Does your organization have a traditional five-year strategy? Or a three-year strategy? Do you develop a work plan for your strategy? Do you “work the plan”? Do you then tick off each item as you complete it? Do your employees rarely refer to your strategy on a day-to-day basis? Then you likely have what I call a passive strategy.
The purpose of strategy is to align your organization’s external environment with its resources and organizational preferences. The external environment, with its political, economic, social and technological forces as well as the competitive environment, isn’t controllable by any one organization. It changes rapidly. It is VUCA – volatile, uncertain, complex and ambiguous. So each organization has to forecast where they expect the environment to be over the next few years. These are educated projections which have a relatively high likelihood of being wrong. But if we don’t project the environment forward, we can’t be prepared to deal with the issues that are coming. Often organizations feel that they can’t predict the future, so they end up with status quo, “business as usual” plans, that leave them unprepared.
Strategy is necessary to ensure an organization’s continued viability, performance and relevance. Once an organization has determined their view of the likely future, it’s critical to align the organization’s preferences to the future. This means a hard look at vision and mission to ensure that they are still relevant. This can be a difficult discussion, especially if changes are needed, as often the vision and mission are strongly embedded in the organization’s culture. Finally, in order to effectively deliver against the proposed strategy, the organization needs to assess its resources – people, core competencies, assets, money – to determine what assets are needed to achieve this future strategy.
The problem with a passive strategy is that it assumes that the environment does not change during the period of the strategy. Unfortunately, the world does not conveniently stand still around an organization. Thus we come to the concept of agile strategy. This isn’t a new idea – Henry Mintzberg coined the term emergent strategy over 20 years ago. Active strategy doesn’t only “work the plan”, it also asks the question “how does the plan work for you?”
Much like the lean launch strategy in entrepreneurship, and the agile development process in technology, active strategy evolves over time, based on learning and shifts in the external environment. The reality is that in our VUCA world, we can’t possibly predict what will happen in five years, but we can evolve and respond as we see shifts in the environment or learn something new. Using a strategy as a framework, but adjusting as we move, always keeping in mind the vision and mission of the organization.
The reality is that agile strategy is messier than a nice neat tidy “three-year strategic plan” that you pull out to show boards, investors or donors. It’s also much more challenging to manage, to ensure alignment to the vision and to make sure that everyone in the organization understands it, because it shifts over time. There is a risk that you end up with no strategy, since everyone in the organization can be all over the place. The fact is that strategy can’t be an activity done in spurts and starts, but needs to be an ongoing process. Good strategies evolve over time as we learn, not once every three years.