People are coming to the end of their planning for the coming year. New mission and value statements have been prepared, strategic plans are completed, and tactical plans are being drawn up. Things are ready for the New Year.
But are they?
The problem is that the tools many have used to get ready for the New Year are suited more to good business practices from the 1980s rather than the turbulent and dynamic environment that characterizes business in the 2010s.
The concepts of a business plan or a strategic plan (as a single coherent document) – and many of the related tools we’ve become used to in our planning systems, such as mission and value statements – are based on an outmoded view of how the world operates and how we’re organized to create value.
Developed for the mass production systems of the industrial economy these tools are not well suited to the needs of organizations working in the modern knowledge economy. They were designed for an era of stability and (relatively) slow technological innovation. They were also designed for an era in which absolute size mattered – the bigger an organization the better. Greater size meant greater clout in the market, stronger purchasing power, and so on.
Size still matters in some respects – but not at the expense of agility. And, this is where the older systems are failing us.
The most successful companies in this economy are not necessarily large – though some are, note the absolute size of Google, Facebook, and Amazon – but what they are all good at is being agile. In fact, we’d go so far as to argue that nowadays in terms of value creation over time – agility rather than size is the more critical factor (more research is required though to be able to state this categorically).
Given that agility is a key – if not the key – characteristic of successful organizations in the early twenty-first century then we need to ensure that the techniques we use around planning and forecasting are geared to working with that understanding.
The problem with older ways of looking at planning is that, based on an underlying idea of stability, they’re not only ill-suited to the needs of modern organizations they can actually undermine the actual core needs of modern organizations – that is, their agility – as they were designed to operate in a system of stability.
What organizational leaders need to recognize is that:
Change is the new black! It is the normal mode of operation now.
Change is not something that happens once in a while as new technologies enter the market or commodity prices shift instead it is the new standard environment for all organizations. Change is now continuous.
What this means is that adaptability needs to be built into the standard operating practices of all organizations.
The reason that this is the case is that the external environment in which organizations are operating is shifting and changing at a pace never before seen. When we realize this, and acknowledge the fact that we’ve discussed before that:
Organizations are the answer to a question
then we see that one of the key points of focus in any organization is ensuring that everyone has a clear understanding of the question that the organization is answering. This is, how can your organization ensure that there is clear value that you’re creating in the world.
In fact, at a deeper level than this, there should be ongoing structured space for people within the organization (and outside too – as sometimes our external stakeholders have a clearer view of what we do, and how we do it, than we do) to re-look at whether the question that underpins your organization has been set up to answer is actually still relevant, or maybe needs to change. For after all, as the world changes so too the questions that people ask, and the problems that need to be solved, change too.
Returning to the original issue that we began this post with – you may have completed all your strategic planning and reviewing mission and value statements – but are you sure you’ve actually set yourself up to have your organization answer the question it ought to be answering? That is the value that is required in the world that you’re designed to provide. Or, instead, are you now just set up to answer the question that you used to answer – that might actually no longer be relevant to the market, your clients, and maybe even your employees…
We’re sure that Kodak had wonderfully robust planning processes set up – with accompanying mission and value statements – but the world moved on and they didn’t. The question they answered remained the same – even though the world of photography moved on. Kodak is just a recent salient example of the problems of utilizing outdated modes of planning and forecasting in an increasingly dynamic world.
In this respect then, a key practical consideration is that a question asked is a dynamic tool.
- How can the most efficient iOS-based messaging system be created?
- How can we reduce the incidence of malaria in children under the age of five in sub-Saharan Africa?
- How can clothing be used to optimize an athlete's performance?
A question invites re-thinking, movement, and agility. Mission statements, value statements, and the like, are, on the other hand – by their very nature – statements: static proclamations. Their ability to engage and provoke conversation is more limited – for after all it is a question asked that tends to be at the root of our better conversations, rather than just a statement made.
Questions promote conversation whereas statements promote acquiescence and agreement – with little space for dynamic engagement beyond their initial composition. And, it goes almost without saying, the more engagement we have in an organization the better for all - including the organization!
So too, the ways we present and convey this information – a strategic plan versus a strategic conversation, a business plan versus a business model canvas – can hold our ideas static and lock them in a form of stasis rather than allow the concepts underpinning our work to evolve and shift as the environment in which we work evolves and shifts. Or create the feeling amongst stakeholders - including employees - that their opinion matters. That their opinion is important for the organization.
The key takeaway for this post is you need to be clear about the reason that your organization was set up and continues to exist. That is:
What is the question that your organization was designed to answer?
Knowing this will help you and your entire organization develop a laser-like focus on what you do and how you do it. All your planning and futuring should always be based on, and return to, understanding what this question is. And, so too the structure and processes you utilize to do this need to be able to deal with the flexibility and dynamic character that this entails.
As a question asked and answered though we also need to be aware that the question may change over time. Indeed, the continual asking of the question, helps all stakeholders – external and internal – understand better what value it is that your organization creates in the world. And, it’s asking can even help you understand when the question is no longer relevant and where you may need to re-focus or change the question that you answer. We ought to learn from the experience of Kodak...
In our next post in this, our ‘Tools, Techniques, & Processes’ series, we’ll look at some of the techniques you can use in this approach to planning and forecasting to ensure that they match the dynamic and adaptable nature required for all successful modern organizations.
Images courtesy of: Pixabay