Tuesday, April 25, 2017

Bringing Science to The Art of Strategy

One of the most important reasons for conventional strategy planning to be less productive or unsuccessful is that it is not scientific. Although it includes rigorous analysis, it lacks creating new hypothesis or possibilities and careful testing of these possibilities. The paper discusses seven steps through which one can make strategy planning scientific.

Step1: Moving from Issues to Choice:
Instead of spending hours on analyzing why we ended up in the current issue, a company needs to focus on looking at it as a choice to be made and identify two mutually exclusive options that could resolve the issue. Or to put it in simpler words “how can we move forward from here?”. This is not something specific to a company, this could be applied to any issue that we face in our day to day life. For a student who faces with an issue of getting a bad mid-term grade, it would be two choices either to drop the course or perform better in the second-half to improve the grades.

Step2: Generate Strategic Possibilities:
After deciding that a choice has to be made, the next step is to generate new and innovative strategic possibilities. Although it is not required that these possibilities lay out the exact details as to how they could lead the company to the desired output or success, they should consider the advantage they can leverage, scope across which these advantages are applied and activities required to achieve the desired output. These help in further validating the possibility. It is important not to kill the possibility at this stage, without further testing it.

Step 3 Specify the conditions for Success:
Imagine that you are faced with an issue of missing a project deadline, one of the possibilities is to work over the weekend to meet the dead line. The purpose of this step is to specify the condition that “you will be free over the weekend to finish the task”. It is not to justify or to validate "if you would be free over the weekend". During this step, a list of conditions that should be true for the possibility to succeed is made and it is constantly refined, if member disagrees, then existing conditions are removed or new ones are added to the list until a total agreement of the list of conditions is reached.

Step 4 Identify the Barriers to Choice:
Which of these conditions has the highest possibility to fail? This represents the biggest barrier to the choice and is highly likely to fail. At the end of this step the team has a list of barriers, two to three which the team is highly concerned for every possibility.

Step 5: Design Tests for the Barrier Conditions:
The member who is most skeptical about a given condition should take the lead in designing and applying the test for it. This person will typically have the highest standard of proof; if she is satisfied that the condition has passed the test

Step 6 and Step 7:
These involve running the tests and analyzing the results to find the possibility with the least serious barriers. The advantage of the possibility based approach is that the choosing the strategy becomes much simpler and it considers all the concerns form every team member. If properly done the last step is just agreeing that among the existing possibilities this is the best one based on these results.

In a conventional strategy development meeting, almost all the above steps are mixed in confusing way into the final stage. Some team members are left disappointed that their views are not considered or sometimes the whole process must be repeated because someone identifies a potential barrier at the end which makes it less likely to be productive. By following the above steps, one can make the process of strategy development scientific and successful.

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