How to Drive Transformation in 2022
Over the next 3 blogs I am sharing my three tips on driving transformation in 2022- Part 1
Bring long term thinking into the short term
Most businesses should know by now that creating an extensive 5-year business strategy is a waste of time. It made sense two decades ago, but things have shifted dramatically in the past decade. The pace of change has exploded and disruptive forces are all around us changing our context on a monthly basis.
Traditional companies spend an intensive 6-8 month period developing the company strategy, hiring the big shot consultants and spending a whole lot of money doing analysis that not many people see (or question) and would frankly not be relevant five years from now. Some companies will perform small updates to the strategy in between, but it's an erratic process, that doesn't change much and is simply a delivery to satisfy the board. Furthermore the CEO is not incentivized to make drastic changes to a five year strategy document that is so perfectly done. We invested so much of our time and resources on it!
Don't get me wrong, I am not advocating for short-term thinking. If you have worked with me, I am anything but a short term thinker. I am advocating for a continuous AGILE strategy process instead, which brings strategic decision making into our every day work. As an example, on a quarterly and a yearly basis we ask ourselves the following strategic questions:
How are our customers' preferences changing? (Since the start of the pandemic for example?) What are we hearing on the frontline?
What are the big outside, out of our control events that will impact our delivery, our operations, our customers or employees?
Who are our unconventional customers or competitors?
What work do we prioritize based on important new information?
What work do we say no to? (probably the most valuable but underutilized question!)
Based on our answers to these questions, we then set our ambitions.
We can absolutely have a 5 year ambition, but this should be reviewed every year in an inclusive process where more than just the leadership team is involved.
The paradox is that these exact companies who invest heavily in a 5-10 year strategy document are the ones stuck in short-term metrics (more on that in my next blog)
Yes, there will always be fire fighting, day-to-day operations that need to be taken care of. We need those people and we need those spaces. However, we also need spaces for leaders and teams to think, to analyze and assess based on long term ambitions. It is not enough to have those discussions once or twice in five years. It needs to be an integrated part of the company's way of working.
How many companies have a board who acknowledges that the company is going through one hell of a transformation and it is going to require resources from the entire organization to be successful? Does the board recognize that this won't happen for free, that the quarterly results (and thereby the yearly results) will be impacted? When we get so obsessed with short term profits we miss the upward part of the hockey stick. We are quick to make changes that take us back to how things were so we can make profits again. That is not how you built a resilient business for the future. The journey to growth and transformation is uncomfortable in the short-run but if you can persevere through the discomfort, the profits will be yours in the long-run.
