Applications for the Organizational Strategist

Applications for the Organizational Strategist

We said at the outset of this month’s blog posts that effective strategy crafting begins from a strategic frame of reference or habit of seeing the world that executive leaders can learn to embrace. In the first discussion we reviewed the three dimensions that compose our perspective on strategy – an organization’s internal dynamics, its external environment, and its movement through multiple time horizons. In the second, we compared strategy’s scope or boundaries to those of organizational activity and planning. We are now in a position to step back and examine more fully what a strategic habit of mind actually is, and what this way of seeing the world implies in terms of organizational strategy crafting. We offer three inventories as tools for the strategist to continually assess and keep the information portfolios well stocked for strategic thinking.

Recommendations Regarding Organizational Activity. The strategist sees organizational activity holistically, as the whole of what the organization does – its combined operations, accrued day in and day out – in its movement forward through time. Moreover, the strategic mindset understands that the product of this activity, or the outcome of all of this “organizational doing,” is much more than simply profit or loss, or production quotas met, or delivery schedules filled. Rather, strategy sees organizational activity as having a consequent effect (or set of effects) upon the organization’s environmental landscape. Whatever the organization does, whatever it touches in its activity, affects the world it inhabits in ways that can be, and often are, both intentional… or not. The release of a new product, for example, draws new market share but may also stoke competition; letting go of a disgruntled employee eases workplace tension, but may inspire a lawsuit; etc.

The strategist sees organizational activity as a vast flow of stimuli and response, of energy exchange with its environment. For an interesting tangent about this web of life we suggest the reader consider the work of Fritjof Capra to read more about interconnected systems. But back to our point, the strategist should develop a mindset that “sees” organizational activity and operations through a lens of what environmental effects and influence all of these activities create – a grand interchange of sorts of objects, ideas, artifacts, energies, and value. And on top of all of this should sit a handy set of tools and processes to observe, capture, analyze, modify, and augment the ongoing organizational activities to serve strategy in the long run.

TOOL 1: The first tool we would like offer up for the strategist’s toolbox is one at the level of organizational activity – the activity inventory. The activity inventory may seem obvious to most of you, but you would be surprised at how many organizations take this less seriously than they should. The inventory is a holistic and active inventory of an organization’s capacities – its structure, relationships, processes, brand/image, and individuals. There is a large variety of tools and frameworks for this kind of inventory and we won’t focus on any single approach. What we would like to reinforce is that the inventory must be done and built into the ongoing systems of the organization, not just a periodic event.

Recommendations Regarding Organizational Planning. Planning is an intentional and vital process of all organizations. Some level of planning must occur, even if it’s minimal, before organizational activity can happen. But the two proceed hand and hand along the arrow of time. Indeed, based on the set of desired effects an organization is trying to achieve through time (increased market share, decreased costs, market expansion, etc.), planning is a necessary process that prepares, informs, and guides organizational activity, both directly and indirectly.

Planning’s purview generally looks from today forward in time some measure beyond organizational activity. It is by definition forward leaning and endeavors to anticipate, for example, supply-chain requirements, delivery schedules, workforce expansion, etc. When the planning processes of an organization are functioning well, they not only generally predispose the organization to operate well, they also enable organizational capacity to look still further forward into the future (and capitalize on the efficiencies and advantages such forward-looking efforts afford). And when an organization’s planning functions are firing on all cylinders consistently typically one will find within that organization evidence, sometimes even a robust presence, of an important feedback loop. This loop measures and assesses, on a recurring basis, the effects organizational activity is generating, both intended and unintended. It answers a vitally important question: “Are we doing things right?” Is the organization, through its actions, achieving its intended effects, and, just as importantly, if not, then why not?

Organizational planning has a proactive capacity to drive organizational activity toward desired goals and objectives. At the same time, there exists a reactive tendency to adjust activity given environmental opportunities and challenges that emerge. These two exist as balancing act with planning informing activity and vice versa. There is also a translational role to turn strategic direction into achievable activity. When organizations achieve excellence in the planning realm, we see a legitimate assessment loop is in place and providing ongoing feedback to its planning processes. Here you’ll find the organization that is efficiently addressing market demands, and anticipating well its supply chain tensions, etc. These are typically the organizations that are top tier in the current market landscape. However planning, like operations, is also not strategy. It is a common misconception that just because an organization is planning well, it is being strategic.

So what would we recommend that organizations do at the level of planning to prepare for successful strategy processes? We recommend organizations employ the environmental data collected as an activity in high order environmental analyses. This sets up the second key strategy tool:

TOOL 2: Now focusing on the organization/environment, there also should be ongoing and deep assessment of the organization’s external environment and activity across the boundary. We recommend an environmental inventory as a descriptive assessment in terms of current opportunities and challenges (economy, market landscape, partnerships/collaborations/relationships, etc.). In addition to the inventory, however, we also recommend that this be augmented with a more sophisticated set of analytics and metrics to continually monitor changes in the environment relative to changes in organizational activity to evaluate fit in terms of widening and narrowing gaps.

Recommendations Regarding Strategy. Strategy sits “above” the realm of planning to inform and guide the planning process, just as planning does for operations. And like planning, strategy also looks forward, but much further out, and in our humble experience, much more comfortably so than the planner. Moreover, unlike the planning realm, notice that strategy’s cast is not limited to the future, but importantly also includes the past (and we’ll discuss exactly why in a bit). Indeed, when an organization’s strategic process are honed, arguably one could say that strategy’s purview could and should extend out onto the limits of an organization’s conceivable horizon line.

In strategy, there should be ongoing honest reflections on organizational effectiveness. A good way to differentiate strategy from planning is to suggest that strategy’s concern is not with an organization’s effects, but rather, strategy’s concern is with organizational “effectiveness.” And strategy’s corresponding feedback loop also helps differentiate this focus. Strategy’s feedback loop asks not Are we doing things right? but rather Are we doing the right things?. Are we in the proper markets, and if so, how long will these markets bear fruit? Are we leveraging the best practices internally? Are there new technologies approaching that could change our landscape? Is our organization well positioned for what we cannot predict? In short, strategy tends to be concerned with an organization’s existential interests, planning with organizational efficiencies, and operations with organizational output.

Figure 7 below now serves as our final image integrating all of the components from the prior sections. We find the organization, immersed in activity and operations, moving through time. All the while, the organization is impacted by the changing environment and in turn acts on the environment, creating changes and impacts as energy flows across the organizational/environmental boundaries. Multiple horizons exist across time, both into the short-term and long-term pasts as well as into the present, short-term, and long-term futures. The organization remains aware over time, on the level of activity, on the level of planning, and on the level of strategy by continually asking the questions – Are we doing things right? and Are we doing the right things?.

Figure 7 showing the full model for organizational strategy horizons and boundaries.

Let us now offer up a third tool for the strategist:

TOOL 3: In our experience we have found that few organizations do a very good job at keeping track of where they have been and where they are going. We recommended two inventories for activity and planning, the activity inventory and the environmental inventory. Now we would like you to consider a third, the historical inventory. Historical explorations and reconstructions prove to be a fundamental source for future context. There are fewer tools available to the strategist for building an historical inventory. Where we find many models for organizational activity and environment scanning and analyses, the practice of employing history as insight to the future is less developed. One can look to the historical sciences, cultural anthropology, and literature for clues. One can also consider ways to reformat the two prior inventories, activity and environmental, to highlight key outcomes and metrics for preservation in an historical inventory. In any case, again the key to do it, and do in a way that adds strategic value over time.

In our final post, the full article from this month, we will offer up a conclusion to our stream of consciousness and a .pdf of the full paper.

Happy holidays all!