Why does your “new” strategy look the same as your old strategy?

The strategy calls for our most inspiring creative management thinking as we seek to find ways to respond to changing conditions and take advantage of our latest competition method of advantage. So why does your shiny new strategic plan often look the same as the last? A guy named Frank summed it up perfectly for me. This was over 20 years ago, but I remember it like it was yesterday. I’m running a strategy meeting with 14 executives. We have flipcharts, whiteboards and screens and we are following an agreed agenda. I am taking points from the group. Then suddenly Frank said, “I don’t know why we have these strategy workshops every year. It always turns out to be business as usual.” This is the first time I’ve heard the term “business as usual” in this context. But Frank was right. Since then, I’ve seen this happen on other occasions with other clients – strategic planning has become the same. Conventional strategy is your enemy. Here, I’ll show you how to shift your thinking from “strategic development” to “strategic discovery,” and give examples of how to break out of the conventional strategy loop and look outside the industry for ideas.

Avoid Routine Tactics

Step 1: Change your mindset. Each textbook reinforces the traditional language around strategy that strategy requires “development.” But this turns the executive team inward. Instead of looking for new ideas, they went back to industry conventions and developed strategies based on past practices. The first step in changing this is to change your thinking and language from “development” to “discovery”. Rather than thinking the answer is “here” (with the executive team), think the answer is “there” (with the stakeholders). This simple change has a profound effect on how managers think and behave. Managers no longer think they must have all the answers. They also don’t think they’ll lose face if they don’t. Instead, a new mindset of inquiry took hold. The message is “arguably, we don’t know”. Humility, not arrogance, became a valuable trait.

Step 2: Recognize your weaknesses.

While changing your mindset is a useful starting point, you need more to get your organization to embrace true strategic invention. Consider this example: Felix, a senior executive at a health insurance company, saw a once-in-a-lifetime opportunity to create a better customer experience, greater efficiency, and improved health outcomes in the wake of the pandemic. The problem is that it requires his company to look at its role in a whole new way. New models are also needed – so-called “digital front door” approaches to engaging membership. It combines virtual care, remote patient monitoring, patient navigation and guidance with price transparency to provide consumers with an integrated experience. While the benefits are obvious—increased efficiency, reduced waste, and improved consumer satisfaction—the strategic transformation was no easy task for Felix’s company. This takes us to the next step.

Step 3. Find your partner.

Felix sees an opportunity to look beyond health insurance to companies that have gone through a similar journey of leveraging technology to create real customer value and competitive advantage. He found market leaders in Australian banking – Commonwealth Bank, Westpac, National Australia Bank and ANZ. They have gone through a similar revolution, becoming providers of digitally-driven experiences at nearly every touchpoint. By studying them, Felix learned what was successful and, just as importantly, what failed. Their experience shows Felix how he can harness the power of automation to enhance the customer experience and drive innovation by creating customer applications. He was also able to determine which technical skills his company needed to drive these changes. At another company, one of the largest cosmetic companies in the world, Tony, one of the executives, studied Red Bull, the famous Austrian energy drink maker. He has been impressed by Red Bull’s efficient management of audiences through media channels. His company and Red Bull even collaborated on a men’s grooming and skincare line. This resulted in a strategy to reach a common target market, the young male audience. They created an “activation” in Woolworths, a major Australian supermarket chain, to jointly promote his business and Red Bull products. Then there’s Emma, ​​who leads a social enterprise that provides employment to people affected by the justice system. The business packs and delivers groceries to offices and factories. The lack of a proper business strategy is considered a shortcoming of social enterprise, and Emma needs to improve the performance of her organization to achieve true commercialization. Her inspiration comes from the automotive industry. By studying Toyota, Emma and her team discovered ways to improve customer service by increasing the accuracy of order fulfillment, the speed of order processing, and the timeliness of delivery — all factors important to any competitive advantage.

Get over your reluctance

Why don’t more companies do this more often? Tony sees one obstacle as “organizational culture”. He said, “How do we get out of our four walls and really start looking at our industry and what we’re doing?” AG Lafley describes how he was overly focused when he was CEO of Procter & Gamble Internal needs. He had to constantly fight the “gravity” within. This is an excellent descriptive metaphor for the experience of most managers. Everyone is playing the actions and reactions of their colleagues. Another obstacle is that managers perceive their problems as unique. Felix labelled it a “false uniqueness bias.” While there are certainly nuances between industries, broader strategic issues are likely to be shared across other industries. Emma is referring to the “illusion of validity”. Managers think they know their business better than anyone, and external input is never helpful.

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My experience with Frank really was a wake-up call in my opening story. I’ve come to realize that strategic thinking and strategic design often lead to dead ends, and the executive team is just strategizing as usual. Keep an eye on this and jump ship to gather strategic insights from other industries if needed.