Four-year strategic plans have become frustrating and useless. With the world changing so fast, strategic plans are outdated almost before they are completed. Business managers feel they are creating a fiction for planners rather than something useful. Four-year detailed static strategic planning also goes against agile principles. You should be learning and adapting continuously, not creating a static picture of the future and clinging to it.
At the same time strategy is more important than ever. With constant change, those who are able to anticipate change and position themselves are in for amazing value creation. This happens over and over again, as small startups and some insightful large corporates are swept to greatness by catching a wave that is obvious in hindsight. Apple with the iPod, iPhone, and iPad. Google with search, Android, and autonomous cars. Amazon with online retailing, marketplaces, cloud computing, and Alexa. Tech giants seem to have mastered the art of strategy in an ever-changing exponential tech world.
Tech giants use a new kind of strategy that allows responding with foresight and agility in the Age of Disruption. Contrary to traditional strategy it focuses on the very long term and the very short term, leaving the 3-5 year period of the traditional strategic plan out of focus. They Zoom Out to get strategic vision and then Zoom In to action.
Zoom Out. The world is going to change radically, so the slightly updated present doesn’t cut it. However, the human mind finds it very difficult to believe radical change in the short term. It is also practically impossible to predict a disruptive scenario accurately. So to picture yourself in radical change you need to look far out to the 10-20 year horizon and try to predict a high-level picture of what will be important then. Don’t do market sizes or growth rates. Do elements of customer value, technology impacts, visionary competitors and value chain disruptions. Based on that create potential scenarios for 2030 and take them to extremes, explore the limits of what is possible.
Zoom In. You need to learn by doing. Don’t launch three-year initiatives that avoid mistakes. Embrace quick mistakes that bring learning and allow you to converge as the future emerges. This means launching initiatives for the next 6 months. These initiatives will allow you to both learn and make progress, without reducing your flexibility as change emerges. The Zoom In process takes the 2030 scenarios and converts them to 6-month actions. Those actions will allow you to learn effectively and prepare for the next cycle.
Zoom Out Zoom In process. Deloitte has put together the bimodal strategy process proposed by John Hagel in the Center for the Edge with the traditional Monitor Scenario Planning methodology now led by Florian Klein in the Center for the Long View into the Zoom Out Zoom In process. This is a very practical methodology for taking a management team on an exploration journey that ends with an emotional commitment to a long-range vision and resource deployment to execute short-term actions to move towards it.
Zoom Out Zoom In Strategy Process by Monitor Deloitte
The process has 6 key stages structured around workshops with the management team:
- Explore. Executives are exposed to the exponential technologies that will have a significant impact on their industry by technologists and try them out.
- Reflect. Technology, customer invariants, visionary competitors, and disruptions are put together to select the givens and key uncertainties and build 2030 industry scenarios.
- Envision. Executives identify the vision for their company in the 2030 industry scenarios and what challenges their company will face to achieve it.
- Focus. Options for the most critical challenges that lead to 2030 are explored and prioritized. Eventually leading to select the ones that will allow most learning and progress in the next 6 months.
- Define. The most promising options are converted into 6 month initiatives. The core initiatives with clear plans and milestones. The edge initiatives with customer personas and minimum viable products. The shaping strategies with an ecosystem view.
- Mobilize. Selected initiatives are approved, resourced and officially launched by the management team.
Abandoning the false comfort of the 3-5 year horizon might seem scary. However, it makes sense for three important reasons:
- With your 10-20 year vision, you will get awareness, foresight, and action. You will be considering the impact of technology and competition strategically in your business. You will see those technologies you are radically missing out on. It will also get you to action; when we have done 2030 vision executives move to action.
- With the 6 months initiatives, you will get progress and learning. As startup CEOs often say, the only thing you know for sure is that your initial plan is wrong, but you can only fix it by start executing it and learning by doing. The same applies to large corporations, get going, learn what you don’t know and adjust course.
- Ignoring the 3-5 year horizon will protect you from the false sense of security it generates. Executives often use their strategic plans as a safety blanket against the stress of uncertainty, even if they know they are usually as good as made up numbers. Forcing yourself to face uncertainty will make you more aware of what is happening and bolder in terms of your actions.