Editorial
One of the classes I most looked forward to when working towards my MBA was a strategic planning class. What a disappointment. It ended up being a review of the entire MBA curriculum with a hint of planning layered on top. I sold the textbook back the minute the class was over. Years later, I read Michael Porter's book, "Competitive Strategy." His presentation of strategy excited me so much that I went back for a second master’s in strategic planning.
Business strategy today focusses on sensing signals faster and being able to better see around corners. But at a time when threats are coming from all places — not only from existing market participants — the question is how should planning take place now? While Porter’s "5 Competitive Forces" did consider threats from potential entrants, at the time the threats were severely discounted by scale and learning. In the digital era, the question has morphed to how enterprise leaders can drive the business agility needed to respond in time to digital disruptors.
The Horizon for Strategic Planning Grows Shorter
Strategic planning typically had a 3- to 5-year horizon, depending upon industry. Derek Abell’s 1979 book "Strategic Market Planning" defined a three-cycle enterprise planning approach:
- Develop Alternative Long-Range Business Definitions and Missions.
- Develop Long-Range Functional Strategies.
- Develop One-Year Plans and Budgets.
What do CIOs — today’s facilitators and implementers of strategy — think about today’s strategic planning horizon? In brief: it's a whole lot shorter. As CIO Martin Davis said, he “strongly believes that the rate of change of everything from business to technology, further driven by COVID-19, has shortened most companies planning horizons. The future is less certain than before the crisis.” Davis wasn't alone in his assessment. Former CIO Tim Crawford stated, “the strategic planning horizon has been reduced to 12-18 months. It is very hard to project 3-5 years due to the number of changing variables.”
While acknowledging some parts of business still require the longer planning horizon, former CIO Isaac Sacolick said the demands of digital transformation need to happen on a much shorter timeline. "I've seen many approaches to strategic planning, but most companies struggle to translate 3–5-year plans into execution. Planning on M&A, new markets, and global expansions still can require a 3+ year planning horizon, but transformation, innovation and operational efficiency should need to be accomplished over a shorter period. Transformations need to be planned and executed with 6–18-month horizons with 1–3-month release cycles. The problem with longer planning horizons is you need a feedback loop to realign priorities and to adjust to new opportunities to changing realities."
Many others shared Sacolick's assessment. As analyst Dion Hinchcliffe said, “the strategic planning windows can go out to about 18 months, but a year is becoming more standard. But what's allowed in a strategic plan has collapsed to be much shorter period, with items only 90 days away routinely taking place.” Former CIO Joanna Young also agreed, stating, “You can create strategic goals in 3–5-year horizon, but plans should be 12-18 months with a strong emphasis on prioritizing 1-5 initiatives or imperative. Strategy should be lightweight and metric-focused, in other words, 'grow market share by X%' or 'increase EBITDA by Y,' whereas plans should be near-term, implementable delivery that iteratively moves the strategic needle."
Anyone still holding on to long-term strategy plans would have been put to the test last year as CIO Deb Gildersleeve noted, “last year plus showed that you can have a strategy in place, but you have to adapt when disruption happens.” Or as CIO Paige Francis put it, “planning today should be semi-fluid.” CIOs therefore must be able to deliver over shorter timeframes to realize strategy achievement faster.
Related Article: Digital Transformation, Post COVID-19
How Do You Respond to Strategic Threats and Disruptors With Less Time?
In a world of constant flux, leaders must create strategies that are able to flex and adapt as necessary. As Crawford said, everything starts by leaders creating “a strategy that can evolve over time. Today’s business strategies should anticipate forward looking possibilities. Executing changes need to be nimbler and more responsive.” This means organizations need “to have resource time dedicated to constantly scanning of market and innovation opportunities. You can't respond or get out in front without ensuring people have this as part of their role,” said Young.
Organizations clearly need to put in place agile systems and processes that allow let them to not only adapt more quickly but to take stock of the big picture so they can make more informed and strategic decisions. CIO David Seidl’s organization has effectively created a seed fund “with a $50 million investment to do new things, take risks and focus on innovation and creativity. Now we're trying stuff out, learning lessons, and doing an ever-increasing volume of cool stuff.”
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While the need to take a step back and view the broader picture is clear, unfortunately, Young said, “too many senior people get sucked into operations or day-day project activities. Root causes include systemic under-resourcing or lack of business prioritization. This impedes achievement of business goals and erodes employee engagement. For this reason, Hinchcliffe suggested that “the most central pillar of agile is its ability to validate assumptions and design against reality in as short a time as possible. This includes fast feedback loops. This is what enables organizations to be ready to respond quickly.”
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An Agile Foundation Enables Responsiveness
CIOs believe that agile provides the foundation to respond faster to marketplace changes. Davis said, “organizations should build agility into an organization and stay aware of developments around it. Scenario planning of possible risks to your business and how you would respond helps. The other way to look at this is, how to develop your niche, specialty with digital capabilities that are not easily duplicated and protect yourself from disruption.”
Continuous agile planning is needed to respond to marketplace changes, said Sacolick, including frequent release cycles and the ability to determine lessons learned in an accelerated fashion. It is also important said CIO Aldo Ceccarelli, “not to become rigid in a business course or hypnotized by siren songs. Rather, organizations should embrace change and realize that sometimes the trade winds are spotted by the crew and not the first mate. By doing this, you stay relevant in an agile way.”
"An agile foundation allows you to reassess your priorities in shorter timeframes, which is beneficial when wanting to respond to marketplace changes. Having agile tools in your stack helps to create digital solutions in hours and days instead of weeks and months,” said Gildersleeve, a sentiment Paige Francis agreed with by saying, “by design it makes it easier to rapidly pivot and change.”
14 Things to Put in Place to Achieve Organizational Agility
Saying you should be agile and becoming agile are two different things. Below are recommendations for moving from agile theory to agile reality.
- The ability to recognize, tolerate and perhaps even celebrate failures and mistakes.
- Resources to kill legacy things and other drains on agility.
- Staff who are empowered at all levels, and ways to recognize improvements.
- Transparent, inclusive, accessible collaboration tools and processes in which leaders regularly participate.
- Agile culture that can change and adapt.
- The ability to layer on top a culture of change, critical thinking and looking for better ways to do things.
- Ability to deliver incremental value regularly and often.
- Management that empowers multidisciplinary teams to very rapidly make decisions based on the results of recently delivered value.
- Creative processes that gather and use lessons learned as quickly as possible.
- Innovation vs. a safety and risk mitigation mindset.
- A supportive company culture that’s primed for innovation and change.
- Technology and tools that let business users create their own solutions and governance practices, so employees are working within IT guardrails.
- Investment in employees’ skills (both upskilling and reskilling).
- Champions within the organization both from a leadership and peer-to-peer level.
Steps New CIOs Should Take to Blunt an Attack From Digital Disruptor
Without a doubt, Sacolick said this is “a tough situation for the CIO when in the early days of a new role that requires learning and relationship building with executives, while disruption requires shock and awe that leads to action. CIOs must, at the same time, pick the right battles and most important, get IT responsive, agile and moving fast.” However, Hinchcliffe said a “CIO truly facing disruption must soon take action in rough proportion to the scale of the threat.” Ceccarelli said, “Sometimes a clear message to the business can be disruptive. CIOs need to become the center of yes in their organization, putting the skills and resources of IT to work on disruptive business initiatives to be followed and go viral among business functions.”
At the same time, Young said “CIOs need to mobilize agile digital troops, cloud-based quickly configurable tools, ideally no-code that can increase your digital capabilities. CIOs should also check in with the people of whom greater agility is being asked. And remember that no framework or tool will compensate for insufficient resources or conflicting priorities.” With resources, Davis said “CIOs should mobilize agile digital troops, cloud-based quickly configurable tools, ideally no-code that can increase digital capabilities.” Finally, Francis said ”hopefully a new CIO walked in with support and buy-in.”
Does Your Strategy Give You a Right to Win?
Strategic planning has clearly changed since I took my second masters. Today, it is built upon agile concepts and runs over a shorter window of opportunity. With these, success comes down to relationships. Today’s businesses are counting on the CIO to create their businesses go forward "right to win."
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