Livingston James Group Founder and CEO Jamie Livingston discusses why leading through turbulent times requires a new approach to creating strategies to ensure business success.
“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic”
Peter F. Drucker
As I’ve said before, it’s hard to disagree with Drucker’s point although it might have been helpful if he had given an indication of what we should do along with what we shouldn’t!
Since Livingston James’ inception over 12 years ago, we have been fortunate to support C-Suite appointments with some of Scotland’s most influential organisations, ranging from PE backed start-ups through to large government agencies and PLCs. One area that has been evolving at pace over recent years is how to evaluate a leader’s ability in the area of strategy-making.
Traditionally leaders attempted to forecast how markets would evolve and how competitors would respond. Then a multiyear plan for winning in that future state would be defined and implemented. Teams would be built around this plan and then performance routinely monitored to keep everyone on track. This approach was highly successful when markets were more stable, and the primary influencing factors were easier to forecast.
Assessing a leader’s ability to create and deliver strategy in this way was relatively straightforward and in hindsight (whisper it) leadership was perhaps an easier gig then than it is now!
In fact, in these increasingly turbulent times, that old approach to strategy is far more likely to sink the ship than lead to success.
How Should Leaders Approach Strategy-Making for the Current Day?
There is, of course, no silver bullet solution as every sector, organisation, and situation is different. One constant does seem to be emerging and that is the need for strategy-making to be a process of continuous improvement rather than a once every 3-5 year (or even annual) event.
In his book, Reinventing Organisations, Frederic Laloux proposes a purpose led, self-managing approach that results in a more natural and evolutionary approach to business. He describes the approach as akin to the constant micro adjustments required to ride a bike.
The idea being that once there is a general sense of direction the rider needs to get on with real time micro-corrections to get where they are going. There’s no time for a board meeting to decide if we need to slightly adjust as we head downhill towards a pothole!
Another interesting model is proposed by Michael Mankins and Mark Gottfredson of Bain in a recent HBR article where they recommend five steps to help create more flexible strategies and more agile strategy-making.
- Define Extreme but Plausible Scenarios
- Identify Strategic Hedges and Options
- Run Experiments Before Locking in Investment
- Identify Trigger Points, Signposts, and Metrics
- Provide Prescriptive Surveillance
These are just two of numerous emerging models of how to lead and create strategy in these ever-turbulent times. The critical thing is to make sure our leaders are equipped with the skills required for this brave new world, and that that all stakeholders resist the temptation to utilise yesterday’s logic in assessing their potential to do so.
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