By HPA COO and Partner Justin Moser
Reflecting on client engagements and strategy support this past year, a colleague suggested we write about agile strategy as the new description of effective strategic planning. Yet the word ‘agile’ feels inadequate, and it brings up many connotations in business (think iterative process sprints and software development).
To keep the emphasis on strategic planning, let us call it something more strident – Acrobatic Strategic Planning. There it is – one positive effect that evolved through the pandemic: the Acrobatic Strategic Planning capability, a more relevant, time-flexible approach to developing winning strategy.
As we’ve shared in foundational pieces like Four Principles for Strategic Planning, strategy is first and foremost about making choices around a company’s most critical go-forward imperatives, and then aligning its executive team and resourcing around those decisive imperatives. Only then will a strategic plan chart a path toward greater, sustainable profitability. Many firms (and their individual leaders) struggle to keep their teams doing the things that are most important to their strategy, and avoiding other activities that are less important.
And as we noted in How Strategy Development Changes in a Downturn, firms needed to fine-tune many of the parameters and ingredients in strategic planning as we entered the COVID crisis.
Yet if the entire premise of effective strategy is choice – honing in on at most 3-5 imperatives – how is that focus flexible, let alone acrobatic? Is clarity in choice and focus, which is such a struggle for most firms, now an impediment to more flexible and acrobatic strategy during volatility? For instance, if an industrial products company decides it will de-prioritize wholesale channels in its multi-year strategic plan, and rather rely more exclusively on its direct network, is that clarity helpful or hurtful when the world turns upside down and previous market assumptions unravel?
Paradoxically, that choice clarity is even more essential, and provides more acrobatic flexibility. Choice and imperative focus are the centerpiece, preparing firms for potential move accelerations when volatility accelerates. But the number of dimensions those clearly chosen imperatives apply to have now multiplied, over shorter cycles.
In 2020-21, fine-tuning firm strategy to reflect how past recession and global shocks shaped business cycles and timing felt insufficient. This crisis was more holistic, with regulatory, social, and employee wellness topics joining the more typical recessionary impacts on capital, customer demands, supply chains, and industry disruptions. Yet in a world with more variables, strategic imperatives took center stage.
What have we learned from making multi-dimensional, acrobatic strategic planning work? In answering this question, we still focus on at least the 18+ month vantage point, so as not to be confused with the many aspects of short-term crisis management or in-year business planning.
Key Success Factors in Acrobatic Strategic Planning:
- More aggressive timing adjustments to strategic plan imperatives:
Every strategic plan benefits from rich factbases, an understanding of technology innovation, and customer and competitive anticipation. Yet the evolution of the pandemic also meant a literal, fast-moving evolution of government policy, customer behavior, and supply chain and labor market optionality. There were two risks at play here: A) Letting month-to-month COVID crisis management and change ignore the strategic choices and 3-5 imperatives that were still central to sustainable gains over the next 18+ months, and B) Remaining firmly committed to one’s 3-5 medium-term imperatives, without some connection to the present crisis.
One example involved national restauranteurs, who were impacted by every short-term disruption imaginable. Yet for most of our restaurant clients, curbside and ‘delivery of the future’ digital transformations were part of their strategic imperatives, even before the crisis. For those with the resources to accelerate, the critical timing change was to frontload one’s next 2-3 year investments, to ensure preparedness and customer connectedness now. Those that entered with clear imperatives, and accelerated their execution well, saw market share gains previously anticipated in 2023 became 2021 reality. [The same applied in many other sectors. For instance, Nike prioritized and pursued its direct / owned DTC imperative for years, yet revamped its Consumer Direct Acceleration (CDA) and re-organized more aggressively around it.]
- Not only timing adjustments, but cadence adjustments to strategic plan prioritization decision-making:
Simply put, the 3-6 month strategic planning process was a luxury even before COVID. During the pandemic, it felt outdated.
Most of our clients benefited from ongoing, biweekly decision cadences within multi-level pods as they revisited and renewed their top 3-5 imperatives and corresponding 18+ month plans. These cadences included a collection of contiguous two-week strategy planning cycles, enabling leadership and multi-level involvement in the customer, competitive, and innovation pod discussions, and also ensuring more rapid decision-making around execution of the top imperatives, with quicker digestion of early data and insights around executional tests and wins.
- Learning and adaptation as strategy:
Adjusting the timing of strategic moves, with a more modular strategy cadence also required a central tenet of 2021+ strategy – learn and adapt. For instance, by making timing changes to ‘curbside of the future’ experiences, restauranteurs shaped the competitive environment more than in typical economic seasons. Educational technology firms measured what 100% virtual K-12 schooling looked like real-time, as administrators and teachers learned on the fly, and those that adapted quickly could make the right calls on where to accelerate select imperatives, and when to double-down on those imperative investments (see next section). And of course, data is now central to most firms’ strategic imperatives. Learning and adaptation are the value unlockers of this data.
- Strategic (and inorganic) investment beyond the timing adjustments:
Ignoring the frothy valuations of public offerings and COVID cash surpluses and deal making, another fundamental observation was that investments associated with one’s top 3-5 imperatives became even more central to firm resilience and success. Just as individual investors can achieve more during volatility, firms who were prepared gained more with its investments. A firm that has a clearer sense of its top 3-5 strategy imperatives coming into a crisis, is much more equipped to invest selectively yet aggressively in M&A and related activities during the crisis. One high-growth firm that provides home-based services entered the pandemic with a recently sharpened inorganic acquisition set of parameters, and was able to make multiple acquisitions in short time.
- Resilient leadership benefits from clear imperatives:
A proverb is engraved on our local city hall – “Where there is no vision, the people perish,” and one might apply that that principle here: Where there are not 3-5 clearly-understood strategic imperatives, a company struggles to rally its teams during crisis. Complicating factors, the recent crisis put greater pressure on the resilience and emotional intelligence of organizational leadership. Consultancies such as McKinsey have built up their toolbase around leadership adaptability, resilience, and energy reinforcement, with corresponding client surveys on mental health and resilience in the workplace. This is a holistic leadership challenge, both for leaders’ own psyches, and for that of their teams. And as part of this, without clear strategic imperatives (and their corresponding how we will win’s, and what we won’t do’s), a team will find energy erosion an even greater likelihood.
- Enhanced communications of the strategy choices, and why these choices ensure the firm will win:
Related to the above, corporate life breeds many distractions, both in external / competitive media, and within the firm. During a crisis, those distractions are infinitely greater. Team members more than ever needed to understand why the choice-driven imperatives demarcating what the company would and would NOT do to win, made sense in the immediate-term disruption.
In summary, strategic choice, and a firm’s corresponding top imperatives, provided not only necessary but greater advantage to strategically-prepared firms during COVID, no matter in what stage of activation those strategic plans may have found themselves. Yet the ongoing review and executions of those strategic imperatives necessitated a different level of timing adjustment, review cadence, learning and adaptation, investment planning, team resilience, and imperative communications.
This collection of success factors will ensure your commitment to strategic choice pays off in any business cycle.
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Justin Moser is COO and Partner at HighPoint Associates, a strategy consulting firm headquartered in El Segundo, CA. Previously, Justin served as Group CFO and SVP at Mattel, and headed its North American Online/Amazon Sales and Corporate Strategy teams. He began his career as a Consultant with Bain & Company.
