Strategic Response Speed - the essential survival metric

Strategic response speed isn’t something most organisations measure, but it is rapidly becoming one of the most important dimensions of organisational effectiveness and performance.

Strategic response speed is how fast your business can respond to external change – first detecting it, then adapting and changing accordingly. It’s a new idea.  Of course, businesses have been developing strategies, and implementing them, for years.  And, managers have been complaining for almost as long about how long it takes to implement change. But seen as an overall organisational response to new threats and opportunities, which needs to be thought of and managed as a whole, it’s a new idea. And, like most new ideas, it needs to be understood before it can be managed.  So, here’s a quick introduction to the idea. 

Strategic response requires mobilisation across most, if not all, of the business model. 

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The Business Model

That may seem obvious, but it’s a point worth making, as it brings into focus the range of things that might need to change – some of which aren’t obvious.  As one example, for many businesses, their enabling activities and infrastructure (Finance, HR, physical space, IT, etc.) are barriers to making change happen quickly and often need major rebuilding to support what could seem like fairly minor strategic shifts: witness the struggle of so many organisations to bring in new “digital” skills and talent when their pay and reward arrangements (as well as performance management processes) are better suited for the world of 10 or 15 years ago. 

There are 7 key stages to strategic response, that map roughly to parts of this business model.

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Seven Stages of Strategic Response

7 stages of strategic change:

1.      Sense – Detecting opportunities / threats that require a response.

2.     Decide – Evaluating available information and deciding upon a course of action (or none at all).

3.     Develop – Developing the form and manner of response – e.g. new customer offerings, new organisation structure, new processes.

4.     Procure – Obtain resources required to carry out a response – which may require changes in existing supply arrangements and / or the creation of new supply chains.

5.     Enable – Putting in place the supporting activities and infrastructure to allow changes to be made. This could include new HR processes, different finance and transaction processing systems, etc.

6.    Implement – Putting new processes, etc. in place.  

7.     Deliver – Responding externally and interacting with customers.

For a particular strategic response these can happen in a different order, at different times. Change may be emergent from the frontline, organisations may sense a threat or opportunity they might want to respond to, and develop a response, before making a decision to fully commit to enacting the response.  But, regardless of when and how, these fundamental stages will be present – and it’s worth considering them as a whole.

So, with that background, here are the questions to be answered:

• How long does it take your organisation to respond to emerging threats and opportunities? 
• Is that time getting longer or shorter, and why?
• How does that time compare to how fast the world is changing and the speed at which new things are coming at you?
• What would have to change to be faster, and what could you do if you were quicker?

Getting a precise, fact-based answer to any of those questions would be a major undertaking, and perhaps not worth the effort.  But, getting a general sense of the answers – and more importantly, what you might do about them – is probably a discussion worth having in your organisation. Who knows where it might lead? 

“The future is going to be fabulous – let’s get there quicker”

Meaning or measurement

A recent Wharton article focuses on the topic of how to measure employee performance in a world where output volume is no longer an effective measure. A good topic, but a decade or more out of date. The shift away from “production line” approaches – in manufacturing as well as services – started at least as long ago as the introduction of desktop computers.  They provided a way to bring information together quickly to respond to customer requirements faster, but more importantly more flexibly.  This, along with other changes in business models, created customer expectations around service, speed, and innovation that many businesses are still struggling to fully respond to.

Of course, the professors at Wharton know this.  They describe the problems that can come from a “more output for less input” mentality, and sensible steps that can be taken to move away from that.  But, underlying the various difficulties and solutions they discuss is the question: “what leads some employees to be more productive and others less so?”. Forget how you measure it, how do you increase it?

An interesting angle on this comes from an experiment discussed by Dan Ariely in a recent TED talk.  (BTW, I’m a big TED fan. A great source of inspiration, information, and innovation.) The result of the experiment was that people would work 50% harder – for less money on average – if there was even a small amount of meaning or purpose to their work.  50%.  Given the size of that increase, it’s worth considering how much time and effort you spend on creating meaning at work, rather than measurement of work.

What's really holding you back?

Frustrated with results, but not entirely sure what the problem is?  Here’s a checklist to start diagnosing what’s really holding you back:

1. Are you thinking about – and talking about – your situation productively?  What’s the balance between “we have to…” and “we want to…”? ("Want to" tends to be more productive.)
2. How big is your definition of “we”, as in “we want to…”?
3. What’s the level of energy, courage and confidence in the organisation? If it's low, why?
4. How clear is the purpose of your business?  Is it only about shareholder returns, or are there aspects of your purpose that will appeal broadly?
5. Are the values and accepted behaviours in the organisation supportive of working quickly in collaboration?
6. Do you have reliable, fast-cycle management processes for information sharing and co-ordination of action?
7. Is there a written set of goals, timelined plans with clear accountabilities, and measures of progress?
8. Do you have an written, shared model of how your business works today?
9. Do people across the business have visibility to external developments that might impact them?
10. 10. Do you have a rich and fresh flow of analysis, insights, and intuition about the business? Could you be missing key aspects of your situation?

Both could work - how do you make your leadership choice?

My good friend Francois Gall tipped me off to a really great letter to shareholders from Amazon. There's a lot in it to think about: the link they see between their customer-driven focus and their unending quest to improve, their frank recognition that to make progress you have to accept you'll make mistakes, the consistency of their direction over time. But, the thing that struck me the most was that they admit there are at least two approaches to maximising business success.  One (customer focus) which they've chosen and one (competitor focus) which they haven't. If the data and analysis tells you there's one best option, there's really no choice.  In my experience, business  isn't often like that.  Usually, there are at least two sensible options (sometimes more) and all the analysis in the world can't show you which is best.  When there are multiple directions that could lead to the results you want, then it's down to a real choice - and that's where leadership starts.  When both could work, how do you make your leadership choice?

Are fishermen always liars?

We all know about the stories fishermen tell of the one that got away. I'm wondering if fishermen aren't liars in a different sense. To catch a fish, they offer something: a worm, a fake bug, something. But, it's not what it appears to be. It's a hook disguised as something tasty (at least to a fish). In essence, it's a lie. It only works because the fish can't tell the difference. It's not a fair exchange, it's basically theft.

Maybe that's ok if you're lying to is a fish. But what about lying to people? How many businesses only work because they know more than their customers, because their customers can't tell the difference? However many, the truth is they aren't creating any real value, they're just lying, cheating, and stealing.