Air Sandwich Anyone? Closing the gaps between strategy and delivery.
In my few years back working in NZ, I've encountered a common theme that repeatedly surfaces, across most sectors and industries. It’s something that I think plays on the minds of all CEOs, Strategy Leads and CIOs. I'm referring to the giant chasm that divides strategy and delivery - or as we call it here at Optimation, the air sandwich. Put in other words, our country’s businesses seem to be guilty of devising business vision, goals and strategies, then haphazardly launching straight into projects that don't deliver what was expected, or worse, fail to deliver at all.
When I started investigating the symptoms of continued poor project delivery, the usual suspects made an appearance to take the blame:
- The business requirements/scope keeps moving.
- Too many chiefs or decisions by a cast of hundreds
- Non existing programme/project plan
- Too many company politics/ private agendas
Digging deeper, it was clear that although some of the usual suspects existed, some very crucial and foundational elements to strategy execution appeared to missing in large quantities or all together:
- No translation of strategy into capabilities definitions (people, process, platforms)
- No future state or transitional view of the enterprise
- No understanding of the impact to the business
- No understanding of delivery capacity and capability required to implement, both internal and with partners
- No joined up view across business lines
- No understanding of strategic, tactical and BAU dependencies/priorities
- One-year outlooks
- No understanding of capability value realisation, immediate, transitional and long term
From this list alone, you can see a disaster in the making, a transformational typhoon tearing its way through progress, visions, budget and long term aspirations. Failed or stopped change programmes leave a legacy of deep scars and painful memories, often resulting in marching orders amongst other casualties. So you can see why executive teams are nervous when it comes to launching anything that has a whiff of transformation.
So the questions beg, do we actually need business strategies? And do we need transformation programmes to deliver them? The answer is...it depends. Are you really transforming and on-boarding new capability? If so, what impact is this is going to have on your business? Traditional business models for the most part have not changed, but advances in technologies and a new generation of consumers and behaviours are creating business model disrupters.
Good examples of this disruption are telecommunications, insurance, and banking, where the traditional business models will still exist, but they are being augmented and challenged by new permutations that extend and enhance the next generation operating models.
The telecommunications race to zero... traditional voice will always exists. Regardless of how this is achieved - over the copper wire to VOIP - the basic model is the same. However, the options are ever-wider, with the introduction of new generations of products and services (and low barrier-to-entry competitors). Younger, more agile companies are breaking into the market almost by accident and are chipping away at market share from the large corporates. VOIP has made it possible for global entrants to tap into the source and has forced all telecommunication companies’ primary revenue focus to be about fast data over various network options. Market disrupters include outfits like Skype, iChat, Google hangout, Whatsapps, and VOIP.
Insurance is another great local example. Life and Health have typically been dominated by a few local giants who have accomplished scale through acquisition, but who now find themselves slowly losing revenue and market position year on year. The giants became complacent because they didn’t have to try very hard to stay in front. Acquisitions saw revenues climb, but at the same time increased back office complexity dramatically, making any end-to-end changes timely and costly. Achieving simple things like linking policies to claims became difficult, such as which versions of the policy apply, and in which policy administration system? Again, smaller entrants are finding little resistance and entering the market with simpler, smarter products that are by-passing the Advisor channel, providing a cheaper product sold directly to a new emerging market of first time policy holders, both Partners Life and Kiwi Cover are local examples of little players making a splash.
For the banking industry, disruption is occurring on a more enterprise scale, as it’s more difficult for smaller players to enter the industry, especially when its peoples hard earned money at stake. The big game changing disrupters in this space are the Amazons, EBays, Trade Mes, Googles and one that may surprise you Online Gambling sites. I’m pretty certain that none of these companies intended to compete directly with the banks, but where you have large online companies with millions of users who already hold accounts balances into which they can debit, credit funds, who are transacting hundreds of thousands transactions per day – then in effect, operate as banks, just without the title (and regulation, I suspect). Disruption at this level is forcing most kiwi banks to really think hard about what they need to do to stay competitive.
In all three of these examples, the underlying business model has not essentially changed. But for NZ organisations looking to stay competitive over the short term (tactical) and long term (strategic) - while also keeping the lights on (Business As Usual) - then most will need to revisit their operating/capability models and really understand the change impact across people, process and platform. This key understanding is the meat, lettuce, tomato and dressing that transform our air sandwich into something that is indeed executable. These understandings are the ingredients in bridging strategy definition to delivery execution.
So circling back to my questions, do we need strategy? Yes we do! We need to know what the bigger picture is, what is the purpose and intent looking forward. We need to know what we're trying to achieve.
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”
― Sun Tzu, The Art of War.
Do we need transformation programmes? If we’re making changes at the business model or operating model level, it’s a simple YES, but the journey from defining strategy to standing up the first project is one that requires appropriate due diligence AND involves significant heavy lifting. The upfront effort spent performing research, analysis and modelling will be a fraction of the time and cost spent embarking on a new change programme, that can't track value, benefit and impact; ultimately resulting in another grave in the transformation programme grave yard!
At Optimation we're on a special diet of no nonsense, high intensity value-add. We know that Strategy Execution is a major problem facing most NZ companies, so we've been busy developing deep capability and appropriate models to address the problem. Our new wave of strategy consultants brings a combination of global and local market relevant skill sets. Also, this stuff is our bread and butter. We get it and we know how to make it happen, so check out our Optimation Consulting - Strategy Execution approach, we think you're going to like it.
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