Strategy as design, not problem-solving
At Implement Consulting Group, we recently co-hosted a strategy session with Roger Martin in New York. It was designed as a “learning lab” that brought together executives from some of the largest US and Scandinavian companies to discuss how to rethink and improve the way that companies make strategic choices.
Present at the session were strategy executives from e.g. Procter & Gamble, American Express, Verizon and Target as well as Novozymes, Pandora, Stora Enso and Maersk Line.
Apart from the fantastic venue and the really great people who were brought together – the most notable fact was that many of these big global companies are already quietly making a rather fundamental shift in the way they approach and perceive strategy.
In essence, these companies are shifting from thinking of strategy as a problem-solving exercise – to viewing it as a design challenge. They acknowledge that in dynamic competitive environments the right strategy is not something you can figure out by just thinking hard and crunching enough data. Instead, strategy is about shortening your odds of success by applying a design-thinking mindset.
With this view on strategy, the #1 tool in the strategy tool box becomes prototyping (Harvard Business Review - Strategy Is Iterative Prototyping).
The approach can best be described through an illustrative example from one of the companies we work with. This company faces a fairly classic strategic issue. Growth in developed countries is stagnating, so they look increasingly to emerging markets. However, their high-end value proposition makes it difficult for them to gain a fair share of emerging markets where the demand for mid/low-end products is dominating. So their key strategic issue can be framed somewhat like this: “How might we gain a fair share of emerging markets while not diluting our high-end value proposition?”
To address this issue, they initially developed multiple options using both analytical and intuitive insights. Then they iteratively challenged, tweaked, discarded and adjusted the options – ultimately boiling them down to two fundamental prototypes:
When they had described the prototypes in sufficient detail, they took a step back, and for each of them asked the fundamental question:
What would have to be true for this to be a great solution?
For each of the prototypes, they could list a number of key conditions – e.g. that the market would grow by a certain pace, that cannibalisation could be prevented, that competitors would react in a certain way, that channels and customers would value specific things or that they could build a certain set of internal capabilities.
By listing these conditions, they outlined the logic of each prototype – which then enabled them to subsequently direct their analyses at the few things that turned out to be most critical for them to make a choice.
Approaching strategy as design rather than problem-solving holds a number of advantages. One is that it forces you to truly explore options before making a choice – considering functional requirements, feasibility, capabilities as well as market assumptions. Another is that it reinforces choice through a deliberate development of more than one attractive option that can resolve the given strategic issue.
The foundation of this approach to strategy was coined by Roger Martin and A.G. Lafley in their 2013 bestselling book “Playing to Win”. Having applied it for a number of years through our partnership with Roger Martin, we have seen it work as a more intuitive, more fun and more effective way of making critical strategic choices.
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