By Lars Linnekogel, Managing Director of TTE Strategy
The corona crisis has undermined companies’ current planning and strategies. It is in times like these, as markets are radically changing, when tried-and-tested procedures reach their limits. So, how can companies plan within this new uncertainty? By rethinking their strategy development, says Lars Linnekogel, Founder and Managing Director of TTE Strategy. These are the five premises that will shape strategy development during and after corona.
1) The end of process optimization: Why the big picture will be more relevant again
Processes define the world of companies. The more efficient a process, the lower the costs and the higher the added value. Hence over the last decade companies tended to focus pretty much on process optimization – calling them ‘strategies’. These strategies were often more or less a line-up of many operative projects. But where the market is not working anymore, or has disappeared completely, ongoing process optimization will not be enough to keep up competitiveness. The questions need to become more holistic and fundamental again: Which contribution can the company make to solve its customers’ (new) problems? What vision is needed to remain a relevant market-player in two, five or ten years? Which global goals need to be defined? Which frameworks does top management have to create in order to empower employees to achieve these goals?
2) Directing, not commanding: Strategies will be developed at the heart of the company, not in an ivory tower
If management has developed a strategy in the past years, then not only has a vision, goals and a framework frequently been the result – solutions, too, have been provided frequently. The job of downstream hierarchy levels within the company then basically consisted of implementing these given solutions. This was problematic even then; after all, the measures drawn up, with the best intentions, were often much more difficult to implement in reality than the boardroom had once planned. This is because top management did not have knowledge of the details to develop truly goal-centric solutions that worked. Due to ever-increasing complexity and the rapid speed of change, a small committee alone in the ivory tower will hardly be able to give the answers in the future that a company needs to effectively navigate through a new, uncertain world. Strategy development will therefore integrate all the relevant know-how providers within a company across all hierarchical levels, and beyond, in the future. Top management will develop the right ideas themselves less and less. Instead, its task will be the orchestration of the interaction between all various players within the strategy development.
3) Multidisciplinary teams deliver input: Borders between external and internal staff will become blurred
Strategy development has been the holiest task to date, reserved for the top (business) management and a few select consultants. But in addition to the integration of all the hierarchical levels, the development of company strategies must take place on an interdisciplinary level in the future, too. After all, without technology and digital experts, innovation and market research, cybersecurity and blockchain specialists, global risk analysists and political insiders, and even physicians for hygiene measures, this development would hardly be possible in the future. That companies cannot free up all these resources internally (in the respective quality) is a matter of course. This is why the integration of external supporters will continue to grow and the borders between internal and external employees will increasingly become blurred.
4) “No experiments” is out: What does not work will be corrected
The best-by date of strategies and partial strategies is continually becoming shorter. What is in today can already be out tomorrow. Therefore, strategy planning processes can no longer take several months to be completed and then considered a done deal. Rather, new conditions have to be quickly internalized, and then leveraged to describe the resulting challenges, to sketch solutions and test them, to buy time – to adapt and readapt and adapt again. This requires and adaptive way of thinking and acting, and a huge openness towards experimental working. Top management is faced with the challenge of anchoring such actions within the company.
5) “Values” are not just PR anymore: They form the foundation of all strategic ideas
In times when business models can be obsolete from one day to the next, there are fewer and fewer opportunities for guaranteeing the identity of companies and the employees who work there. For instance, if your (corporate) identity arises from the idea that you build the highest quality cars in the world: what does it do to you if people stop buying it anyway? You are immediately faced with an identity crisis. The anchor, however, are the basic values (and competencies) on which the company is based. This covers, above all, the “how” of working, which can frequently lead to a new “what”. From car manufacturer to mobility provider, from packaging producer to vendor of hygienic logistics solutions, etc. Especially in these times of today, companies must review more intensively than ever what this “how” is for them and which values stand behind it. Strategies will have to be built on these in the future if they want to have a chance to be accepted within the company.
This article was initially published on Consulting.de on 19 August 2020. To read the German version, please follow this link: https://www.consulting.de/hintergruen...
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