Strategising for the short and long term

This is the second of five posts on the META (Mobilise, Execute, and Transform with Agility) framework detailed in our book, Accelerating Performance.

The business environment is constantly changing. Nearly every day something in the market shifts, a competitor develops an unexpected product, a policy change affects how you can do business, and you’re blindsided.

Indeed, in a survey of 1,200 leaders conducted by faculty at Wharton Executive Education, 60% of respondents said that their organisation had been repeatedly blindsided by high-impact events. And an incredible 97% said that their organisation lacked an adequate early warning system.

Like all the drag and drive factors contributing to a team’s performance, strategy requires a good amount of foresight. But foresight alone isn’t enough. An accelerated strategy involves a number of practises, including fostering adaptability, developing back-up plans, and keeping an eye on both the short- and long-term trajectory of the organisation.

To make sure you’re promoting the right behaviours and practising an accelerated strategy, you should think in terms of the four areas of META.

Mobilise: Capitalise on uncertainty

Uncertainty is a given in business. An accelerated strategy embraces and mobilises that uncertainty, helping leaders achieve clarity and alignment on the most important forces shaping the future and helping pinpoint where some of the most profitable opportunities actually exist.

Nathan Rothschild, a prominent member of the second generation of the illustrious banking family, is reputed to have said, “Great fortunes are made when the cannonballs are falling in the harbor, not when the violins are playing in the ballroom.” An accelerated strategy recognises the opportunities in the inevitable uncertainty—opportunities that lie ahead, yet unforeseen. To capitalise on these uncertainties, dedicate time to play with assumptions about the future of the business to see how they might be able to develop into opportunities. And adopt tools such as influence diagrams, real-options analysis, and system dynamics modelling to embrace and capitalise on ambiguity.

While uncertainty can be intimidating, it is actually a friend to an accelerated strategy, as it can encourage you to spot openings and keep you from getting bogged down with too much information.

Execute: Prepare multiple strategies

A global survey of senior executives by PwC found that more than half of respondents did not believe their organisation had a winning strategy. In addition, two-thirds believed their company lacked the needed capabilities to realise its strategy. To accelerate, executives must understand the capabilities their company needs to achieve its strategy, which of those capabilities the company already has, and which it must develop.

One of the most important parts of a good strategy is, surprisingly, having multiple strategies. That’s because, often, market conditions change, new threats arise, opportunities emerge, and competitors pursue unexpected avenues. Work to understand your competitors’ possible reactions, and build your own approach around this thinking. Role-playing, for example, can help you imagine the competition’s strategic intentions and thus build multiple strategies to address them.

While most organisations make plans as if the world were predictable, you want to be among those that recognise the value in adaptability and thus are ready to act quickly when the environment changes.

Transform: Split resources between short- and long-term initiatives

Accelerated strategies focus on pursuing long-term ambitions without sacrificing performance in the short term. Strategic transformation requires organisations to plant the seeds of growth while maintaining their core business.

It’s easy, for example, to get sidetracked by near-term initiatives with a clear return on investment, as a leading global chemicals manufacturer did. It was losing its edge in long-term innovation because its resources were primarily going to short-term initiatives. So executives developed a system to combat this trend. They allocated investments into three categories: core (short term/low risk), new (medium term/medium risk), and experimental (long term/high risk). Since each category is based on its own time horizon and risk level, the executives ensured that short-term focus wouldn’t crowd out longer-term investment.

With a strategic eye on both the short and long term, you will also be better able to let go of failing strategies. Everyone knows the dictum to fail fast, but few have the wherewithal to exercise this discipline. By investing in initiatives of diverse risk levels, you’re more likely to know when to pull the plug on a flagging effort.

Agility: Look ahead and adapt

Some projects will inevitably fail. The best companies learn not only to fail fast but also to anticipate, recover from, and learn from setbacks.

Adaptability and foresight are vital to developing an accelerated strategy. In our assessment of nearly 25,000 executives in more than 175 countries on the “six key elements of strategic thinking,” we found that predicting competitors’ potential moves and likely reactions to new products or initiatives ranks as the least-developed skill among the most important strategic behaviours. Being able to foresee such moves is obviously central to an accelerated strategy.

But it is not enough to merely work to anticipate shifts in the industry. You must know what to do with that information, adjusting your strategies and processes, even if they have been successful in the past, to ensure continued performance in the future. A famous scholar once wrote of Darwin’s The Origin of Species, “It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.”

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An accelerated strategy relies on the ability to look to the future and prepare for it in every way possible: by brainstorming diverse strategies for different situations, being ready to adapt as information and trends change, anticipating competitors’ moves, embracing uncertainty, and planning for both the short and long term. Only then can your organisation be prepared for an ever-changing world.

In future posts, I will discuss how organisations should embrace a handful of differentiating actions, how teams are the engines of organisations, and how leaders can themselves accelerate to better serve their teammates and organisation.

To learn more about how organisations, teams, and leaders can outpace competitors, explore Accelerating Performance or consider taking our brief self-assessment.