Digital business moves so quickly that CIOs often find their tried-and-true methods of creating and updating strategy no longer applies. The pace of change renders priorities obsolete as customer needs shift, internal capabilities grow and competitive pressures mount.
“Organizations may find that their strategy is out-of-date as soon as it is published,” says Ian Cox, Senior Director Analyst, Gartner, “and they may delay creating or refreshing a strategy as they cannot afford — or justify — the time and resources required for such a large, one-off exercise.”
That tendency puts organizations at risk of investing time and resources in strategic priorities that are no longer relevant.
[swg_ad id=”29810″]
CIOs and other IT leaders need a new approach, one that enables them to adapt to changes as they happen without being overly reactive. The key is to:
- Monitor the business environment for changes.
- Cultivate feedback loops to capture ideas and insights.
- Respond quickly to changes by updating the strategy.
Monitor the business context for change
Monitor the business environment for relevant changes to a range of external and internal factors. It is not necessary to track everything. Instead, narrow down the issues you monitor to those most likely to affect your firm’s ability to realize its strategic goals. Focus on strategic assumptions, strategic issues and strategic triggers.
- Strategic assumptions: The explicit or implicit assumptions on which the strategy is based. Typical assumptions include the rate at which the sector is likely to grow, or the cost of major inputs. Assumptions are ideally phrased as measurable and time-bound. Those worded as “X will grow by 10% by Y” are easier to monitor for change.
- Strategic issues: Key trends or hot issues that could impact the business if they reach a tipping point. Issues could include pending legislation, a new market entrant that gains traction or a shift in public opinion.
- Strategic triggers: Events that challenge the strategy or prevent its execution. Examples of triggers include missing performance targets for multiple quarters or a merger between two competitors.
Monitor these assumptions, issues and triggers at a defined cadence, ideally monthly, to detect early signs of change. When any of these signs raises a red flag, it should prompt a strategy review.
Read more: Act Now to Fund Innovation and Growth
Establish feedback loops
Effective strategies form through feedback from the most senior IT executives all the way to frontline professionals in direct contact with the customer. Just as important are feedback loops across functional areas — from manufacturing to customer service, finance to legal. The loops ground strategy in the realities of how the work is done and what the customer needs. They also enable real-time information exchange related to the assumptions, issues and triggers.
For example, organizations that regularly monitor market activity may see that a new competitor hasn’t reached critical market penetration. If the sales team reports it’s losing deals en masse to the same competitor, however, it may be an early warning sign of change.
Respond fast
If the monitoring function highlights an issue, then revisit the strategy. Some changes will require minor tweaks or updates, but others may require more significant changes in the strategic direction.
Whether minor or substantial, changes in strategy need to be communicated so that the various functions can adjust. Leverage your feedback loops so that people at all levels of the organization know about the changes and why they took place.
The post Keep Business Strategy Current as Conditions Change appeared first on Smarter With Gartner.