The COVID-19 pandemic has resulted in an unprecedented crisis which is expected to be worse than that of the 2008 Global Financial Crisis. At same time it has accelerated significantly the digital transformation and has changed dramatically the environment. Fundamental rules and assumption that have governed the marketplace are collapsing one by one.
Competition for example has become more fluid across all industries and the distinction between partners and rivals is blurred. The value proposition is not defined by the industry but by the customers’ changing needs. Moreover, customers are not defined by mass markets or segments but by the dynamic networks they form.
It is obvious that change is happening and is happening fast. This requires immediate and decisive actions by companies not only to protect staff, ensure business continuity and strengthen finance but also to safeguard their future.
The good news is that organizations are not doomed to extinction and have the choice to change. Many though fail in this mainly because of two things:
They lack the courage to make the necessary decisions and move forward, to look beyond the here and now and think about the future.
They define strategy as very rigorous process.
Considering the latter, I have observed that many large and mid-size organizations approach strategy with a very fixed mindset and “scientific eye”. In the mind of many managers strategies are supposed to be a calendar event, driven by numbers that “are analyzed extensively without bias, judgement and opinion. The largest the excel spreadsheet the more confident the organization is in the process. It feels scientific which for many managers is equal to great”. In my opinion this view is outdated.
Photo by Qingbao Meng on Unsplash
In the years to come, competitive advantage will derive more from the exploration and less from the exploitation of the marketplace meaning that companies should focus more on innovation and rule breaking instead of game playing. The “conventional” way of strategic thinking cannot achieve these objectives because it’s too stiff and it perpetuates the status quo. Despite the efforts to make it more creative with “ideation events” and “out of the box” thinking, at times of fluidity, rapid developments and emotional upheaval is inflexible.
Companies and manager today should see strategy primarily as an art. This is because art encapsulates the ability and the creativity that is needed to face the constant change and follow the undergoing transformation. In such an unpredicted environment strategy should be a fuzzy, fluid, more creative and ongoing process that provides the general directions and the aspiration needed and doesn’t lock the organization into a specific course of action. It should be seen primarily as an open forum of creating possibilities and choices.
Having this as a starting point we can then integrate the conventional, more scientific, approach and produce novel strategies in which creative thinking yields possibilities and rigorous analysis tests them.
Leading a company into the fog of the future is huge burden on our shoulders. Companies that will thrive in an unpredictable world are those that will have more options and choices available. Leaderships then is the wisdom to deploy them at the right timing.
Cover Photo by Ahmed Raza Kz on Unsplash
Recommended reading:
Bringing Science to the Art of Strategy
From the HBR Magazine (September 2012)
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