Saturday, November 1, 2014

Strategy on Demand

The "Strategy on Demand" is not static, can well adapt to the "VUCA" digital normality. 

A strategy is to diagnose the problems, set a couple of choices and take actions to reach the destination. A person or company can have a whole range of options in strategies, and there are OK strategies and WOW strategies. Now we are in the inflection point to radical digital, the static strategy is no longer effective to adapt to the changes, the agile strategy, or others call the "strategy on demand" is the trend for crafting a digital strategy which can adapt to the VUCA characteristics of digital more effectively.

Velocity: Businesses become more volatile, the objective of strategy on demand is to put a stake-in-the-ground for the sake of operational planning. This is recognizing that corporate planning machine will not stand still awaiting a "WOW" strategy. But that's not where it stops. It is about taking the time in the coming months to collect deeper market insights, to build a thorough understanding of the internal situation, and to build on the stake-in-the-ground strategy that was developed during the "strategy on demand" process. Ideally, this process will deliver a creative, WOW strategy.

Uncertainty: Uncertainty is another digital normal, when there are a couple of big "it depends on..." issues, groups or businesses benefit a lot from a strategic scenario mapping exercise that clarifies the different futures they might be facing. You can then facilitate a discussion about what it will take to win in each future, or perhaps even how to shape the desired future if there are ways to influence it. When people think they have a clear strategy, setting up strategy game exercise with teams of 2 or 3 taking the position of the company, a key competitor, customer segments, etc. to create ideas and issues from each unique perspective. This stress test can reveal some chinks in the armor or it may reveal a hidden opportunity.

Complexity:  Digital businesses are over-complex, it is not easy to make a good strategy, not mention to crate into a breakthrough strategy; to get to this level of strategy, one would require more external inputs in terms of market Intelligence, explorer's spirit, creative thinking, and collaboration. Hence, prior to the start of the strategizing process, the people need to be in the right frame of mind, anticipating a journey of discovery, strategy on demand means the seamless collaboration and continuous improvement. A couple of exercises could be added to check biases and explore alternative futures without overcomplicating things. 

Ambiguity: For organizations with a robust business and lots of initiatives, there is likely a lot of ambiguity as well. The strategy on demand approach will help clarify a focus for alignment and provide criteria for tradeoffs when there are resource constraints. The value of clarifying ambiguity is worth the effort. Hence, if a company has real potential one should invest extra effort to get it on the right track of super highway. More or less it is about realizing the full potential of the organization, with possible redirection, rather than just establishing a strategic framework for the sake of operational planning.

Strategic planning and Strategic budget go hand in hand: Strategy on Demand depends on whether the organization is committed to following the so-called Strategic Budget which is committed to the strategy. if you consider that a strategy is a move that a company intentionally decides to make, from point A to point B, expecting a certain impact when reaching point B and that it takes financial and human resources to make this move, then budget planning is an integral part of the strategic planning process. Planning a strategy without its budget, or revising a budget without considering the impact on the strategy is like throwing an apple in the air expecting that it will fly to the moon... so whether this is done annually or not, they go hand-in-hand. The Annual Budget is considered a double-edged tool for the strategic plan. The role of the Budget is to implement and in the same time to supervise the plan not to exceed its items. Otherwise, there will be some deficit somewhere.

It is very crucial to have a clear vision and strategy, but again, there are many routes that can be taken. A strategic plan is just a mean to an end - survive or grow in today's turbulent economy, you need do it with agility and adaptability.


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