Almost everyone working on a strategy for an organization is striving to quantify the strategy in a strategic plan. Strategic plans typically vary from 1–5 years, and five is far too long. However, a shift should occur from strategic plans to strategic responsiveness and action.
Strategic action calls for the ongoing assessment and recalibration of the value and impact of your organization’s primary initiatives. In the current and likely future environment of increased competition and pace of change, a strategic plan is just as likely to be out of date a month later than it is to represent strategic actions an organization should be making.
So, if a long-term strategic plan has lost its value, is it best to leave a void that plans once filled? Yes and no. Yes, organizations shouldn’t be intent on filling the direct void left by not having a strategic plan. Filling the void with a representative placeholder is even worse because it will serve a placebo strategic plan, making an organization feel better without any reason. The void left by needing a strategic plan should be filled with a better understanding, definition, and documentation of an organization’s foundational building blocks. At Simply Strategic, we call these keystones. An organization’s ability to embrace and act upon these building blocks matters more than having a long-term strategic plan. What an organization values, for instance, a keystone we call doctrines, is paramount to helping an organization determine why and how it wants to position and operate moving forward. On top of the foundational elements, however, organizations should be dynamic in the how.
There are keys to this new approach to strategy that values different things than a traditional strategic plan, including:
- Dynamic — Traditional strategic plans became more anchors than anything else. Strategic plans caused organizations to become tone-deaf to signals that were notifying an organization to do something different. A good strategy should always be about interpreting what is happening and balancing it with organizational values and objectives to adjust as often and as much as needed to win. The purpose of a strategy is to help an organization succeed on an ongoing basis. The only way to accomplish this is to be dynamic in mindset and action based on an honest assessment of internal and external factors affecting an organization’s ability to win.
- Action — Strategy does require analysis and thought to ensure decisions and directions are grounded in facts, but overanalyzing and overthinking in the realities of today’s environment can cause organizations to be predisposed to inordinately long periods to get to a strategic plan and then to create strategic plans that are chapter books when they could be a note in a bottle. Organizations must be much more adept at taking strategic action now and in the future.
- Flatter organizations — A more fluid and dynamic approach to strategy encourages flatter organizations because less management oversight is needed when not working from a long-term edict perspective. The more dynamic an organization is, the less time and need for people to manage up and down a hierarchy of approvals. Fast-moving organizations have a different appetite and culture for bureaucracy.
- Autonomy — Team members like working at more strategically responsive organizations because they get treated as professionals and adults who are given the latitude to ply their craft in a manner that gives them freedom of work and decision-making. Strategically responsive organizations are also more likely to help their team members experience the other pillars of positive work: mastery and purpose.
- Competitive Advantage — Strategically dynamic organizations have a competitive advantage over those that aren’t strategic or statically strategic. Organizations locked into an inflexibility around a long-term strategic plan are less competitive than competitors and react faster to changing markets and customer circumstances.
I saw a recent X by Dan Hockenmaier (@danhockenmaier) that summarized an interview by Jensen Huang of Nvidia. In the interview, Jensen references the dynamic nature of Nvidia and Dan summarizes as the following:
“Nvidia has no formal planning cycles.
- No 5 year plan, no 1 year plan
- Always re-evaluating based on changing business and market conditions (helpful when AI is developing at the pace that it is)
This org is optimized for (1) attracting amazing people, (2) keeping the team as small as it can be, and (3) allowing information to travel as quickly as possible.”
It is clear from the above that Jensen understands the value and benefit of being strategically responsive. Nvidia’s growth and current market value reflect this.
Is it hard to be strategically responsive and dynamic? Absolutely. Is it worth it? Absolutely. The most enduring organizations of the future won’t be the ones with the most steadfast, long-term plans. They will be organizations that believe with conviction in certain ideals and principles but are reactive and flexible in their operations. Assessing and redirecting is what we should be valuing around strategy, not a document that has, from the moment written, been low-value and mostly inconsequential.