June 5, 2017

Strategy Remastered: Time to abandon KISS, SWOT, Three Horizons and more: The future has arrived

Every time I work with a leadership team to assess the future of a ‘world beating’ innovation I have noticed one thing about the cognitive process; that is, it is draining to the point of discomfort. And yet, we know that no amount of SWOT analysis, attempts to keep it simple or resort to an analysis of variable time horizons will help.  They are simply too high level to provide any real insight. Oddly enough, optimism, guesses and gut feel are permissible, but not in isolation, nor must they be allowed to remain assumptions forever.

To illustrate the point, imagine Q Bus Company’s approach to the evaluation of the potential arrival of autonomous motorised vehicles, that is, self-driving electric buses. I recently did ask the CEO (let’s call him John) of AutoTrans, a regional bus company, what he thought the impact of this new technology would have on his business. John’s response was assertive, confident and definitive: “Buses are far too hard to negotiate around city streets without drivers, their use in our city roads will never happen”. Case closed.

This of course would be good news for Amanda Dreyfous, newly appointed strategy and business development officer at Q Bus who had been eying expansion into AutoTrans territory when their main supply contract was due to expire next year. Recognising a one time, albeit short term competitive advantage, Amanda had taken the opposite view to John. Rather than ignore it, she distributed an evaluation paper on the application of the new technology to the Q Bus leadership team and set a time to take them through her ideas. She was excited, her expectations were high. As with many things that are strategic in nature however, the evaluation program didn’t go as planned. Rather than shared enthusiasm, Amanda was lambasted with doubt and resistance – even before the meeting had been convened.

The Chief Financial Officer was concerned that the budget could not carry any added cost or new capital expenditure. The Operations executive (a friend of John’s, they both grew up in the region where John operated AutoTrans) was concerned about the practicality of manoeuvring buses in confined spaces, not to mention the supposedly additional servicing that electric vehicles require. The Human Resource executive was sceptical and mostly concerned with the impact on health and safety, dealing with redundancies and frankly, the future of his own job. On the other hand, the CEO was supportive and in reality, very enthusiastic. Although the Sales and Marketing leader exhibited similar enthusiasm, he confided to Amanda that there could be some negatives associated with perceptions of public safety, given no one had seen this technology in action; especially on their streets.

What should Amanda do to convince them? Even she had started to doubt the idea.

It is at this point that the Amanda’s of the world move on to another discipline, and the leadership teams cry mea culpa “this is not for us, we are just a simple bus company”. With the enormity of new technology and innovative entrepreneurship that is now emerging everyday it is no longer appropriate to maintain that attitude, unless of course you wish to become a victim of the inevitability of decline. Nor are the doctrines of Keep It Simple Stupid, Strengths and Weakness analysis and even the development of a time delimited Strategic Plan (to be rolled out over three neat dimensions of time). The reality is that we need more Amanda’s not less and they need to be listened to and treated with respect. It is OK to communicate strategy in a simple, understandable way. It is not OK to develop or implement strategy that way. By definition those attracted to strategy as a profession are always focused on the future, it is in their genes. When they present new ideas, they don’t mean that all current operations will stop, they do mean that these new ways of doing things must be planned for now – with a sense of urgency, but no necessarily immediately. To get to those ideas colleagues must be prepared to engage in the painful activity of frontal cortex/complex thinking. In some cases, KISS, SWOT and other tools are useful, but in general, are less effective on an increasingly diminishing basis. Nor is it necessary for all executives to understand strategy evaluation techniques such as Blue Ocean Strategy, Scenario Planning, Portfolio Analysis and yes, Three Horizons analysis (in the right context). It is now essential that someone in the organisation does as the CEO and Amanda did, but life can be very difficult for them.

smiknowledge provides E Learning courses for the Amanda’s of the world, as well as emerging CEO’s and existing CEO’s. That is, those people who need to understand the complexity of strategic thought and practice. Full details of our coursework are available at https://www.smiknowledge.com/strategy-courses/.