Is Your Strategy Process Outdated? Bring it Back to Life With These 3 Steps

Strategy is certainly not meeting the expectations of today’s increasingly dynamic business environment: we need more strategies successfully implemented in less time. We also need strategy to anticipate and adapt to relentless change—to do this, it must be both continuous and transformational.

Three core principles—when combined—hold the key to making strategy relevant again.

“It’s one thing to create a startup around a powerful new idea, and quite another to motivate an existing organization to explore and embrace new opportunities. This is why strategic inspiration alone is not enough.”

1. Use future-focused—“future-in”strategic inspiration. Extrapolation from the present is ineffective in a fast-changing environment whipped along by technology. In the nineties, mapping the first human genome took more than a decade, at a cost of $3 billion, and today we are close to sequencing a genome for $1,000.[1]

It is important to see such powerful exponential drivers of change as crucial inspiration for imagining how we can create competitive advantage as we go forward. Direction setting through the lens of such strategic inspiration becomes an important new task for leadership.

Digital technologies provide an excellent example because their disruptiveness means that there is often simply nothing to extrapolate. Instead, we have to be inspired by what digital technologies can bring about, such as bringing supply and demand together at much more granular levels more quickly, and at much lower cost. Many businesses and startups have used this single idea as inspiration to start new business activities and create new business models.

For example, eBay revolutionized the ‘want ads’ business, which led to whole new channels for businesses to sell their products and services. Charles Schwab was a pioneer in online trading, allowing many more people to enjoy the excitement of actively investing. Even a single piece of future-in inspiration can represent a powerful source of strategic advancement. However, it’s one thing to create a startup around a powerful new idea, and quite another to motivate an existing organization to explore and embrace new opportunities. This is why strategic inspiration alone is not enough.

2. Engage the organization in strategy formulation. Shifting to future-in strategic inspiration for strategy formulation requires a different kind of capacity. This capacity can be created by engaging broader, more diverse parts of the organization to translate the most important drivers of change into competitive opportunities.

In doing so, benefits abound. The first-hand experiences in dealing with markets, customers, competitors, processes and suppliers are directly connected to the strategy formulation efforts, ensuring the output truly fits the culture and strengths of the organization. Beyond efficiency and effectiveness, this provides the organization with a truly transformational experience in realigning and strengthening a shared purpose and ensuring everyone is a committed owner of the results.

Company leadership can elevate beyond the day-to-day instructions and, instead, focus on helping their organizations become not only more future-aware, but anticipatory of the drivers of change they will need to adapt to in the future.

When P&G popularized open innovation 10 years ago through its “Connect & Develop” efforts, it acknowledged that it was simply not feasible to ensure that the best possible developers could be assigned to a specific innovation, or even that P&G actually employed them. Casting a much wider net across internal and external boundaries, and adopting a much more fluid and self-selecting approach, helped get more innovations to the market in less time and with less effort.

Although strategy is, of course, a more company-private affair, many leadership teams have decided that strategic challenges deserve to be addressed in the best possible way, just like innovation. Fortunately, the latest guise of social and collaborative tools allows organizations to do just that while maintaining a balance between inclusion and control. What’s more, it helps strategy to be turned into an ongoing process with the organization as a committed owner of its output.

3. Manage strategy as a portfolio of competitive opportunities. Competitive advantage has an increasingly brief life span, forcing us to devise more competitive opportunities and manage them on an ongoing life-cycle basis.

Instead of thinking of strategy as a single perfect plan with a multi-year deployment cycle, we need to manage it as a coherent portfolio of competitive opportunities. In this way, the firm’s activities stay aligned with its strategic goals and in step with dynamic business environments. is a good example of a company that has adopted a portfolio approach to competitive advantage. Amazon treats every single part of its value chain as potential businesses with growth opportunities, from selling books to consumers to selling the use of its server parks through Amazon Web Services to selling its e-commerce capabilities to other companies through Fulfillment by Amazon and MarketPlace. Amazon also pursues competitive advantage in many different dimensions, ensuring that what it pursues builds on its strengths. Amazon Prime is a growing customer service that leverages Amazon’s scale advantage in last-mile delivery and, simultaneously, the company is assessing how drones can take its delivery capability even further.

It is the combination of these core principles—future-in, engagement, and portfolio—that will restore strategy’s relevance. Future inspiration, when prudently selected, provides organizational engagement with the necessary guidance and focus to ensure relevant outcomes. Engagement, in turn, provides inspiration, with the necessary capacity to tackle the most challenging issues and opportunities holistically. It also paves the way for implementation. A portfolio of competitive opportunities allows the output of inspiration and inclusiveness to be turned into a guiding strategic framework for the entire organization—one that can be grown and maintained.



Johan is managing partner and chairman of the board of A.T. Kearney. He is the author of numerous articles and is co-author of The Future of Strategy, (McGraw-Hill, 2015) and Rebuilding the Corporate Genome (John Wiley & Sons, 2002). In 2013 he was named one of the "Top 25 Consultants" by Consulting magazine.”