Addressing the fear of strategy being ‘too big a problem to fix’
Thinking holistically and systemically about the role of your business in society is not something to cram into a busy day or week. Thinking in this way is a creative process and requires dedicated time. It is natural for people to feel overwhelmed by having to think differently about how they develop a purpose-led strategy.
The COVID crisis has inevitably provoked tension within businesses. While many businesses demonstrated a powerful and sincere desire to care about the needs of their people, customers and other stakeholders during the pandemic, tensions are emerging with pressures to reduce costs and headcount while progressing with a myriad of complex issues (e.g. race, diversity, climate crisis, mental health) and responding to external pressures e.g. ESG reporting. In this context there can be a temptation in some businesses to lower the ambition to become purpose-led as a way of relieving the tension.
As leadership face into difficult transitions, this tension can be used creatively in a way that keeps the ambition high, laying a pathway to the future rather than trying to reduce anxiety by lowering the ambition, thereby holding onto the present or regressing to the past.
As we emerge from this crisis, we have an opportunity to strengthen the collective commitment to purpose to explore how to use this tension creatively and hold the complexity productively, finding a pathway together in becoming purpose-led.
Here are some tips captured from our conversations with business:
- Set aside one week for strategy (rather than a half-day here and there over 6 months)
- Consider working with the most organised or progressed team to develop a purpose-led strategy for their business. Then use this as a playbook for other parts of the organisation. Create communities of practice. Think rolling thunder and quick wins
- No one gets excited about ‘Don’ts’. Shift the message to ‘this is what we want to be’ to help create inspiration
- Some organisations set ‘big hairy long term goals’ which can have a galvanising impact across the organisation, but sometimes reduce the ‘here and now’ discipline required to drive change quickly. Striking the balance between setting large goals versus more immediate goals based on today’s start-point depends on the culture of the organisation
- Conversely, other organisations overestimate what they can achieve in a year and underestimate what they can do in 10 years, be clear on your intent to have an integrated purpose-led strategy and build a sustainable plan to get there
- Don’t lose sight of the short term. One of the very common challenges in moving to a purpose-led strategy is managing a transition and investing for a different future. Any business only gets to the long term through the short term, and that process has to be staged and planned to carry the business through
- When it comes to thinking about necessary or desired rates of financial return, think in terms of balancing rather than maximising. Ensuring reasonable returns are a necessary constraint and not the aim
Example:
One CEO helped her management team overcome the ‘too big to be fixed’ fear. The company made a public commitment to be Net Zero within 7 years. To develop a plan on how to get there she started with educating the team on the Paris Climate Agreement, Scope 1,2,3 etc. But this had a paralysing effect on the team.
To support the teams, she created a short, simple strategy for addressing net-zero, outlined on a half a page. The strategy made certain assumptions. By being clear on the assumptions, and the different scenarios these assumptions created, the team had something to review, challenge and adapt. Together they created a clearer picture of how the company could get to Net Zero, although the details of this picture will be filled in by the teams and adapted and evolved as details become clearer.
The strategy boils down to ‘offset’ and ‘reduction’. Team A (offset) is responsible for identifying opportunities to invest. Team B (reduction) is responsible for finding new innovations to reduce the carbon footprint of their operations. Each team has a kiloton carbon target. Having a clearer picture with bold targets and assigned accountability invigorates a ‘gritty ops’ business.
Another reason it can be hard to develop a purpose-led strategy is that people often disagree about their visions of the future and how to achieve it. The Three Horizons framework is a simple and intuitive framework for thinking about the future and exploring assumptions that underpin this shared vision. It offers a practical way to begin constructive conversations about the future.
Today’s world is marked by acute uncertainty in many dimensions, coupled with accelerating rates of technological change and disruption in many industries. In these conditions, the old strategic planning approach of defining the destination and then laying down the road to get there over a period of years, confident that the landscape will remain stable in the meantime, often no longer holds. In conditions of uncertainty, which look unlikely to change anytime soon, what becomes more important alongside scenario planning are the identity of the business (which a clear purpose, lived out in the business, provides) and also clarity about the way in which choices are made, so that the quality of decision taking is consistently shaped and informed by the pursuit of the purpose and the desire to act in a purpose-led way, however, the future turns out.