TURNING STRATEGY ON ITS HEAD TO SUCCESSFULLY ADAPT TO CHANGE

The world has pretty well turned upside down this year, so it makes sense that some of our thinking about strategy needs to flip a bit too. Let me explain…

Traditional strategy takes what could be referred to as a ‘top down’ approach. It starts with the big picture – looking out to the ten year vision of what you want to achieve, then making predictions about what may happen over the next 3-5 years that could influence your business or industry, plus deciding what we want to make happen, and then drilling down from there. Eventually, businesses arrive at annual goals and quarterly (90 day) deliverables.

However, because of the changing landscape – the economic Armageddon we’re facing this year due to Covid, as well as the explosion of technology we’re seeing – to say that things are moving incredibly quickly is an understatement.

With everything that’s happening this year, lofty strategic planning has become more difficult. However, there is another way.

At the end of the day, strategy is about resource allocation – it defines what we focus on and give our resources towards. And it’s also possible to approach it from the bottom up. This perspective can help us to adapt to change more quickly, which we know is one of the key pillars of resilience.

So how do we take a bottom-up approach to strategy?

A bottom-up approach to strategy starts not with the big picture and future-focused predictions, but with where you are and what you’ve got right now. It starts with your resources. It’s a look at what you have now – in terms of people, skills and capabilities, and other assets – and what else you could be doing with them.

  • What moves could you make with the resources you have now?
  • What other markets could you be serving?

It’s the identification of latent capacity and capability – and it’s an opportunity, in this moment, to achieve greater financial security and potential growth.

Bottom-up strategy still looks at where you want to go; you need to have somewhere that you’re directing your resources towards, after all. However, it looks at where you want to get in the shorter term, and then what strategic moves you need to make to get there. However, bottom-up invites you to think more widely, or even to take a ‘start again’ perspective. Armed with the office, people, and skillsets that your business currently has, what would you do with them now if you were to start over?

While this is a worthwhile perspective to explore in this environment, this shouldn’t be taken as an invitation to abandon the activities that have worked for you until this point. It’s not about cutting off your nose to spite your face – but concurrently it is worth considering what else you could be doing with the stuff that you have. It’s about thinking laterally about what else you need to consider to feel like you can deploy your resources effectively.

This idea may make some business people uncomfortable; it flies in the face of what strategy has typically been. It could even appear tactical, and to some extent it is if you’re feeling forced to consider other options. However, it can also still be inherently strategic, especially as it can result in the uncovering of something genius.

Starting to flip your thinking

If you want to put a bottom-up strategy into action in your business, consider the following steps:

  • Start with a problem statement. Clearly define the problem that you want your strategy to solve.
  • Diagnose the situation and opportunity. What do you need to impact to see success now?
  • Look at your current resource allocation. What latent or under-utilised resources do you have that you can redeploy?
  • Get creative. Mind map all of the available options, with no limits to your thinking.
  • Consider what will govern your decision-making process. Obviously you won’t look to implement everything you’ve dreamed up, so how will you determine what makes the cut?
  • Define how you will measure success and determine progress, then commit to iterating your plan more frequently – increasing the cadence to meet the market’s rate of change.

Consider the case of a restaurant that’s now unable to open, but still looking for ways to generate revenue. What resources do they have available that they can use to do this? Their kitchen, a company car, their people, their premises. How will they decide what activities are meaningful? And how quickly can they iterate and make decisions? They need to look first at what impact they want to have and what gaps they need to plug. Then they can define the metrics for success – how will they know if what they are trying is working?

To unlock bottom-up thinking, you need shorter horizons and sped-up cadences. Not only does this require structure and process, it also takes a commitment to looking at things more regularly and frequently. That said, you also need creative thinking and a dose of entrepreneurial spirit – people prepared to push their thinking further, or advisors who will challenge the status quo when considering what you can do with the resources available.

The businesses that endure and thrive in this challenging environment will be those with resilience. It will be those that have great leadership and governance, a clear strategic direction, a highly engaged culture that is innovative and adaptive, and key relationships that provide options. The way we do business this year is different, but what hasn’t changed is the need for a clear, executable strategic plan. For many though, they need to go about this differently to take advantage of opportunities, go beyond business as usual, and achieve something exceptional.

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Topics: Blog, Business Strategy