Secrets to creating business strategy that works

The traditional model for strategy development is dead. No longer can a company's executives take a week off to go on a retreat and come back with some tans and a five-year plan.

Or at least so says Stefan Stern, who has backed the idea of "adaptive advantage" from the Boston Consulting Group (BCG):

"Organisations with adaptive advantage recognise the unpredictability of today's environment and the limits of deductive analysis," [BCG writes]. New problems are constantly emerging. Well-run businesses respond effectively to them.

In our frenetically-paced world, Stern argues that the last four years and 364 days of a five-year plan are irrelevant.

It's a compelling argument. And I'm sure that adaptive advantage makes great business sense for many companies. But before we throw the baby out with the bathwater, look at the companies that Stern cites as effectively implementing adaptive advantage: Google, with online advertising. Amazon, with the Kindle. Toyota, with the Prius. Proctor & Gamble, with the trialling of products. And Red Hat, with its new software.

All but one of these examples showcases a company employing a new technology.

Which doesn't mean adaptive advantage is wrong. Anything but, in fact. But we also shouldn't write the obituary for "traditional" strategy planning just yet. Because plenty of companies still operate and thrive under it today.

In Fortune's leadership development programs, Steve Brown consistently makes the point, 'if it works it's good; if it doesn't work, it's bad'. And by "it", he means any change, any initiative, any action that a business or manager takes. He emphasises the need for management teams to schedule regular CREATIVE TIME (very few do), to reflect on the history of the business, how it has performed and how it's performing now, so management can continuously adapt to an unpredictable future. 150 years ago Darwin saw that it was not simply about 'survival of the fittest'; he was clear that it was about 'survival of the best adapted'.

If the five-year plan works for your company, stick with it. If your business is not cutting then try something different... establish an inclusive process for discovering new strategic creativity and adaptability in your business.

That's the key to creating business strategy that works.

Posted: 12/15/2009 9:50:07 AM by Nick Morris | with 0 comments
Filed under: adaptability, creativity, strategy
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