To stay competitive, your business strategy must not only adapt quickly to the unexpected, but also respond in real time to data all around you.
by Ali Minnick
The analogy between planning a road trip and developing a business strategy is clear, but I believe we need to extend it further. In a landscape of rapidly evolving economic conditions and technologies, what will it really take to drive your business forward successfully?
Let's take a scenic journey through three approaches to strategic planning:
From road atlas to GPS
Only a decade ago, the road atlas—an oversized book of maps, updated annually—was a staple in every car. But when GPS navigation systems arrived, travelers were quick to switch to this more dynamic solution.
Similarly, businesses and individual operating units historically created comprehensive strategies on an annual basis to correspond with other major planning efforts. The yearly routine often caused agony throughout organizations. Extraordinary effort went into creating 400-page documents that were outdated as soon as they were published—just like a road atlas.
An “atlas strategy” is entirely static, useful only if your business is immune to any internal or external change. It aligns resources to a single path and therefore:
- Impedes the ability to quickly make adjustments when faced with challenges.
- Limits the ability to capitalize on new options as the environment changes.
- Inhibits the ability to leverage an existing framework to determine the next strategic destination.
Today, many companies have shifted to a more adaptive, agile approach—a “GPS strategy” that uses iterative tools, processes, and governance to react and adapt to internal and external changes. A GPS strategy:
- Operates on an agile foundation, enabling change and integrated business planning.
- Provides an evolutionary governance toolkit that can be used long-term, while still addressing the needs of the business.
- Implements control measures to mitigate risk (like rest stops or check points), ultimately resulting in continual support and guidance throughout the strategic journey.
Sounds pretty good. But is it enough?
Disruption in the driver’s seat
The increasing value of information over infrastructure has led many asset-heavy organizations down a bumpy road, making plotting the path ahead even more complex. For many, the bumpy road has become the end of the road. The average lifespan of an S&P 500 company has decreased from 67 years in the 1920s to 15 years today, and 89% of the Fortune 500 companies from 1955 were not on the list in 2014. At the same time, barriers to entry have lowered, and successful companies are being disrupted more easily than ever.
Today, no company is immune to disruption. The automotive industry is a prime example. Autonomous cars, ridesharing apps, and many other factors have forced many well-established companies out of cruise control and into a race to win in the new mobility industry.
At the same time, autonomous vehicles themselves highlight precisely the qualities we need to avoid disruption with smarter strategy. These vehicles have navigation systems to guide you to your destination, but they also take in data continuously through sensors that aid navigation and ensure a safe arrival.
In the same way, an “autonomous strategy” has an outward focus. It relies on data-based, real-time insights that keep your business tuned to the ever-changing needs and expectations of customers and employees. It’s more than just adaptive. It’s constantly looking ahead and around to proactively identify new risks and opportunities.
Toward an autonomous strategy
Here are a few examples of how a more autonomous strategic planning approach can help your organization drive forward meaningfully.
- Steering based on external data. Many organizations develop strategies as part of internal budget cycles and set priorities through internal consensus meetings, skipping even the most basic competitive analysis. Consider how much time your organization spends looking inward versus outward to set strategy. Break the cycle of comfort by having your executive team develop a strategy to put you out of business. What would it look like to disrupt yourself before someone else does?
- Real-time navigation adjustments. Drivers today expect more than just GPS navigation to help us get where we’re going. We rely on automatic brakes and controlled adaptive cruise control that speeds up and down in reaction to internal and external changes. Consider the level of adaptability in your resources and investments. What processes or enablers do you have in place to speed up or slow down based on data and insights? Do you have the necessary talent to address your employees’ or customers’ new desires or unmet needs with human centered design? How can you increase your change agility?
- External sensors. Autonomous vehicles use sensors to bring in outside data points that interact with inside machinery. What data or “sensors” do you have to inform your strategy? Are you combining internal and external data sets to drive insights? Have you invested in predictive market research or what-if analysis tools like Anaplan to connect formerly disparate data sets and produce forward-looking trends and insights?
- Insurance. Autonomous vehicles can still fail due to other vehicles or failure in technology, so it’s important to have insurance. Adaptability is your insurance against disruption. Do you have diversification and other types of “insurance” in place to protect you?
Going the distance
In short, it’s past time to ditch the atlas. An adaptive, GPS-style strategy will help you spend less time lost on the road—but there’s a tremendous opportunity to leverage data further to avoid obstacles and discover new routes to success with a more autonomous approach.
What’s ahead? Most likely, the next step in strategic planning maturity will parallel autonomous space travel. Today, most strategies are focused on doing things better or cheaper, and differentiating in new ways. In the future, boundaries and constraints will shift across the entire business ecosystem. Knowledge democratization, social responsibility, radical intelligence, partnership evolutions, and, yes, robots will change the footprint of business. To navigate the new terrain, more globalized planning and long-range exploration will be necessary to sustain success over time.
Regardless of the business you’re in, the road ahead is more unpredictable than ever. It’s time to re-evaluate traditional approaches and ensure your strategy is ready to drive success.