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Strategy is dead. Long live Agile Strategy

Strategy consulting has a mixed reputation amongst execs: intelligent people…producing a lot of PowerPoint.  Lots of impressive analysis…but what changed in the business because of it?

At Oxbow Partners we believe that (traditional) strategy is dead.  Our Partners comprise three former senior industry executives who have all too often been on the receiving end of interesting but ineffective PowerPoint packs, and our two Partners with a consulting background have spent too many late nights writing them.  For this reason we have pioneered an approach called Agile Strategy, which we have been successfully deploying with clients since January.

(In this article strategy refers to change situations, for example building a new business or product, selecting a new policy admin system or implementing a new risk framework.)

Four reasons why traditional strategy is dead

We believe that there are four main reasons that traditional strategy often does not get results, all of which are addressed by our Agile approach.

1. Separating strategy and implementation kills momentum

Traditional strategy starts with a lengthy analysis phase, which culminates with the aforementioned doorstop presentation.  Some weeks after the strategy team completes its work, the exec meets and discusses a small subset of slides from the presentation, with the rest never seeing the light of day.  The project is signed off and moved to implementation.

In our experience, this does not work.  Separating strategy from implementation so strongly kills momentum.  The strategy team has been redeployed to their next assignment and the implementation team picks up a theoretical and lifeless handover pack.  The fizz is out of the project – and is often never regained.

2. Implementation team does not buy into strategy as not involved in its creation

The project is in implementation.  The implementation team flick through the handover pack and immediately find a dozen assumptions that they do not think will work.  The atmosphere is “us versus them”: the strategy team need to claim that the implementation team is defeatist to maintain credibility; the implementation team thinks the strategy team never think about the real world when writing their papers.

The implementation team think this could all be avoided: “we can provide helpful input if we’re brought into the process earlier – we tell them this every time.”  Because they feel like they’re being asked to do the impossible, they don’t feel like they own the strategy.  Again, there’s no fizz.

3. There’s “perfect failure”

A book that is often quoted in this blog is the Lean Startup by Eric Ries.  Ries defines a concept called “perfect failure”: a software developer building exactly what was asked of him only for everyone to find out at the end that nobody wants the thing that has been built.

Strategy is just as susceptible to “perfect failure” as software development, and never more so when strategy is separate from implementation.  Strategy should be an organic plan which continuously responds to new learnings, from both the company and the market.

4. The awkward reality of real life

Last but not least, strategy often fails because of the complexities of real life.  Do the CTO and the COO get on?  Do they have aligned objectives?  Is it really legitimate to assume that system A and system B will talk to each other…somehow?

These seemingly detailed issues are often ignored in strategy phases, but come back to bite businesses in time.

Agile strategy: It’s like sailing the oceans

We’ll talk about how agile strategy looks in more detail in a subsequent blog post.  In short, we like the analogy of a ship at sea.

Step 1: Point the ship in the right direction

Upfront strategy is absolutely necessary – but only to the extent of “pointing the ship in the right direction”.  Companies must ensure that they eliminate bad ideas and choose the best options; they do not need to chart the course for the whole journey before leaving port.  To use another analogy, this time from the military: “no battle plan survives contact with the enemy” so why plan for the second battle?

Step 2: Set sail as quickly as possible

It’s hard to get the ship moving.  We think creating change momentum is best achieved by removing the split between strategy and implementation.  Agile strategy achieves this by involving implementation people in strategy design and breaking long project phases into a series of short “execution sprints”, which ensure that concrete progress is made from the very start.

Step 3: Look ahead and adjust course regularly

Finally, who knows how the high seas will look?  What is the right course?  What is the most profitable destination?  Even the best strategy is at best a strong hypothesis: only the real learnings of implementation and market testing will prove whether it is correct or not – or how it must be refined.  Agile strategy recognises that strategy is an evolving hypothesis and encourages teams to work together to create the most value.

 

We have deployed our approach effectively for several clients.  We would be delighted to help you build better strategy and propositions with it soon.

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Chris Sandilands

Partner at Oxbow Partners
Chris Sandilands, ACII is a Partner at Oxbow Partners. Chris advises (re)insurers and brokers on a range of strategy topics and M&A. Chris started his career as a D&O underwriter at Munich Re, before joining Oliver Wyman, the consulting firm. You can reach him at csandilands@oxbowpartners.com.

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