Social, Technological & other emerging trends that are individually & collectively driving change and creating opportunities,
Demand your leadership & senior staff become familiar with this Macro to Micro Framework and generate original insights – typically this is via dedicated x-functional workshops to develop collective insights, un-learn what is no longer relevant and agree what needs to be done differently to thrive in the future,
Ensure this process is externally managed & facilitated as a strategic project– to ensure it is relevant, stimulating, engaging and delivers. It’s also important that bias is recognised and minimsed (we have identified over 20 biases in 5 separate domains that frequently occur in strategy exercises!)
If you do these well then you will reduce inertia and the inevitable focus on ‘what is‘ vs ‘what could be‘ inherent in most strategy exercises. Remember that new competitors such as Digital players looking to enter your industry are not encumbered by these, a big advantage.
At Dunphy Associates we don’t have the resources to research our own Trend or Industry research but we are familiar with those on the market. We frequently partner with major providers so we can advise which may be most appropriate for our clients looking to ensure their strategy exercises are successfully led and re-framed for the future, rather than anchored in the past. Each has a different starting point, some are more detailed, complex or dated than others, or more appropriate for different industries or companies. If the wrong framework is chosen or poorly applied, then it can really impact the results. Some of the best known are:
Frost & Sullivan’s Mega Trends – “Fast-Forward to 2025: Global Mega Trends and Implications of the Future World” – 12 transformative global trends that are re-shaping businesses, economies and personal lives
Trendwatching – “What will my customers want next?” Consumer, Social & Brand-focused insights much needed by companies struggling to stay relevant with changing consumers & their demands
Metascan 3 – This foresight study examines how four emerging technologies (digital technologies, biotechnologies, nanotechnologies and neuroscience technologies) could drive disruptive social and economic change over the next 10 to 15 years.
There are many others, each with a unique focus but also a lot of common ground. Selecting the right ones is important but even more so is the ability to lift the insights of the pages and make them tangible and relevant. We will add to this list and summarise some of the strengths & weaknesses of each when time allows. Sign-up to our monthly newsletter below to ensure you don’t miss these updates. By all means get in-touch if you would like to know more.