In my last blog, I outlined a number of macro factors impacting organisations facing issues related to change, resilience and growth. In this blog, I consider some of the strategic aims and choices executive teams and boards are considering in a post-Covid context. And as a parallel, there is a well-used phrase in project management: “on a project there is time, cost and quality… but you can’t have all three… you need to choose”. The same can be true for strategy.
At the start of the pandemic many organisations understandably moved from a balanced position of driving monthly performance and planning for longer-term growth, to operating in much shorter time horizons, and focusing on immediate customer, colleague, and investor issues.
To some extent, many organisations have not yet come out of this operating rhythm as they have become used to the weekly management meeting cycle, and in some cases more frequent meetings!
However, as organisations do start to look ahead as we come to what we all hope will be the end of the current pandemic, executive teams and boards have several strategic choices to make. And like the project management saying… they will have to choose.
We are seeing organisations gravitate towards one of three strategic priorities: growth, performance and/or resilience; accepting that these may not be mutually exclusive:
Growth (New / Changed Business Models), the traditional rationale for a strategy review remains a key driver for many organisations, especially in market sectors experiencing strong customer demand, and where disruption and innovation are evident and creating new opportunities in the value chain; however, for some organisations it is not the current strategic priority.
Performance (Optimise Current Business Model) is driving the agenda in many organisations, especially given the material cost impact on people, raw materials, supply chain and other inflationary pressures, which look set to be with us for several months. The focus in this case is on customer proposition and portfolio effectiveness, operating model efficiency and margin management.
Resilience (Protect Current Business Model) and the focus on how best to insulate the organisation from future unexcepted material events has also become a more important executive and board topic over recent months. Whether that is through more effective portfolio management, removing concentration risk, developing financial strength, organisational agility or building scale and diversity.
The choices made by organisations reflect their business model, the market(s) they operate in, their risk appetite, financial strength, and their assessment of the new strategic landscape post Covid; assessing what has changed over the last couple of years and considerations about how the next couple of years will unfold.
We have also seen some organisations that operate a 3-years strategy cycle (rather than a rolling annual strategy with a 3-year planning horizon), and for these organisations there have been many significant changes since their strategy and change programme was established. For these organisations a fundamental review of the change agenda and strategy backdrop is highly recommended.
Future strategy development, by its very nature, operates in an ambiguous context, and this has been significantly amplified because of the pandemic. Established ‘certainties’ and expectations have become less certain and a broader range of outcomes is entirely possible.
As a result, market analysis, clarity and executive alignment regarding strategic aims and strategy options, supported by effective scenario planning, have all become even more important recently; whichever strategic priority dominates the agenda: growth, performance, or resilience.
Established in 2012, Whitecap Consulting is a regional strategy consultancy headquartered in Leeds, with offices in Manchester, Milton Keynes, Birmingham, Bristol and Newcastle. We typically work with boards, executives and investors of predominantly mid-sized organisations with a turnover of c£10m-£300m, helping clients analyse, develop and implement growth strategies. Also, we work with clients across a range of sectors including Financial Services, Technology, FinTech, Outsourcing, Consumer and Retail, Property, Healthcare, Higher Education, Logistics, Manufacturing and Professional Services, including Corporate Finance and PE.