If your environment doesn’t change much and the way you do business today is fundamentally the way you will be doing business in the next 5 – 10 years – DO NOT READ THIS!
In a recent blog post, I declared Strategic Planning was obsolete. The current approach to defining where an organization is going and how it will get there – the ubiquitous Strategic Planning Offsite meeting – can no longer produce the desired result. Why? In our dynamically changing world, the environment where we execute is not the same one we originally planned for.
However, the underlying objectives of the Strategy Planning process still remain as important today as ever. It is still critical to establish and communicate the strategic direction of the firm. And it is even more critical to align all the elements of the living corporate body to perform in ways that ensure the organization achieves its desired results.
Since the key objectives of setting strategic direction and organization alignment towards those goals remain critical, the process by which these objectives are achieved needs to change. To better understand why this is, let’s continue to explore the analogy of the corporate body operating in a similar fashion to the human body.
We know that over 90% of our behavioural responses to our environment occurs semi-autonomously. The nervous system determines the body’s response to thousands upon thousands of simultaneous inputs received from our environment. The brain (our body’s central decision processing function) has little say in how our body responds most of the time. And this is a good thing. Imagine what life would be like if all decisions had to first go to our brains for a decision before any action would occur. There are thousands, perhaps millions of choices being made between the many functional parts of our bodies in one of the most coordinated and collaborative team efforts one can imagine.
Think about what happens when you drive. When driving on the freeway at 65 mph, how much of your conscious thought is actually focused on driving? What percentage of your brain is coordinating your foot that is pressing on the pedal, with your arm that is controlling the steering wheel, while taking in the data from your eyes as they scan the environment around you? It is quite amazing to realize that we get to our destination while our conscious thoughts are focused on everything but our driving.
Wouldn’t it be nice if our organizations can get us to our destination with the same degree of semi-autonomous behaviour; where the corporate body could respond to the rapidly changing environment with the speed and accuracy of decisions that ensure our ultimate success, much as the human body gets us to our destination? Like our human bodies, corporate bodies are driven by their own version of the semi-autonomous nervous system. Directors and managers comprise the corporate nervous system that guides the day-to-day decisions made by the hundreds or thousands of people (the corporate body’s cells) as they respond to the myriad of data inputs coming from the corporation’s operating environment.
With this metaphor in mind, let’s return to the challenge of strategy execution and the role of setting the strategic direction and aligning the forces within the organization to the desired results.
In the traditional approach to strategic planning, the CEO and executive team participate in an offsite planning session, where they evaluate strengths, weaknesses, opportunities and threats, (the classic SWOT analysis), set the future direction for the organization, and map out specific action plans to achieve the desired results. They then go back and communicate these well-thought-out plans to the rest of the organization with “marching orders” as to what the various functional departments will each carry out. So long as the environment remains pretty much as they understood it, this approach was likely to produce the desired results.
But herein lies the failing; the environment now changes at a rate faster than the planning horizon. Said simply, the marketplace dynamics will have changed significantly before the organization has a chance to realize its planned results.
The current execution model relies too much on the executive team (the brain of the corporate body), being involved in the decision making. Starting with the planning process and carrying over into the myriad day-to-day decisions, the executive team is the dominant decision makers. When the environment moved slower this was acceptable, but at today’s rate of change, this no longer works. It is analogous to the brain guiding every movement while driving a car. The driver would slow down to the same speed as that of a student driver trying to get everything coordinated.
The problem lies in the nature of decision making: every decision is made within a specific context. This context holds the core reason for why we are here and what we are trying to do and holds the core values against which we evaluate various alternative actions. It also contains the framework which allows us to organize and make sense of the thousands of data inputs we collect.
In the current approach to strategic planning and execution, the Context of the organization resides with the Executive Team and little, if anything, is ever done to infuse this core Context throughout the organization. Instead, what is usually communicated is only the “what and the how” of the plan, not the “where and why.”
Without the Context of Soulful Purpose, Values, and Desired Future and a framework for sorting and evaluating input, the corporate body will never be able to execute without continuous involvement from the executive. Going back to our driving example, one could say that most organizations today operate like student drivers who are thinking about every move they make.
To operate at the speed of today’s business environment, organizations must have the corporate body operate in a semi-autonomous fashion, much like the human body. This requires a different approach to strategic planning, with most planning focusing on establishing a strong Context; a Context which is not merely communicated but is infused throughout the corporate nervous system. Additionally, a decision-making process must be established that allows individuals (the cells of the corporate body) to quickly respond to the environment in a manner consistent with the Strategic Context.
To learn more about Context, the human body analogy to today’s corporation and The Living Organization® model please click here to download a free white paper.