Strategic Response Speed - the essential survival metric

Strategic response speed isn’t something most organisations measure, but it is rapidly becoming one of the most important dimensions of organisational effectiveness and performance.

Strategic response speed is how fast your business can respond to external change – first detecting it, then adapting and changing accordingly. It’s a new idea.  Of course, businesses have been developing strategies, and implementing them, for years.  And, managers have been complaining for almost as long about how long it takes to implement change. But seen as an overall organisational response to new threats and opportunities, which needs to be thought of and managed as a whole, it’s a new idea. And, like most new ideas, it needs to be understood before it can be managed.  So, here’s a quick introduction to the idea. 

Strategic response requires mobilisation across most, if not all, of the business model. 

The Business Model

That may seem obvious, but it’s a point worth making, as it brings into focus the range of things that might need to change – some of which aren’t obvious.  As one example, for many businesses, their enabling activities and infrastructure (Finance, HR, physical space, IT, etc.) are barriers to making change happen quickly and often need major rebuilding to support what could seem like fairly minor strategic shifts: witness the struggle of so many organisations to bring in new “digital” skills and talent when their pay and reward arrangements (as well as performance management processes) are better suited for the world of 10 or 15 years ago. 

There are 7 key stages to strategic response, that map roughly to parts of this business model.

Seven Stages of Strategic Response

7 stages of strategic change:

1.      Sense – Detecting opportunities / threats that require a response.

2.     Decide – Evaluating available information and deciding upon a course of action (or none at all).

3.     Develop – Developing the form and manner of response – e.g. new customer offerings, new organisation structure, new processes.

4.     Procure – Obtain resources required to carry out a response – which may require changes in existing supply arrangements and / or the creation of new supply chains.

5.     Enable – Putting in place the supporting activities and infrastructure to allow changes to be made. This could include new HR processes, different finance and transaction processing systems, etc.

6.    Implement – Putting new processes, etc. in place.  

7.     Deliver – Responding externally and interacting with customers.

For a particular strategic response these can happen in a different order, at different times. Change may be emergent from the frontline, organisations may sense a threat or opportunity they might want to respond to, and develop a response, before making a decision to fully commit to enacting the response.  But, regardless of when and how, these fundamental stages will be present – and it’s worth considering them as a whole.

So, with that background, here are the questions to be answered:

  • How long does it take your organisation to respond to emerging threats and opportunities? 
  • Is that time getting longer or shorter, and why?
  • How does that time compare to how fast the world is changing and the speed at which new things are coming at you?
  • What would have to change to be faster, and what could you do if you were quicker?

Getting a precise, fact-based answer to any of those questions would be a major undertaking, and perhaps not worth the effort.  But, getting a general sense of the answers – and more importantly, what you might do about them – is probably a discussion worth having in your organisation. Who knows where it might lead? 

“The future is going to be fabulous – let’s get there quicker”

Organisational purpose is important, but not if it is just a communications exercise.

Organisational purpose isn’t optional anymore. But too many organisations are treating this critical topic as just a communication exercise.  The real value comes from doing the work to put purpose at the heart of an organisation’s strategy.

In a recent FT article it was reported that Larry Fink, the chief executive of BlackRock, the world’s largest asset manager, “has warned companies that they must contribute to society and deliver financial performance or risk losing … support.” It’s easy to be cynical about this, particularly given that BlackRock has previously been criticised for its lack of focus on corporate behaviour beyond financial performance. But, it’s one more sign that the old “maximise shareholder value” model is no longer sufficient.  And, it’s not just investors who are thinking about organisational purpose.  Customers, suppliers, and employees, when they have a choice, are increasingly choosing to buy from, sell to, and work for organisations whose purposes align with their own.

Identifying and articulating an organisation’s purpose can be hard – particularly if the organisation has a long history, is complex, has been focused very narrowly on financial performance for some time, or has a “me too” strategy that’s hardly distinguishable from its competitors.  In cases like these, the original rationale for the organisation, its fundamental purpose, may have become diluted, confused, commoditised, or even irrelevant.  Understandably, even for these organisations, top teams want to have something to say about their purpose; this can quickly become a communications exercise: a hunt for a strap line, an organisational story or narrative, that is inspirational enough, yet believable enough, to sound like a purpose. 

Our experience working with organisations and their top teams leads me to think that rediscovering or reinvigorating an organisation’s purpose happens in a different way.  Much of the value of having an organisational purpose comes from the discussions to identify, articulate, and interpret it; at least as much as from how it’s communicated.  This might seem like an odd thing to say: surely if the purpose isn’t communicated it doesn’t make any difference to what people think, feel, and do – so what’s the point?  But that depends a lot on how you think about “communication”.

When top teams work together to create a shared view of the situation their organisation faces, and then engage in choosing the sort of organisation they want to lead and the sort of people they want to be, they generally end up accomplishing three things. First, they reconnect with the organisation’s purpose – and with their own. Second, they rethink and rearticulate their strategy, in a way that puts purpose at its heart.  Third, they equip themselves, as a team and as individuals, to engage others – particularly their own direct reports – in similar conversations, in a way that brings the purpose alive, while translating it into the actions and behaviours that deliver the strategy.  Of course, this requires a lot of communication – but it happens in a different way and has different results, compared to a more typical corporate communications approach. 

One final thought on purpose.  Based on what I’ve said, you might be tempted to think “so, I just need to wait for my boss to come to me to discuss our purpose”.  Don’t wait. Even if the overall organisation’s purpose isn’t clear (yet), you can start right now by clarifying and articulating the purpose of your team – however big or small that team might be, even if it’s only you.  Isn’t that where leadership starts?

What's the killer stalking your organisation? It isn't disruption.

The first blog post in a new series to accompany our latest research topic of 'Design for Speed'.

Change and disruption are as likely to be opportunities as they are threats.  Which of the two they are depends on how – and most importantly how fast – you respond to them. Help us crowd-source the best ways to respond fast.

Most organisations aren’t designed in a way that supports strategic speed.  Instead, most are designed to optimise the balance between cost and control, with the organisation’s strategic response speed determined by what’s left over. 

However, the big threat to your organisation isn’t that its costs are too high, or that it’s controls aren’t 100%.  The big threat is that the world changes faster than you can respond, so you become increasingly irrelevant (at which point costs do become an issue, and control weaknesses do come to the fore).

Instead of seeking to optimise cost and control, an alternative is to set reasonable constraints on cost and control, and then within them to design your organisation for speed.

Such a major organisational change would only make sense if your ability to respond wasn’t quick enough. Chances are that it isn’t.  Organisational design for strategic speed is a very new area, so most organisations won’t know how fast they are, nor have anyone responsible for it.  Equally, most organisations aren’t moving as fast as they would like, nor as fast as they need to be.  But, there are things you can and should do. 

We first started thinking about this topic a few months ago in response to an inquiry from a potential client who wanted to know how they could change their organisation structure to increase the speed of their change projects.  Naturally, we developed some suggestions for them – but we also researched to see what others are doing about this.

We found very little on the topic, beyond lots on “agility” (which is a related but somewhat more limited concept).  So, we’ve decided to organise an “open source” effort to learn more about “Design for Speed” – and to share what we learn.  Here are the sorts of questions we are looking to answer:

  • Who should be responsible for organisational performance? Who tends to be today – even if  informally?
  • How can we tell if an organisation isn’t responding fast enough? What are the warning signs?
  • How can we usefully measure speed of strategic response? (We have an approach, but we want to see how generally applicable it is.)
  • What do we know already about approaches to increasing organisational speed? Are there “tweaks” that can be made that have a big impact on speed, or is a fundamental rebuilding needed?
  • Is there a reliable process for redesigning an organisation for speed? 

If you are interested in this topic, here are some ways we would love to have you involved:

  1. Join the Linked In group.
  2. Participate in one or more of our “Design for Speed” roundtable discussions to explore this in more depth.
  3. Share what your organisation is doing to improve organisational (strategic) speed – or any of the components of the strategic response cycle.
  4. Point us towards good examples of what others are saying about Design for Speed (or other related topics).
  5. Ask to attend one of our breakfast seminars where we share a bit more about the Design for Speed idea, and you have a chance to discuss it will other business leaders.
  6. Introduce us to the person in your organisation who has responsibility for (or should be interested in) organisational speed.
  7. Let us know you are interested and would like to be part of activities (yet to be defined) in future.

And, please do feel free to share these thoughts and ideas with others you know who might find them of interest.

Until next time!

Meaning or measurement

A recent Wharton article focuses on the topic of how to measure employee performance in a world where output volume is no longer an effective measure. A good topic, but a decade or more out of date. The shift away from “production line” approaches – in manufacturing as well as services – started at least as long ago as the introduction of desktop computers.  They provided a way to bring information together quickly to respond to customer requirements faster, but more importantly more flexibly.  This, along with other changes in business models, created customer expectations around service, speed, and innovation that many businesses are still struggling to fully respond to.

Of course, the professors at Wharton know this.  They describe the problems that can come from a “more output for less input” mentality, and sensible steps that can be taken to move away from that.  But, underlying the various difficulties and solutions they discuss is the question: “what leads some employees to be more productive and others less so?”. Forget how you measure it, how do you increase it?

An interesting angle on this comes from an experiment discussed by Dan Ariely in a recent TED talk.  (BTW, I’m a big TED fan. A great source of inspiration, information, and innovation.) The result of the experiment was that people would work 50% harder – for less money on average – if there was even a small amount of meaning or purpose to their work.  50%.  Given the size of that increase, it’s worth considering how much time and effort you spend on creating meaning at work, rather than measurement of work.

What's really holding you back?

Frustrated with results, but not entirely sure what the problem is?  Here’s a checklist to start diagnosing what’s really holding you back:

  1. Are you thinking about – and talking about – your situation productively?  What’s the balance between “we have to…” and “we want to…”? ("Want to" tends to be more productive.)
  2. How big is your definition of “we”, as in “we want to…”?
  3. What’s the level of energy, courage and confidence in the organisation? If it's low, why?
  4. How clear is the purpose of your business?  Is it only about shareholder returns, or are there aspects of your purpose that will appeal broadly?
  5. Are the values and accepted behaviours in the organisation supportive of working quickly in collaboration?
  6. Do you have reliable, fast-cycle management processes for information sharing and co-ordination of action?
  7. Is there a written set of goals, timelined plans with clear accountabilities, and measures of progress?
  8. Do you have an written, shared model of how your business works today?
  9. Do people across the business have visibility to external developments that might impact them?
  10. 10. Do you have a rich and fresh flow of analysis, insights, and intuition about the business? Could you be missing key aspects of your situation?
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