Does your organization have a handle on the factors that are most likely to impact your ability to achieve your strategy, internally and externally, across all focus areas? How do you ensure that your organization comprehensively translates the outcomes of your ongoing business environment analysis processes into stated strategy gaps and projected future scenarios that can be translated into action? Is this process iterative and flow down into the organization to support the creation of a larger body of knowledge that everyone benefits from? Is it inclusive and does it glean the perspectives of subject matter experts from across the organization, rounding each otherâ€™s perspectives off? Is it specific, and does it nail the issues down to the point where you understand the factors that have the greatest potential for impact and your degree of control over them? What could you do with this kind of information? Does this sound like a lot of work?
Careful design and ongoing adjustment to a corporate strategy management system accomplishes all these things in less time than it takes to fumble through a disjointed approach. The portion of this overall process that companies need to consider adding is an open knowledge management system. Taking an open and integrative approach to strategy and risk management makes everyoneâ€™s job easier and allows all corporate support functions to be more effective. The more deeply you engrain this into all areas of the company, the easier your job will be.
One of the primary purposes of managing collective knowledge within an organization is to improve the quality of decisions made. As a CEO, you will particularly appreciate the benefit of knowing that the ball wonâ€™t get dropped on current and emerging strategic issues. The focus should be on ensuring ongoing relevance of information, but particularly on escalating the degree of quality and insight with every iteration of the process. Eventually, this becomes a formidable vehicle for decision making, strategy and risk management at all levels of the company. As we have heard, escalate your information from data -> information -> knowledge -> wisdom.
Knowledge management can be used as the hub for all major phases of strategy management; development, alignment, implementation and renewal. When done well, this repository becomes the jumping off point for:
– Identifying emerging strategy gaps and critical issues / opportunities
– Forming the basis for scenario planning
– Utilizing the brain power and perspectives of your entire organization
– Increasing the accuracy of your strategy review decisions
– Determining the relevance of your approach to achieving your initiatives
– Engaging employees in a dialogue about strategy and the environmental context for decisions you have made
– Fully integrating risk management into the strategy management world
– More fully and consistently understanding your environment
Once you create momentum around this, you have a central vehicle for driving decision making, building knowledge, and reviewing strategy relevance. Your entire organization will be playing from the same song-sheet, one which was developed with the collective knowledge of your subject matter experts. Quality of decision making is worth its weight in gold in todayâ€™s business environment.
Itâ€™s a fundamentally world-altering realization that just about every management practice that you have ever learned was developed in a time when a much greater degree of stability was the norm. Thinking about the implications of that realization should result in some extensive inner dialogue. One would have to have had their head in the sand for the past 5 years not to realize that the world is changing at a pace never before seen. Organizations need to begin to adapt to the new reality, and management systems need to become significantly more nimble than they currently are today.
Of course, this isnâ€™t to say that an organization should be so focused on mitigating potential risks that they fail to capitalize on opportunities. The fact is that unforeseen events are going to continue to occur and short of an impending up-surge in fortune telling, only nimble organizations with the capacity and processes to support good decision making and rapid strategic alignment will be here to tell the story 20 years from now.
Now that weâ€™ve acknowledged the new reality, we MUST fundamentally change how we manage our organizations. This starts by asking some of the tough questions:
1) Do we push the boundaries of the information we have to determine what it means, rather than just spouting off stats without discussions about the implications? This requires more discipline of thought.
2) Do we have a view of where our world is moving, and a position on where weâ€™re trying to steer it? This requires the discipline of steering the market forces consistent with your degree of control.
3) Have you linked your budget and strategy processes? Are you relying on 14 month out budgets or have you shifted to rolling projections that are more consistent with the pace of your business environment?
4) Is your organization truly capable of aligning in a meaningful way to corporate strategy, and have you gotten rid of the pockets of planning hold-outs?
5) How timely are the strategy review and budget discussions? Is all of the information still relevant for decision making and does it result in interesting and productive discussion?
Regardless of whether you see yourself as an innovator or a follower, quality of management practice is the only path to excelling in any value discipline. It is truly the ante for the coming age of business.
A key concept to consider as you design and execute a corporate planning and risk management framework is what drives your decision making. Are you moving toward something or are you moving away from something? Simple question, but worth taking a second to consider. This applies as much to our personal lives as it does to your organization.
To what degree are you moving away from risks rather than optimizing them? To what degree are you reacting to your competition, rather than leading them? It’s an important distinction to make, because each focus is 180 degrees apart, depending on which path you choose.
We all know the universal truth that we move toward what we think about. While it’s critical to recognize and manage the factors in your environment, it’s important that they stay within the context of the overall strategy, rather than the other way around. In organizations where a sense of purpose isn’t inspirational and pervasive, the tendency may be to focus on all the factors that resist your success.
To change this, you may not need to redesign any major aspect of your management system, other than the questions you ask as you facilitate. A strong sense of inspiring purpose drowns out fear, distractions and increases productivity, organizational alignment and profitability.