Why Strategy Is Important in a “Post” Covid World

In a great economy, you can get away without having a strategy. Strategy has always been important, but in today’s volatile, uncertain, complex, and ambiguous world, your company won’t survive without one. So why is strategy important?

You may have noticed that I started this piece with the acronym VUCA. VUCA stands for

Volatile

Uncertain

Complex

Ambiguous

Let’s drill down a bit deeper into this important acronym:

V = Volatility: the nature and dynamics of change, and the nature and speed of change forces and change catalysts.

U = Uncertainty: the lack of predictability, the prospects for surprise, and the sense of awareness and understanding of issues and events.

C = Complexity: the multiplex of forces, the confounding of issues, no cause-and-effect chain and confusion that surrounds organization.

A = Ambiguity: the haziness of reality, the potential for misreads, and the mixed meanings of conditions; cause-and-effect confusion.

We’ll explore VUCA in another article. For now, I want to introduce the term and how it’s linked to your strategy.

Having a strategy is about creating a framework to help make sense of a complex and rapidly changing world. While strategy and strategic thinking have their origins in the ancient Greek and Chinese world, more than ever, we need it now to make sure we successfully navigate the minefields on our path towards whatever goal you’re striving for. Great strategists such as Thucydides, Sun Tzu, Hannibal, Clausewitz, Patton, and John Boyd can teach us how to use strategy in our lives and businesses. Without a cohesive strategy, you’re like a rudderless ship at sea, left to the mercy of the ocean tides and how the winds are blowing.

Strategy is important because it means you’re being proactive, not reactive. Strategy is important because it means that you’re taking the time to be methodical about how you will achieve your objective. It forces you think in terms of observe your current situation and environment and gather information. To question your assumptions, to analyze them and then to take action. Having a strategy is important because it turns wishful thinking into a plan of attack. Daydreaming about where you want to be in 12 months or five years isn’t having a strategy. Having a strategy means you’re thinking deeply about your desired goal, and working backwards to create an action plan for achieving it.

Part of Sun Tzu’s genius in his book, the Art of War was in his recognition that life is fluid. It’s ever changing, and your strategy needs to also be fluid. It must change and adapt as your reality changes. If you don’t have a strategy in place, you will be bounced around like a ball in in a pin ball machine.

We now live in a world where a billion-dollar company can get knocked over by a small startup. Think what Tinder did to the dating websites like Match.com and eHarmony. Netflix has become the largest subscription video provider in the US, crushing cable and satellite. At one time Blockbuster Video, (remember them?) Back in 2000, they could have bought Netflix for $50 million! Netflix has a current valuation of $242 BILLION, yes that’s billion with a B. The CEO of Blockbuster at the time, John Antioco, thought that the idea of Netflix was a joke. The dotcom boom was crumbling, and Netflix was on the ropes, almost broke. Now if the Blockbuster CEO had but in place a rock solid strategy, they wouldn’t have gone bankrupt 10 years later. The lack of a cohesive strategy ended with 25,000 Blockbuster employees losing their jobs. If you’re a business owner, or in a leadership position for your organization, do you have a strategy, or merely budgetary planning?

Thrown in Uber, Lyft, AirBnB, and the flood of new startups every year. Now the question is, are you going to have a strategy that helps disrupt the world you play in, or are you going to be the one disrupted?

We’re living in historical times. Every morning when you wake up, you’re facing a pandemic, an economy that isn’t following historical norms, and civil unrest not seen in the US since the 1960’s. Ask yourself, do you think your organization can live through this without a top notch strategy?

Does your organization have a strategy to weather the chaos and uncertain world we live in?

Things are moving at warp speed now. And that new world requires that we make effective, fast and accurate strategic responses to the changes as they occur. If you have an MBA, you were probably taught standard conventional methods of planning and strategic execution. They most likely were formalized, stiff, time sucking, and had little effect on the real world, assuming they were even implemented. When things are changing fast, to be slow is to be wrong. If you’re trying to hit a baseball, it doesn’t matter how strong you are, nor how good your technique is if you swing the bat a tenth of a second too late, you’re going to strike out.

We live in a global world, but our relationships with our allies overseas, such as China is rapidly changing. If your supply chain depends on China, you may be in a world of hurt soon (if you aren’t already). If you compete against companies that keep lowering their prices while maintaining quality, you will lose market share. Amazon, Costco, Ikea, Southwest Airlines, and e-Trade, among others have eaten their competition’s lunch.

All of these current real world situations mean that there is extreme pressure on you and your organization to create and execute strategies at a break neck pace.

Remember, planning isn’t strategy. Traditional planning is about long studies, longer meetings, and analytical models in the hope that your staff can gather and analyze a mountain of information in a time frame short enough to be able to utilize the information.

Most companies do some sort of strategic planning at the beginning of their fiscal year. In most cases, it happens in January. Countless meetings are held, executives and stake holders jockey for position, and budget with one thing on their minds, bonuses, and promotions. Guess what, that world is DEAD! Strategy and strategic execution is a living breathing animal. It MUST become an integral part of your organization’s daily activity, or you will perish. Think about it, if some one told you at the beginning of 2020 that three months later most of the global population would be locked down at home by the end of March, you’d think they were high on drugs.

Planning is about setting budgets and budgetary goals. If you’re a business owner or a business unit leader, know that creating a budget is NOT the same thing as creating a strategy. First you create a strategy and THEN and only then you can allocate a budget to make that strategy happen.

If your organization actual creates a strategy and if they commit to it and put it in writing, the world is changing so fast that they’re creating a map to a world that may no longer exist by the time they’re ready to implement it.

Your strategy MUST be the foundation upon which everything else is based. Strategy, then strategic execution. You and your team, the stakeholders must work together to create a powerful strategy that is nimble and can be implemented in real time while being able to adjust as necessary.