Enterprise

Using strategy as a catalyst for growth


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Despite being a critical catalyst like the role of leadership, insightful game-changing strategy often remains elusive. PHOTO | SHUTTERSTOCK

“Prediction is very difficult, especially if it’s about the future!” said Niels Bohr, the Nobel laureate in physics and father of the atomic model.

Despite being a critical catalyst like the role of leadership, insightful game-changing strategy often remains elusive. Perhaps how we think strategy is made in theory and how it works in practice are two different things. One more innovative way to approach strategy is to use a bottom-up, series of small ‘start-up-like’ experiments.

Senior managers in East African companies and in the NGO–donor sector will agree that crafting a strategy is one of their key tasks.

Yet, often the ritual of the time-consuming process, often does not pay off with tangible results, yielding few new ideas and risks being plagued by office politics.

Ideally, the strategy-making process would be a blend of solid hypothesis-driven, more analytical diagnosis and a touch of ‘out of the box’ creative thinking, that serves as a catalyst to growth. And, in the case of NGOs and donors, greater impact and effectiveness.

However, the reality is that the ritual produces a long-winded document that gathers dust on the shelf. “There is a lot of dancing, waving of feathers, and beating of drums.

No one is exactly sure why we do it, but there is an almost mystical hope that something good will come out of i,” commented one CEO.

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Digital age reality

In our TikTok, Tesla, Space X, and climate change age, the idea of strategy has changed significantly since the time of Michael Porter’s, ‘there are only three ways to get a competitive advantage’ thinking of 30 years ago.

Creating the distinction ‘strategy’ remains a problem, with many students of ‘strategic management’ with a newly minted MBA confusing it with a ‘to do list’ like operational plan.

“A key starting point is the acceptance of the counter intuitive notion that the strategic-planning process should not be designed to make strategy. Henry Mintzberg, a professor of management at McGill University, calls the phrase ‘strategic planning’ an oxymoron. He argues that real strategies are rarely made in paneled conference rooms but are more likely to be cooked up informally and often in real time—in hallway conversations, casual working groups, or quiet moments of reflection on long airplane flights” notes the McKinsey Quarterly.

Strategy is not a rolling plan done over a few years, with a budget for each of the business units. Ideally, the strategy is a leverage point, a distinctive — hopefully imaginative, sometimes counterintuitive — way of approaching the market, that has a clear tangible impact, and serves as a rallying cry, a call to action.

Given our ever-increasing rate of change, it has to be agile, with the business plans coming out of the overall umbrella strategy reviewed quarterly, perhaps by way of a simple one-page Power BI visual dashboard.

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Why is strategy so difficult to master? Quite simply: it is tricky but doable. In contrast, doing an operational plan is easy. Many donors persist in the idea of doing a five-year operational plan, but the inevitable unpredictable problems and opportunities come up, fast making the time-consuming plan, bordering on irrelevant.

Top-down five-year plans grew popular in the late 1920s with the autocrat, Joseph Stalin, the former premier of the Soviet Union. They did not work then and still don’t, yet the understandable desire to project, to predict, to plan, with certainty into the future remains.

Yes, one can plan to build an [inanimate] office block or a town in the desert, but when it comes to planning with organisations, powered by the [animate] human factor, the inevitable unpredictability comes into the equation.

Not to mention, what engineers call the stochastic variable, the ‘bugger factor’.

Bottom-up experimentation

“Strategic experimentation occurs when a company pursues a variety of strategic options in parallel within a given business… designed to test specific hypotheses about where future opportunities may be found,” wrote Eric Beinhocker and Sarah Kaplan.

More than 130 years ago, Louis Pasteur discovered that microorganisms cause fermentation and disease; and pioneered the use of vaccines. His wise words, apply to the strategy creation process: “Chance favours the prepared mind”.

David is a director at aCatalyst Consulting.

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