www.davanticorp.com The Three Keys To A Dynamic Strategy
Make your strategic plan agile and dynamic
As markets move faster, managers complain that strategic planning is too static and slow. A strategic plan that follows the tried and true pattern of being revived once a year for review is simply no longer acceptable. The rate of change is exploding. Evidence can be seen almost daily in trade publications, the news, and even across the street in the neighbor’s garage where the next Google is about to emerge. The life­cycle of products has shortened, the number of patents filed increases every day, and businesses we thought were unstoppable disappear within a year. Change is accelerating, not linearly, but exponentially. For organizations to survive and prosper they can’t continue to do things the way they have in the past. But not everything has changed. The fundamentals still apply. To compete and win, organizations still need a vision and a plan. A new understanding has emerged that the path to the vision is now across shifting sands. A dynamic, agile strategy is required for organizations to navigate effectively. 1 www.davanticorp.com​
copyright© 2016 www.davanticorp.com What is a dynamic strategy? Dynamic strategies and agile strategies are often used interchangeably to describe a strategic process that is capable of dealing with constantly changing market conditions, new competitors, and a steady stream of innovation. What is required to have a dynamic strategy? Implementing a dynamic strategy requires a carefully planned, repeatable process and methodology. If no defined, repeatable process is in place, then when problems arise, response will be reactive and inconsistent. This problem will be exacerbated as things continue to speed up, which they inevitably will. Poor preparation guarantees spotty—if any—progress against emergent challenges, and, more likely, failure. Making a strategy dynamic requires the use of a defined process that is continually applied to the strategic plan. Transitioning to this modern model can be implemented using a three stage approach; this approach assumes the creation of the vision and plan have already been completed. Three Keys To Implementing a Dynamic Strategy
Key 1: Start with Dynamic Inputs.​
A key ingredient for understanding context is ensuring that the organization has access to strategic knowledge. Most organizations have access to loads of data related to market conditions, competitors, regulations, and other internal and external factors. This data is considered “facts of the world.” Adding analysis to these facts, and filtering them with regard to how they affect the strategic plan, moves them into the category of strategic knowledge. When the strategic knowledge is made available to the entire organization, then the organization's ability to understand the context of the business improves dramatically. The better the business understands the context the more likely the strategic goals and objectives will be understood and their value appreciated. Your goal should be to promote the free flow of information across boundaries, with the objective of reducing resistance and improving engagement to strategic initiatives. 2 www.davanticorp.com​
copyright© 2016 www.davanticorp.com Step one is to collect the data that will become the information and knowledge that will inform the entire process. The data collected should reflect internal and external conditions. This data should be highly filtered in an automatic way to minimize human labor to get to the relevant information­­there are tools available to help with this. Once the relevant information is delivered it can be analyzed and transformed into knowledge that specifically relates to the organization’s needs. The next step is to develop a centralized repository where anyone in the organization can access the knowledge that has been collected. This information can be stored as source information or as analysis reports. It should be readily available and searchable. Once the information is created and persisted, people need to know about it. A process to distribute the information must be put in place. This process would include: ● a method that ​
regularly delivers​
relevant information in a way that is easy to read and digest in minimal time. ● the ability to deliver targeted information to groups in a timely way so that it has meaning and relevance. ● a method for feedback, to promote engagement of the targeted groups, and improve information delivery. The key outcome from this factor is strategic knowledge. This is defined as facts of the world that have been analyzed and compared to the strategic goals of the organization for relevancy. Having dynamic, filtered input sets the stage for a dynamic strategy. Key 2:​
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As a Routine, Make Strategic Decisions and Weigh Risk. ​
Implementing this stage requires an analysis process. This process must be able to review the knowledge that has been collected in the previous stage and draw conclusions. This process should address how the conclusions affect the current strategic plan and if adjustments need to be made. A method to implement this process would be to create an analysis team. This team would be responsible for coming to conclusions and making recommendations on the decisions that should be taken based on the information that has been analyzed. The team should be made up of senior management that understands the strategic plan and can provide guidance on how the decisions they recommend will affect the plan...and the future of the business. 3 www.davanticorp.com​
copyright© 2016 www.davanticorp.com The key outcome from this stage is strategic intelligence. Intelligence is knowledge that has been analyzed to provide guidance. When guidance is centered on strategy it becomes strategic intelligence. This strategic intelligence can be used to evolve the current strategic plan, making it dynamic a continuous part of managing the business and making operational decisions. Key 3.​
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Execute Despite Uncertainty.​
Strategic management is now dynamic. By this stage, your organization will have a top to bottom understanding of the business environment and a strategic plan that fueled with strategic intelligence. To actually have a dynamic strategy, there has to be execution, and to do that there must be methods and processes that execute on the plan in a way that can handle change...change that is inevitable. To succeed in the maelstrom that is modern business, the strategy must be­­and now is­­dynamic. But the plan is just a plan until it is put into action. The fundamental rules of strategic management and execution can be summarized in this list: ● The strategic plan must be clearly communicated. ● Responsibility and delegation for the plan must be clearly laid out. ● Performance must be measured and reported. Standard areas to monitor and measure: ● How fast are we progressing? ● Do the key performance indicators reflect our expected outputs? ● Do our strategies drive the financial value that we had forecasted? Communication is key, across the organization. To be dynamic and evolve, the strategy must be understood, made relevant, and actualized by many people in the organization. Create a process so that the plan and the changes to the plan will make it in front of those that need it. This process should also include a way to enable contributions and measurement from the bottom up. The goal should be to enrich the plan with the content and ideas being driven by those in the organization with expertise in specific operational functions. Follow up and feedback is one of the most important aspects of bringing the plan alive. Without continuous feedback on how decisions are affecting outcomes, people will become disengaged and the dynamics of the plan, and the organization, will suffer. 4 www.davanticorp.com​
copyright© 2016 www.davanticorp.com A systemized approach to the follow up process was created by a US Air Force Colonel John Boyd. It was known as the ​
OODA loop1 ​
and refers to the decision cycle of ​
observe, orient, decide, and act. The basic concept is to focus on agility rather than raw power to deal with changing circumstances, opponents, or competitors. The key outcome from this stage: change management process that can manage changes to the strategic plan. 1
"What A Fighter Pilot Knows About Business: The OODA Loop ­ Forbes." 2013. 20 May. 2016 <​
http://www.forbes.com/sites/davidkwilliams/2013/02/19/what­a­fighter­pilot­knows­about­business­the­ooda
­loop/​
> 5 www.davanticorp.com​
copyright© 2016 www.davanticorp.com A quick reference summary: To actually implement an effective dynamic strategy means understanding that the strategy document is no longer static. It is a living, breathing, constantly evolving thing that is responding to inputs from outside and inside of the organization.​
To be successful, strategic management requires planning, communication, action, and execution. Start with Dynamic
Inputs
Make strategic decisions
and weigh risk
Execute despite
uncertainty
The context is the market in which the business operates. To understand the context, you must have access to past and current events. From this, trends can be determined. Once context is understood, it is possible to adequately weigh the risk. Strategic knowledge is a key input to this stage​
. Markets, technology, and competitors seem to be changing at exponential rates. Strategic intelligence is the key input to this stage. Understanding the market as it relates to your strategic plan will allow you to identify threats and opportunities that may require the plan to change. Strategic knowledge is a key output from this stage​
. When the risk is known, strategic decisions can be made that take risk into account. Strategic intelligence is a key output from this stage. With a solid understanding of the market context, plans can be developed and executed that account for risk­sensitive strategic decisions. Dynamic strategy is a key output from this stage. 6 www.davanticorp.com​
copyright© 2016 www.davanticorp.com I.
What is a dynamic strategy? A. Dynamic strategies involve three basic stages:2 1. Understanding the context­­dynamic inputs. 2. Making strategic decisions and weighing risk. 3. Executing despite uncertainty. B. Col. John Boyd Us Air Force, OODA Loop­­repeated process of observing, orienting, deciding, and acting. II.
When is it needed?3 A. When external or internal factors are changing­­which is all the time! B. When you are dealing with fast­changing conditions and heightened uncertainty. In these situations it demands that the org act with speed and flexibility. They can do so by taking an iterative, dynamic approach to strategic management. What value does it have?4 A. Dynamic strategy allows the org to recognize and react to threats. B. To seize new opportunities. C. To solidify competitive position. What problems does it solve?5 A. Missing strategic targets and objectives. B. Getting blind sided. C. Being left behind by competition. D. Making poor strategic decisions. E. Missing opportunities. III.
IV.
2
"Powerful new approach to strategy and business ... ­ Strategy Dynamics." 2010. 20 May. 2016 <​
http://www.strategydynamics.com/info/What­is­strategy­dynamics.aspx​
> 3
"Dynamic strategy implementation ­ Deloitte." 2016. 20 May. 2016 <​
http://www2.deloitte.com/content/dam/Deloitte/za/Documents/strategy/ZA_Thought­Leadership_Updated.p
df​
> 4
"Service Science Research, Strategy and Innovation: Dynamic Knowledge ..." 20 May. 2016 <​
https://books.google.com/books?id=dJm­xMFQwgUC&pg=PA181&lpg=PA181&dq=What+is+the+value+of
+dynamic+strategy+needed%3F&source=bl&ots=Dt8L8x4I1n&sig=sy2­fUCAOsVY1_TFc1MGMVeVfeo​
> 5
Winter, Sidney G. "Understanding dynamic capabilities." ​
Strategic management journal​
24.10 (2003): 991­995. 7 www.davanticorp.com​
copyright© 2016 www.davanticorp.com Useful Links
"A dynamic strategy for uncertain times ­ McKinsey & Company." 2014. 2 Feb. 2016 <​
http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/public%20sector/pdfs/mck%20on%20g
ovt/defense/mog_defense_strategy.ashx​
> "Leadership ­ Advanced Leadership Consulting." 2013. 2 Feb. 2016 <​
http://www.leadershipconsulting.com/user/image/robinson­what­you­cant­learn­at­harvard­online­booklet.p
df​
> Your Strategy Needs a Strategy ­ Harvard Business Review." 2014. 2 Feb. 2016 <​
https://hbr.org/2012/09/your­strategy­needs­a­strategy​
> "The New Dynamics of Competition ­ Harvard Business Review." 2014. 2 Feb. 2016 <​
https://hbr.org/2013/06/the­new­dynamics­of­competition​
> "Navigating the Dozens of Different Strategy Options." 2015. 2 Feb. 2016 <​
https://hbr.org/2015/06/navigating­the­dozens­of­different­strategy­options​
> "The Importance of a Dynamic Information ... ­ Forbes." 2014. 2 Feb. 2016 <​
http://www.forbes.com/sites/enriquedans/2014/07/15/the­importance­of­a­dynamic­information­manageme
nt­strategy­in­your­business/​
> 8 www.davanticorp.com​
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