A.T. Kearney Helps Senior Executives Reclaim Strategy as Key Leadership Tool, Including in Times of Disruption
-- Strategy, the supreme discipline of management, has come into disrepute during the past two decades as it fails to cope with digitization, global crises, and other disruptions
-- While 80 percent of senior executives are satisfied with their strategies, 50 percent of middle management disagrees, citing their lack of involvement in strategy formulation as the reason for failure in execution
-- The Future of Strategy structures a new approach for turbulent times, turns strategies from plans on paper into ongoing organizational guidance
CHICAGO, May 26, 2015 /PRNewswire/ -- Agility has become the most recent mantra in management and is often seen as a substitute for long-term strategy in today's tumultuous business environment and rapidly shifting markets. When strategy and management consulting firm A.T. Kearney surveyed 2,000 executives and heads of strategy around the world, more than 80 percent put agility on a par with, or even above, strategy. This begs the question: Is strategy as we know it past its sell-by date?
The same study reveals that companies spend more time and effort formulating strategies but have less and less to show for their efforts: strategic cycles are shortening, strategies fail to meet expectations 50 percent of the time, and the problem is growing.
In a new book, The Future of Strategy: A Transformative Approach to Strategy for a World That Won't Stand Still (McGraw-Hill Education 2015), authors Johan Aurik, A.T. Kearney's managing partner and chairman of the board; Martin Fabel, A.T. Kearney partner and global head of the firm's strategy practice; and former A.T. Kearney partner Gillis Jonk tackle the issues with strategy as it is today, honing in on how to turn an overload of strategic opportunity and operational urgencies into a clear and actionable path forward. Their approach brings the whole organization into the strategy formulation process.
"It's no secret that the extrapolation-driven, ivory-tower, top-down process for creating strategy is broken," says Aurik. "Strategy today requires stepping over the shadows of one's own beliefs to capture new opportunities. But leaders of established firms can't simply tell the organization that some old assumptions, attitudes, habits, values, and practices that have made them successful have run their course and need to be altered or even replaced. Unless the hearts and minds of people in the organization are in sync with the strategy, it will not get off the ground."
"In fact, the design brief for strategy fit for this day and age is clear," adds Jonk. "We simply need more strategies successfully implemented in less time. We also need strategy to anticipate and adapt to relentless change. This means that strategy must be much more future-inspired, continuous, and truly transformational."
To find an answer, The Future of Strategy draws from the authors' most promising strategy work with clients, A.T. Kearney's own research, and the most recent academic thinking on strategy and organizational motivation. A key conclusion from this is that strategy should no longer be seen as an instruction from leadership to the organization but as a commonly shared sense of direction empowering the organization to make this happen. A practical way to achieve this is to blur the lines between strategy formulation and execution by engaging the organization much earlier in the strategy process. This not only facilitates drawing on the first-hand experience and expertise of the organization, but also makes the organization a committed owner of the outcomes. A second key conclusion is to look at strategy not as a single plan to be executed but as a portfolio of competitive opportunities managed on an ongoing basis, with the flexibility to stay aligned with external developments.
A.T. Kearney's approach to strategy, dubbed FutureProof, is a core methodology for carrying out strategic management at all levels of the organization, according to Fabel. It involves the synthesis of three powerful principles that, when combined, provide the means to reclaim strategy and turn it into ongoing organizational guidance:
- Draw inspiration from the future. Taking direct cues from fundamental trends that are affecting the company's future (as opposed to extrapolating from the present and the past).
- Be organizationally inclusive. Engaging people across the company early on to translate these cues into strategy and effectively eliminate the handover hurdle between formulation and execution, a major reason for strategy failure.
- Take a portfolio approach. Capturing the output as a portfolio of competitive opportunities and managing their life cycles—so that when some have run their course, others are ready to take over.
"On their own, each of these principles has clear advantages and they are about to massively change the way the strategy process is run today and how strategy functions work," comments Fabel. "Across our many clients globally we note an increasing demand in trend monitoring and scenario planning. More and more companies are minimizing the huge effort dedicated to strategic planning and instead try to emulate possible alternative futures." They do this by replacing their formerly rather secretive approach to strategy through broad inclusion, often by leveraging digital engagement and social communication tools. And when larger parts of the organization drive specific competitive opportunities, they better understand their very own contribution to the overall strategy, and a sense of purpose gets created. The combination of all three FutureProof principles, however, is where the power lies. "In essence, while strategy is reclaiming its supremacy, we notice a decline of strategic planning." As leaders embrace this new approach, "they will once again be able to look to the future, as uncertain as it is, with greater confidence about their organizations being able to meet the challenges head on."
For more information about The Future of Strategy: A Transformative Approach to Strategy for a World That Won't Stand Still, please go to: www.atkearney.com/books/the-future-of-strategy.
About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, please visit www.atkearney.com.
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SOURCE A.T. Kearney
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