The traditional image of a leader is a person who points out the direction with his or her whole hand, and we gladly follow. Our inherent wish to follow is one of our strongest traits as humans. It is strictly programmed into our DNA since our capability of copying behavior has served us extremely well through evolution. – No more debating, let’s do this!
The goal of the traditional strategy process, run on a yearly or bi yearly basis, is to learn where to point. This is a process that never worked particularly well for organizations under transformation. No matter whether your transformation is planned due to a digitalization initiative or forced by rapidly changing customer demands. It’s an impossible task for even the smartest group of executives to plan for a future we know little about.
Sending your entire organization off in a slightly faulty direction is extremely expensive, and might jeopardize both income and brand. To build a strategy that is adaptable to rapidly changing surroundings, you have to build it as you go. We call this the Continuous Strategy Process.
Tugboats and pilot boats
We’ll use the freighter and the tug or pilot boat navigating a new harbor as our metaphor. Avoid the big freighter hitting reef by sending out tugboats as spearheads to recognize shallow waters. The tugboats help find a clear path for the big ship to navigate. This is how to succeed with transformational change in organizations also.
Disconnect a small team from everyday operations to test hypotheses regarding your strategy. Let them act as pilot boats that find a clear route to point out for your core business. By letting one or several small teams test potential ways forward you avoid sending the entire organization off in the wrong direction at a very small cost.
The tugboat and the freighter is a good visual metaphor for continuous strategy also. It is easy to understand how much they differ from each other just by looking at them. What the tugboat lacks in economy of scale, it gains in agility. When they try to do each others tasks they fail miserably. In parallel this is exactly what happens in business as well. Applying your usual way of doing business to the experimentation team will make them slow and inefficient (you can read more about that here).
Establishing the habit of experimentation
Instead you want your experimentation team to work hypothesis-based. The team state the hypotheses that have to be true for your proposed strategy to be a good idea. And they run experiments to test those hypotheses. Experiment by experiment, you will learn which is a safe route to navigate. You can start steering the entire organization away from the direction of falsified hypotheses, and toward the areas where the data you have collected from your experiments show a prolific future for your operation.
This article is part of a series about Continuous Strategy, the establishment of a process to continuously run small experiments to understand how to adapt your current core business to a changing environment. Whether it is brought on by your internal will to transform or forced by outside change. By quickly probing several ways forward in small scale, you learn which course you can safely point the freight ship toward.