The Strategility Method E-Book

Kerstin Pichel

• Herausgeber: Schäffer Poeschel
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 222

Veröffentlichungsjahr: 2024

Beschreibung

The toolbox shows how strategy content can be systematically developed in an agile, light-footed way and with the joy of experimentation. The team of authors explains how the advantages of agile methods can be utilised and how they can be combined with proven and familiar elements of conventional strategy development. Using many examples from different sectors and sizes of organisations and administrations, they show which approaches lead to success and which stumbling blocks you may encounter.

Leseprobe

Inhaltsverzeichnis

InhaltsverzeichnisHinweis zum UrheberrechtmyBook+ImpressumForeword1 Agility for Your strategy1.1 Your Use Case for Agile Strategy Development1.2 Mission, Vision, Strategy – Categorisation1.3 Our Strategility Method for Your Strategizing1.4 Strategility Flow and Framework – Overview1.5 The Tools1.6 Getting Started with Agile Strategizing1.7 The Potential of Strategility2 Strategility Method and Flow2.1 The Strategility Flow2.2 Storytelling in Strategizing2.3 Strategility Impact Indicators2.4 Risk Orientation: Creating Certainty2.5 Working in Iterations: Step-by-step Procedure2.6 Collaboration: Participating vs. Co-Deciding2.7 Steering2.7.1 Review & Planning Event2.7.2 Strategility Iteration2.7.3 Orientation in the Steering System2.7.4 Steering with the Strategility Board2.7.5 Linking Strategy Development3 Agility for Strategy Orientation3.1 Identify your Strategic Challenge3.2 Mission Statement and Strategic Options – Contents of Your Strategy Orientation3.3 Strategic Options – Responses to Strategic Challenges3.4 Details of the Strategy Orientation Process3.5 From Strategy Orientation to Strategy Development4 Agility for Strategy Development4.1 The Core: Strategies for Organisations and Administration4.2 The Start: Acknowledging the Strategic Challenge4.3 Develop Strategy Elements and Assumptions4.4 Testing Strategic Hypotheses4.5 Validate Strategic Hypotheses4.6 Transition to Implementation5 Agile Strategy Implementation5.1 Overview5.2 The Initialisation of Strategy Implementation5.3 Agile Implementation Controlling5.4 Prerequisites for Agile Strategy Implementation5.5 Methods for Strategy Implementation5.6 In-Depth Example: Strategy Implementation with the HERMES Project Management Method5.7 In-Depth Example: Strategy Implementation with the SAFe® Process Framework for Product Development5.8 In-Depth Example: Strategy Implementation with OKR6 The Strategy Team and its Roles6.1 Successful Collaboration is no Coincidence6.2 The Five Roles in Agile Strategizing6.2.1 Enabler and Strategy Owner6.2.2 Hypothesis Owner and Strategy Exploration Team6.2.3 Strategility Master6.3 Considerations on the Formation of the Strategy Team6.4 Roles and Events in the Strategy Process6.5 Understanding Roles and Conflicts6.6 Role Descriptions for the Practice7 Strategility Culture7.1 Operating Principles for Strategility7.2 Analysing Corporate Culture for Strategility7.3 Recommendations for Shaping the Strategility Culture8 Hypothesis-Based Decision-Making8.1 Deciding Wisely in the Face of Uncertainty8.2 Building Agreement in the Face of Uncertainty8.3 Hypothesis-Based Approach8.4 Make Assumptions8.5 Formulate Hypotheses8.6 Carrying out Experiments and Tests8.7 Gaining Insights and Making Decisions8.8 Working with the Hypothesis Test Canvas9 ConclusionBibliographyThe team of authorsIhre Online-Inhalte zum Buch: Exklusiv für Buchkäuferinnen und Buchkäufer!Stichwortverzeichnis

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Kerstin Pichel/Thomas Haas/Bernhard Kruschitz

The Strategility Method

1. Auflage, November 2024

© 2024 Schäffer-Poeschel Verlag für Wirtschaft · Steuern · Recht GmbH

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Foreword

Take a guess: in the past year, you have heard of more than a dozen companies that are now also becoming agile, and in at most one case, this involves the »agilisation« of strategic decision-making. Yet the unlikely pairing of rapid agility and long-term strategy has a lot of potential.

For many employees, the term «strategy« conjures up associations such as lengthy management meetings and years-long implementation initiatives with little chance of success. The agile world, on the other hand, promises autonomy for teams and the ability to quickly respond to changes in the environment.

That’s why we set out to learn from and with agile strategists. The following processes, tools, and examples are based on our experience, and have been developed as part of a research project called «Strategility«, funded by Innosuisse1. Since 2019, we have worked with more than 25 organisations to design, apply, reflect on, and further develop processes, tools, and roles of Agile Strategy Development, for example:

in consulting projects with corporations such as Migros, with administrations such as the Swiss Federal Tax Administration, with the management of the Canton of Zurich, the Zurich University of the Arts, the town of Buch SG, in the energy industry such as EW Buchs, with SMEs, in IT such as VSHN AG and internezzo ag, with communication agencies such as Valencia AG, and many others

in scientific work at companies such as SAP, Jobst Willers Engineering AG, and Scania Schweiz AG

in continuing education courses in strategy moderation at the ZHAW, Zurich University of Applied Sciences, in continuing education courses in agile organisations at the FHNW, University of Applied Sciences, and Arts Northwestern Switzerland, in our public courses for Strategility Masters with participants from consulting, administration, and business and in company-specific training courses

in the regular events of the Strategility Community, which now has over 100 members

These application experiences have confirmed that Agile Strategy Development improves the decision-making basis for development issues that are difficult to assess and can be combined with traditional strategy processes in administration and business.

This toolbox will give you an insight into how to systematically develop strategy content in an agile, nimble, and experimental way. It enables you to take advantage of agile methods and combine them with proven and familiar elements of conventional strategy development. Based on many examples from different industries and organisations and administrations of different sizes,2 you will learn which approaches lead to success and which stumbling blocks you may encounter. Some of our application experiences are for example that:

Organisations can and should adapt the processes and roles of the Strategility framework to their specific business situation. For example, in one international group all strategic hypotheses and tests were approved by the management, while in another the management was only involved in interpreting the outputs.

The explicit formulation of strategic hypotheses and the open-minded evaluation of corresponding tests are unfamiliar to many decision-making bodies. Get expert support with these steps at the beginning, then you will succeed after three to five applications without further assistance.

Review & Planning meetings should reflect information from all three Strategility processes in order to understand the strategic impact.

We recommend this toolbox to anyone involved in strategizing, regardless of their role in the organisation. We especially recommend it to those who want to organise a nimble and impact-oriented strategy process. We have created the role of the Strategility Master for them. If you have experience in Strategy Development and Implementation, you can use this toolbox to get started with Agile Strategy Development. A large number of templates and process descriptions – also available in the Digital Extras – enable you to get started immediately with Agile Strategy Development.

We would like to take this opportunity to thank our practice partners, the motivated Strategility Community, active users3 in practice and trained Strategility Masters for their agile development work on this toolbox and the inspiring exchange of experiences. They have brought this toolbox to life:

Niklas Elser, Peppino Giaritta, Christian Hauri, Mike Keller, Lars Diener-Kimmich, Theo Knaus, Cem Kulac, Lars Lange, Thomas Landis, Claudia Meier Waldvogel, Andreas Meier, Alexander Mestre, Adrian Rüegsegger, Jeannine Spozio, Corinne Staub, Goran Vitkovic, Miriam Walther, André Woodtli, Andrea Müller, David Andrist, Dorothée Braun, Adrian Müller, Urs Villiger, Monika Gerber, Nils Arnold, Andreas Kreis, Adrian Staudenmaier, Leandro Gianetti, Vjekoslav Bosnjak, Florian Fasel, Marco Fretz, Daniel Bachmann, Claude Waeber, Lukas Rentsch, Franziska Gabriel, Nadja Heeb, Jane Wakefield, Thomas Molitor, and Nicole Kopp.

We would also like to thank our families and partners from the bottom of our hearts. They have kept us flexible during the development of this toolbox:

Esther, Lena, Oliver; Lola, Ida, Markus; Eva, Jana, and Nina.

We look forward to continuing the lively exchange on Agile Strategy Development and therefore welcome your feedback and participation.

Agile Strategy Development and Implementation focuses the energy of your employees to the essentials and enables you to take overall control so that the strategy has the optimal impact on your organisation or administration. In doing so, you make a significant contribution to the future viability of your organisation.

1 Innosuisse is the Swiss Agency for Innovation Promotion. It promotes application-orientated research projects. www.innosuisse.ch/.

2 We use the terms ‹organisation and administration’ for companies in the private sector, NGOs, and public administration.

3 Gender-neutral language is used throughout this publication. The gender-neutral pronoun «they« has been used to ensure inclusivity. In instances where using «they« was not possible or would significantly impact readability, traditional gendered terms may be used.

1 Agility for Your strategy

1.1 Your Use Case for Agile Strategy Development

Uncertainty in Strategic Decisions

UncertaintyCould your corporate strategy need an update? Does the future direction of your organisation seem static and outdated? At the same time, strategic impulses are constantly emerging and should not and cannot «only« be dealt with in your standardised strategy retreat. In short, does agility in strategy development appeal to you? Then welcome! You are in good company.

AgilityAgility is finding its way into many business development processes. You can use agile working methods to add value not only in your functional areas such as IT, product development, and HR, but also in your strategizing, because Agile Strategy Development – which we call Strategility – enables you to,

create the best possible information base for uncertain decision-making situations;

continuously record strategic information and integrate it into your decisions;

increase your strategic response and implementation capability; and

build an appreciative bridge between agile and strategic practitioners.

We have applied and reflected on agile strategizing with more than 25 organisations and administrations. We would like to start by outlining an impressive example of a use case and the added value of Agile Strategy Development.Agile Strategy Development

Example

Agile Strategy Development Use Case

A company producing high-precision equipment for carbon analysis found itself in an initial situation where the global scientific market was largely saturated. In addition, new competitors were entering the market with new technologies. The company was in danger of losing growth, market power, and technological leadership. Changes in the customer segment and in product design were discussed. The company considered entering the new market of commercial production companies. The strategically important questions of what precision requirements and, above all, what operational requirements commercial customers would have were unresolved and the answers to these questions could not be determined analytically. The market was small and not described in industry reports, the product was new and customer response was unpredictable. However, the production of a carbon analyser took months, and the development and sales costs were in the five-figure range. A typical case for an agile approach to strategic decision-making.

Do you also find yourself in a situation characterised by uncertainty in which strategic decisions have to be made? Figure 1.1 provides you with a structure for your initial considerations – for a detailed description, see Chapter 2.2. Agile strategizing is particularly valuable if you do not know exactly which direction and strategy will lead your organisation to strategic success.

Fig. 1.1:

Uncertainty

Uncertainty

as a driver of agile strategizing

VUCA as the New Normal

Uncertainty is becoming increasingly important as a framework for strategic decisions. Beginning in the 1980s, after the Cold War and the dissolution of the bloc powers, and continuing through megatrends such as globalisation, resource scarcity, digitalisation, and artificial intelligence, uncertainty has increased in relation to effective strategic decisions. We are currently experiencing the uncertain consequences of global supply chain disruptions due to the Covid-19 pandemic and the war in Ukraine. However, it is not only the economy that is facing enormous challenges, but also governments, administrations, and the healthcare sector. These are summarised by the term VUCAVUCA world.

Figure 1.2 describes the challenges of VUCA and the corresponding responses.

Fig. 1.2:

VUCA – the challenge of time and the response

1.2 Mission, Vision, Strategy – Categorisation

What do we actually mean when we talk about strategy? The term «strategy« is often used, but rarely clearly defined. It is frequently used in very abstract terms as a «medium-term plan for the company’s development«. This makes it difficult to answer the question: Does your organisation have a strategy? But rest assured: your organisation does have a strategy – even if it may not be consciously or fully defined. Ideas about specific strategy elements often exist in the minds of different people in the organisation and are added together through discussions and decisions to form a medium-term plan for the organisation’s development.

Raising awareness of these strategy fragments and coordinating them with one another is worthwhile at the latest when the strategic development of your organisation is no longer progressing satisfactorily.

Strategy

A strategyStrategy is the definition of coordinated key activities. It defines the core areas of the organisation’s internal commitment for the next one to four years. The following strategy elements should be definedStrategy element:

Playing fields/arenas: Which products and services does the organisation offer to which customer groups in which geographical markets? What are the organisation’s core competencies and value chain?

Differentiation: What advantages does the organisation use to position itself against competitors and customers?

Vehicles: How does the organisation continue to develop itself?

Timing: What is the speed and pace of strategic development?

Economic logic: Which mode does an organisation choose to secure financial resources?

Strategic development often comes to a standstill if these focal points are not aligned with changes in the environment or in the company, or if they no longer fit together. For example, if the manufacturer of analytical instruments now focuses on quality management in the pharmaceutical industry, but continues to design its analytical instrument with complex analytical parameters that need to be adjusted individually, successful marketing is likely to be difficult. A coordinated strategy gives your organisation the strength to respond effectively to strategic challenges.

The five strategy elements outlined can be defined for three different organisational levels:

At the group or company level, the strategy defines the business areas in which an organisation operates and which of these will be the focus over the next one to four years. This decision forms the basis for the allocation of resources and investments. The intensity of the management role and the service activities of the company or group headquarters are also defined at this strategic level.

Decisions on competitive activities are made at the business unit level, for example on specific customer groups, service offerings, and service activities in the relevant market environment. These decisions should be aligned with any overarching Group or overall corporate strategy.

Functional strategies are defined at departmental level, such as marketing, purchasing or IT strategies. These strategies define the development priorities of areas within the organisation. They should also be competitive by focusing on the division’s customers and their needs, differentiating them from external providers or managing their economic logic.

Strategies represent one of several Strategy Orientation parametersStrategy Orientation parameter (see Figure 1.3). Today, strategies typically have a time horizon of two to four years. Strategic development priorities with a longer time horizon are described in more abstract orientation parameters such as the mission or vision. Strategic development priorities with a shorter time horizon are defined in more concrete guidelines such as project and action plans.

Fig. 1.3:

Strategy Orientation parameters

1.3 Our Strategility Method for Your Strategizing

In this toolbox, we introduce the Strategility method to help you deal with uncertainty in strategic decision-making situations.

Agile Strategy Development

Agile Strategy DevelopmentAgile Strategy Development – StrategilityStrategility – is an iterative, evidence-based and impact-oriented method of strategizing. It involves the relevant knowledge holders in developing and implementing the strategy in collaborative teams with a high degree of ownership.

StrategilityStrategility, Process overview is a process with a continuous flow of information and insights between three main activities: Strategy Orientation with fundamental directional decisions, evidence-based Strategy Development and impact-oriented Strategy Implementation (see Figure 1.4).

Fig. 1.4:

Strategility process overview

This process is based on five principlesStrategility, Paradigms that are consistently applied:

AlignmentStrategility principle, Alignment

Consistently base your strategic thinking and decisions on your organisation’s strategic challenge and direction. You define this in the mission, values, vision, and strategic option (see Chapter 3). The strategy definition itself can be your link between the long-term orientation and the short-term operational activities. You can use the strategy definition as a learning-based dovetailing of the two development horizons, thus promoting a constant strategic orientation – an alignment.

EvidenceStrategility principle, Evidence

Make your decisionsDecision-making conscientiously, explicitly, and rationally, based on the best information you can gather. If necessary, you should also work with hypotheses and tests for Strategy Development (see Chapters 4 and 8) – because every decision is based on assumptions. If you make these explicit and discuss them, you can consistently analyse the impact of your Strategy Implementation and use them as evidence for strategy evaluation (see Chapter 5).

IterationStrategility principle, Iteration

Design an iterative process in which strategic insights are deliberately generated and continually used for the evaluation of current and past assumptions and decisions (see the process overview in Chapter 2, as well as details in Chapters 3, 4, 5, and 8). As a result, strategic decisions remain rationally comprehensible while the initial implementation experiences are integrated.

CollaborationStrategility principle, Collaboration

Develop your basis for decision-making in a deliberate process with experts and decision-makers. This will enable you to gather as much information and interpretation as possible and to make the decisions that have been made or are still pending broadly comprehensible and actionable (see the explanations of the corresponding roles in Chapter 6). You can organise the necessary decision-making formats and processes in a company-specific way. The tasks, competencies, and responsibilities of the roles involved are then assigned according to your culture (see Strategility culture in Chapter 7).

AutonomyStrategility principle, Autonomy

Allow decision-making autonomy within defined guidelines to the people who will drive the hypotheses and tests forward and implement the strategy. This will save you from time-consuming approval processes (see the explanations on corresponding roles in Chapter 6 and on culture in Chapter 7).

These five principles serve to combine the different principles – or paradigms – of the two concepts of «strategic management« and «agility« in the Strategility process (see Figure 1.5).

Fig. 1.5:

Strategility combines paradigms from two concepts

The analytical approach of strategic management, with its alignment and cascading of responsibility for business development, is linked to the empirical approach of agility through the principles (see more detailed explanations in Chapter 7).

In the following chapters, we would like to explain the process design according to these principles as well as the content, sequence, roles, and tools of the Strategility process in more detail.

1.4 Strategility Flow and Framework – Overview

Do you want to accelerate the strategic development of your organisation? Would you like to be much further ahead, but the strategic alignment always takes longer than desired? At the same time, do you want to keep your strategic options open and be able to react immediately if necessary? The Strategility framework supports continuous strategizing and thus contributes to your ability to deal with change. The framework promotes:

Effectiveness – derive appropriate strategies thanks to a multidimensional basis for decision-making

Efficiency – achieve insights and impact faster

Flexibility – mitigate risks, change plans, change direction

The Strategility frameworkStrategility framework (see Figure 1.6) includes the following elements:

The Strategility flow representsthe core of the framework. It is used to methodically manage continuous strategizing with the three sub-processes of Strategy Orientation, Strategy Development, and Strategy Implementation.

Events for planning, controlling, and reviewing Strategy Development and its outputs.

Outputs

Strategic challenge

Mission statement

Strategic option

Key output strategy with strategy canvas

Business case and strategy roadmap

Roles with specific tasks and defined responsibilities

Tools for strategizing, including:

Strategy Orientation

Strategic challenge canvas

Strategility Board

Risk tower

Hypothesis and test canvas

Strategy canvas

Project canvas

Sequences of events

Principles

The StrategilityStrategility framework is based on the paradigms of agility and strategic management. The combination leads to:

impact- and risk-oriented decision-making through comprehensive strategic decision information

action-relevant decisions through implementation-oriented strategic hypotheses and tests

fast responsiveness through a constant flow of strategic information

The following case study illustrates agile strategizing:

Combining established and agile methods

Iterative way of working in interdisciplinary teams

Learning culture and evidence-based decisions

The case study outlines the Strategy Development over the course of two years, from the preparatory analysis of the Strategy Orientation (see Chapter 3) through five iterations of Strategy Development (see Chapter 4) to partial Strategy Implementation (see Chapter 5). The tasks of the individual roles are described in Chapter 6 and 7 addresses the culture. Hypothesis-driven work and experiments are described in Chapter 8.

Fig. 1.6:

The Strategility Framework

Example

Department Store – Challenge: Decline of Bricks-and-mortar Retailing

Strategic challengeStrategic challenge, Example:

Department stores are under pressure in stationary retail due to a variety of changes and influences, such as the trend towards online shopping and the minimalist lifestyle. A Swiss department store in the upmarket segment recognised the strategic challenge of securing its existence for the coming years despite these developments and decided to respond to declining sales figures. Based on analyses and studies of consumer behaviour, the management decided to embrace the sharing economy trend: Borrowing instead of buying – a radical idea for a department store.

This analysis of trends, market developments, consumer behaviour, and innovations in the retail sector around the world took around a year to complete. Other threats to bricks-and-mortar retail and trends, such as the digitalisation of the shopping experience through digital displays, AI-based shopping assistants, etc., were put on the back burner.

Strategic option:

Product developmentStrategic option. The central assumption is that consumers prefer to use goods over time rather than own them.

Initial strategy:

The rental of parts of the product range to existing customers in the existing stores.

No reliable strategy could be formulated using established conceptual-analytical methods of Strategy Development. Questions about the product range, customer segment, pricing models, processes, logistics, and prospects for success remained unanswered due to a lack of data and benchmarks. The strategic optionStrategic option (see Chapter 3.3) and the strategy were developed and validated iteratively over the course of a year. The work was designed to maximise knowledge gain. Strategy Orientation, Strategy Development, and Strategy Implementation were driven forward simultaneously. The following was carried out and discovered in iterations of two to three months each:

The field testField test

Who is interested in «borrowing instead of buying«?

In a shop, all non-food items could be borrowed instead of bought for two weeks – including underwear and toothpaste. To keep the process simple, borrowed goods were purchased at a normal shop checkout by project staff using a dedicated credit card and managed in Excel. The returns process consisted of a single point of contact for customer service.

The result: virtually nothing was borrowed. It was recognised that the more conservative and affluent clientele wanted to own goods and could afford to do so.

The pop-up storePop-up store

Do young, urban people behave differently?

For the follow-up experiment, a pop-up store with a specially created brand was operated in a trendy neighbourhood for two weeks. In addition to a small range of clothing, accessories, and furnishings, every item in the range could be rented from the pop-up store.

The result: Young women borrow expensive clothes.

The fake online shopsFake online shop

What is the right rental range?

In order to find the right rental range, several «fake online shops« were placed on the Internet, each with a very specific product range. The shops were advertised and their success measured using analytics. They were labelled as «fake online shops« because the ordering process was done by email and no other shop functionality was implemented.

The result: Handbags performed best.

The fake processFake process

Can you earn money by renting?

In the following iteration, the marketing of the rental service focused on handbags. The term «fake process« was used because each order was regularly purchased by a team member at a store checkout and delivered to the post office.

The result: In the foreseeable future, rentals would exceed sales and could be operated profitably.

The strategic decision

The results of the iterations, combined with market research and surveys, were used to formulate a sharing economy strategy with validated strategy elements.

1.5 The Tools

The Strategility frameworkStrategility framework, Tools framework provides you with a wide range of tools for strategizing. In addition to the images and illustrations in the book, you can download and use templates directly from our online materials, the Digital Extras.