Making better strategy — a breakfast discussion

We recently published an article called “How do we make better strategy?” inspired by conversations we have been having with our clients.

In these conversations, our clients describe a sense of urgency, brought about by a rapidly changing landscape and a desire to improve the way their organisations are responding.

The world is changing fast, fundamental assumptions are being challenged, uncertainty is high and many describe tougher market conditions. Traditional strategic plans and tools are not helping them to address these issues.

Last month, we hosted a breakfast bringing together a dozen senior leaders from charities and social progress organisations to discuss these issues.

This article summarises the discussion. It covers how people think about strategy, the practical challenges they face and some of the steps they were taking to make better strategy.

“Strategy” has mixed reputation in the sector

For many in the room, the word “strategy” has a mixed reputation.

For those who described it in positive terms, strategy was about challenging core assumptions, asking the right questions and making real choices. One key idea was that “strategy never stops”. It’s a way of thinking, not a document that sits on a shelf.

Those who saw strategy as a journey not a document were interested in questions of ambition, impact, culture and how to align their people to these ideas.

The common challenge was to make strategy about useful insights, real choices, meaningful change and engaged teams. In most of the successful cases, the process of developing and refining strategy was constant and outward-looking. Ongoing engagement with a wide group of stakeholders was fundamental to the approach.

In places where the word “strategy” has a bad reputation, it was associated with endless analysis, discussion instead of decisions, baffling away days and no real change. The idea of strategy had become “a crutch for organisations that don’t like to make decisions”. Some had even banned the use of the word.

Though if your organisation’s strategy doesn’t link to change, doesn’t set priorities, doesn’t give clarity about what you’re trying to do and how you’re going to do it, have you even got a strategy?

Striking the right balance

The group talked about the challenges of striking the right balance when making strategic decisions.

The examples of real-life trade-offs that the group were currently working on included:

• Long-term impact v Short-term plans: How do you think about impact that might occur in the very long-term in the context of setting shorter-term strategy? In areas like medical research, impact comes in decades. How do you know if you’re on track?
• Direction v Delegation: What’s the right level of detail for a strategy? How do you put in enough detail to be clear, whilst creating a mandate for teams to own their choices?
• Consensus v Command: What’s the right balance between making choices as a leader and accommodating competing views across an organisation? Charities in particular have a tendency to be very deliberative, but the mechanism by which those deliberations turn into decisions is often unclear.
• Ambiguity v Certainty: How can we make good decisions when we don’t know what’s going to happen? How do we accommodate uncertainty? How do we get confident “enough” in our decisions without being paralysed by the need to do ever more analysis?
• Setting a direction v Keeping options open: How do you get the balance right between setting a long-term direction, whilst being open to new opportunities that might turn up? By aligning strategy too closely with internal planning and budgeting, there’s a risk you miss the big opportunity.
• Change v BAU: How do you make room for new initiatives whilst maintaining business-as-usual? How do you trade-off innovation with resilience?
• Strategy v Culture: To what extent should your strategic direction go with the grain of an organisation’s culture? Should you (and can you) seek to change the fundamentals of an organisational culture? For some, the entrenched cultures of their organisation made radical change incredibly difficult.
• Radical v Incremental: How can we judge how bold to be in our strategic choices? How do we decide that? When is the right time to go “all-in” on a particular option? How do we evaluate these risks?
• Pragmatism v Idealism: How do you live within the constraints of an organisation without being captured? How do you stay “fresh”? When does being driven by values become a barrier to change?

There was consensus that the role of the leader and strategist is to work out what balance to strike across these trade-offs and make decisions based on that view.

The answer will be different for each particular organisation, but also within an organisation at different times and under different circumstances. You need a good sense of these conditions and then need to calibrate the approach accordingly.

So what were people doing?

The group shared different ways that they were trying to move from “strategic planning” as a top-down, inward-looking, budget-focussed way of working to “strategic thinking” that was more open, collaborative and responsive.

The group discussed three main themes:

• Opening up the way they were thinking about strategy
• Building strategic capabilities
• Challenging core assumptions

Opening up the way they were thinking about strategy

• Recognising context. Leaders recognise it is important to spend time building a consensus around the starting point for a strategy. Good strategies acknowledge context. This can include the heritage and history of an organisation as much as it includes an analysis of the current landscape. People need to see that where you’ve come from informs where you’re going to.
• Practicing humility. Strategy is not about certainty.”The job is not to predict the future, but to be ready for various different futures”. No-one knows for sure what’s going to happen. Even with a good strategy, there is still lots of risk, uncertainty and the chance of making mistakes. Recognising that your strategy is based on imperfect information and will have to accommodate unknown factors in the future avoids tempting fate. It gives you permission to change direction when the facts change and avoids creating a stubborn attachment to an irrelevant approach, or an out-of-date document.
• Openness and participation. In an uncertain world, where context and humility are important, the value in opening up the strategy process was obvious. Diverse perspectives bring richer insights and are more engaging. Beyond that, many charities have an obligation to include those on whose behalf they claim to act. Based on the principle “nothing about us without us”, mission-driven organisations need to confront the often parochial and paternalistic assumptions underlying a lot of their approaches. It can be difficult to challenge these core assumptions, but it is essential.
• Experiments in collaborative impact: When organisations make clear that their ambition is to change a whole system, the case for collaboration and partnerships becomes obvious. Strategies — and leaders — need to acknowledge that they are only one player in a bigger game. Enabling others to succeed can and should be a key objective. The job of actually developing collective strategies for impact was seen as important, but there were few examples of genuine long-term, multi-party strategy-making.

Building strategic capabilities

• Investing in people: One way that leaders felt they could be better prepared for a more uncertain future was to invest in the people that formed their organisations and movements. Most were investing in their staff — using training, internal communications, devolved responsibilities and shared knowledge — to ensure that people were informed, empowered and inspired about an organisation’s strategy, vision and direction. The most interesting examples went beyond the boundaries of their own organisations, working with volunteers, communities and other organisations with support, skills and resources in support of a common vision.
• Trying new ways of working: It is essential that organisations can respond quickly to new developments. People were trialling new ways of working to make this happen. This typically involved more agile, project-based ways of working in cross-disciplinary teams. It incorporated feedback and learning loops, investments in small experiments and more speculative initiatives and partnerships. Culture is a key issue. For example, thinking about portfolios of projects where some are expected to fail demands a new mindset in organisations that have traditionally sought to minimise the risks of their programmes. A number of organisations were deliberately placing people and resources outside their existing cultures and structures, and setting up “special project” teams or new partnerships, in order to encourage fundamentally different ways of thinking.

Challenging basic assumptions

• Challenging group-think. There are number of fundamental assumptions in the more traditional charities about where their income comes from, the needs of those they exist to serve, the solutions that make a difference and the way change happens. All of these are being questioned, and need to be challenged. The group felt that an organisation that was honest with itself about these questions and was able to have difficult conversations, would by definition, end up with more radical, and more ambitious strategies for impact. Comfortable, incremental approaches wouldn’t cut it. Yet across the sector, people identified areas of “group-think” where the challenges of change could not, or would not, be talked about. One participant reported that “we have learned so much about the way people get out of poverty, but the way we address that in the field hasn’t” and that was down to “culture and groupthink”.
• Challenging “growth” as an assumption. Bigger isn’t necessarily better. There was agreement that “growth” is not a strategy, but very few had a mandate not to grow. Growth is a means to an end, not an end in itself. You can’t plan to grow, especially in a shrinking market, without knowing how you are going to grow or worse, why you want to grow. Yet many observed that strategies are often articulated primarily in terms of growth. Those that had explicitly chosen not to grow but focus on increasing impact had often got smaller and more effective as a result.
• Challenging traditional processes. There was a lot of interest in trying different processes for developing and leading “strategy”. Some had experimented with unlinking strategy from annual budgeting. Others were opening up, engaging new actors and being more transparent about their deliberations. One had a rolling, long-range vision that was regularly updated, so that their “ten year ambition” was regularly updated. This was an area of great experimentation, and no clear consensus beyond an agreement that traditional tools weren’t working. Maybe you don’t need a strategic plan?

Across the discussion, there was strong agreement that whatever your approach to strategy, organisations working on social progress — especially in the traditional charity sector — were facing tough, fundamental questions.

In the face of these questions, the best charities cultivate a sense of their own agency and ability to affect change.

“We are unapologetic about our ambition and we seek to align the charity behind that ambition from the board to the newest member of the team” said one. This sense of purpose was felt to be the great advantage of a mission-driven organisation. The clearer you can be about the change you want to see in the world, the easier the process of strategy becomes.

In our next article, we’ll look at some of the new frameworks and guides that are emerging to help answer these tough questions about strategy for social progress.

Originally published at https://www.firetail.co.uk on August 15, 2019.