Friday, June 24, 2011

Iterative Strategic development


Strategy defines the path for company’s progress for future; it indicates the directions and also how to achieve the ultimate goal. Needless to say that Strategy implementation is of utmost importance in an organization’s growth; it is of even more importance to continuously refine the strategy as and when required. Now this leads us to some very important questions. When should the strategy be modified or amended? How frequently should this be done? Whether it should be done often or only once in many years?
These important questions force us to verify the validity of age old traditional strategy development process wherein the strategies are formulated and updated annually by senior executives. The article “Should you build strategy like you build software” by Keith McFarland suggests that there is a need of new release of the strategic development model which will suit to the demands of the new era. The author mentions that the traditional software development model also underwent through similar introspection as this traditional approach of planning way ahead for future was failing to deliver the goods for the ever growing challenges of the modern world. The complexities and dynamics of the software development have changed very dramatically from the past and hence it needed to come up with a more robust approach to handle these. He draws an analogy between Software development and Strategy development by mentioning that both the approaches are challenged and are finding it difficult to prove their worth in modern era. However the author states that Strategic development has fallen behind Software development as the field of software development has come up with newer approaches to handle the complexities and is more adaptive in nature. He believes that Strategic development arena has failed to adapt to changing conditions and newer version has become a necessity now.
He tries to support this claim by mentioning that pressure to accelerate and at the same time cope with increased uncertainty and complexity has led to demise of software development as well as strategic development. He goes ahead and says that as the traditional Waterfall model for software development is not suitable in today’s fast world, the traditional strategic development too is not the most suitable approach for formulating the strategies. He firmly believes that the traditional strategic development process should undergo a transition and take over more adaptive and iterative nature. He feels that strategic development can take a nature similar to modern software development practices like iterative and agile processes and be less resistive to changes. He goes on to say that the newer strategic process should be iterative and adaptive in nature. He lays emphasis on replacing big design upfront with more frequent and compact strategy “scrums”. This will break the development cycle into shorter iterations. The belief here is that it is always better to devise basic set of strategic assumptions and get them into hands of strategy “customers” to enhance iteratively.
Another point of focus should be to involve both - doers and thinkers. This will spread a feeling of “ownership” across all the horizontals of the organization and hence all the stakeholders will strive to contribute effectively towards strategic development. Importantly, it will remove the executives off centre stage. With the increased participation from across different layers, comes finer scrutiny of strategic options. Refining the strategy continually would result in getting an optimal approach by removing any potholes.
Having said all that, the iterative model for strategic developments sounds like an attractive option. However there are some questions which should be answered first. Why hasn’t this adaptive nature become more prevalent in current industry? Are organizations reluctant to adapt an iterative model? Are they apprehensive about its implications and effectiveness? Why has it taken so long for current industry to realize the need for different options for strategic Developments?
I believe the adaptive and iterative strategic development has its own benefits and strengths but organizations should to study this approach thoroughly before adapting this approach. The impact of dynamic nature of strategy should be analysed. Answers to questions like –
1)      Will constant changes to strategy make their employees more confused about the strategic directions thereby making them less productive?
2)      How these constant changes are welcomed? Does the organization as a whole accept to such changing goals and directions?
3)      Are the senior executives willing to give up their authority by getting off the centre stage?
4)      Will it lead to instability in organization?

Though the “new release“of strategic planning model seems to be promising, we are yet to see the results of this on significant level. Only time will tell about the effectiveness and suitability of iterative strategy. 

1 comment:

  1. I think that an important question you are missing is how detailed and robust the strategy is to be made.

    As for the interaction between deliberate, actual and emergent strategy: in their book 'The Innovator's Solution' Christensen and Raynor provide a nice chapter on managing the strategy development process, including a section on when emergent (or iterative) strategy is effective and when deliberate strategy works best.

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