When we emerge into a new normal, is your strategy fit for purpose?
Karen Thomas-Bland, founder at Seven, a business transformation consultancy based in London, recently lead a virtual session at the Chairman’s Network discussing:
How to ensure your strategy is fit for purpose, as we emerge at some point into a new normal.
How boards can maintain critical strategic oversight during the COVID-19 crisis.
Right now, organisations are not thinking about strategy. It’s about stabilising the current situation, maintaining continuity and ultimately creating a legacy of trust.
When organisations have the headroom to progress beyond stabilising and maintaining continuity they will likely start exploring medium-term challenges and ultimately transformative opportunities. As former White House chief of staff and Chicago mayor Rahm Emanuel famously said, ‘Never let a good crisis go to waste.’
There are likely to be three phases organisations will transition through (below), some ultimately not progressing beyond phase one.
Phase 1 — how do we stabilise and create a legacy of trust?
We are are managing a threat on a completely new scale with lots of uncertainties.
Solve by leading with purpose and trust, stabilise the current situation and maintain continuity, while managing the crisis.
- Safety and wellbeing of people.
- Creating psychological safety, remotely.
- Basic operations.
- Connectivity to customers.
- Financial sustainability.
- Scenario planning.
Phase 2 — what challenges and opportunities does it present?
We don’t know how long the crisis will last and hence need to start thinking about what the next stage might look like.
Set strategy to respond to medium-term challenges and opportunities.
- Transition and ramp up.
- M&A opportunities.
- Capital strategies for further downturns.
- Plans for ongoing crisis.
- Changing customer buying behaviours.
- Employee expectations.
- Innovation and change opportunities.
Phase 3 — how do we shape the new normal?
What might our businesses look like and what opportunities might this present?
Imagine the new normal by responding to transformative, long-term challenges and opportunities, requiring a new vision and strategy.
- What does the new world look like?
- Purpose and vision.
- Transformational opportunities e.g. digital leapfrog.
- Reshape business new normal.
- Changing customer buying behaviours.
- Build business resilience muscle.
We have the opportunity to shape a new normal and it’s the right time to ask if your strategy is likely still fit for purpose. This is the time to create a new purpose and vision for the future and a new narrative, which will require a review and refresh of an organisation’s strategy.
It’s important to:
Define how you’ll expand share and outperform the competition through and beyond the crisis e.g. customer intimacy investments.
Tap into a source of differentiated advantage, get granular on where to compete.
Consider if your customers will buy in the same way again and plan for a leapfrog change in behaviour e.g. acceleration to digital.
Consider how employees may have changed in terms of ways of working and expectations e.g. greater connection to purpose and meaning.
Prepare for bounce-back and recovery e.g. monitor macro trends, make selective investments (marketing for one).
Demonstrate a conviction to act and have the right resources allocated.
Use the COVID-19 crisis as a transformation opportunity to ensure business model, supply chain and employee base is fit to compete in the new world.
The risk, of course, is that boards are all consumed by the crisis, hoping to go back to where things were. Recently we have all seen examples of directors who can’t stand the heat intellectually and mentally.
We need strong board members to help the executive shape and refine the strategy, question and pressure test it and review it on a regular basis to test ongoing fit for purpose. It is highly recommended to use a framework to assess if you have effective board strategy oversight. The framework should consider whether there is:
A board composition comprising strong strategic skills.
Effective balance between short and long term, can quickly change course in a normal operating environment and in a crisis.
Quick recognition on what is a board matter and what is an operational matter, the chair to call out when board strays into operational territory.
A strong cadence for strategy, beyond an annual meeting, where strategy falls at the top of the agenda.
Strong flow of information from management to enable board members to make strategic decisions, to support challenge of assumptions.
Room for disruption conversations — could we be disrupted and are we potentially a disrupter?
Openness for innovative ideas to flow up the organisation to the board, we need to harness the creativity of everyone.
Alignment between strategy and compensation.
As we emerge out of the crisis the best organisations will ensure that their boards are best placed to help shape a new normal, recognising that if they don’t their competitors certainly will. They will ask if their strategy, purpose and narrative is still fit for purpose.
Based in London and with over 24 years’ global experience, Karen Thomas-Bland is often cited as one of the top business transformation and M&A integration consultants and coaches in the world. She is a trusted advisor to boards, executive teams and investors, having led complex, enterprise-wide turnarounds and integrations to $105bn turnover. She writes for many publications including The Times, FT, Association of MBAs and Management Today.