Future based Strategies Building Appreciate Intelligence

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Future based Strategies

Building Appreciate Intelligence

Why have we written this whitepaper? Because we want to give you new insights. The problem is never how to get the new innovative thoughts into our minds, however how to get the old ones out. Our culture doesn’t encourage us in business to imagine and to play. We need to unlearn in order to believe in possibilities and to see the unseen opportunities. We all know numerous products and services that would never have been introduced if we had followed the classic value chain starting with the process of needs identification. To foresight signals of change we have to leave our comfort zone. There are numerous events and trends in our business periphery, however in most organization accountability is missing to pull these into a coherent picture. What we need is intelligence-based business foresights in strategies.
Our strategy for the future is to make sure there is a future. We do not believe you can do today’s job with yesterday’s methods and be in business tomorrow. It’s about building appreciate intelligence as a new approach for successful strategy building.
Robert Masselink

Joseph H.A.M. Rodenberg

Summer 2009

Introduction: The traditional way of strategic planning

One of the most misused words in management today is the word “strategy”. In fact, most of us think that it means “important”. But that’s not what strategy is about. It also has nothing to do with being number one, desiring growth, having a vision or learning from and about a changing environment. Then what is strategy? Strategy is about the creation of economic value and choosing what not to do. It is about making unique choices and choosing differently from your competitors. Or, according to Michael Porter1:

Strategic planning does not guarantee strategic thinking. Most strategic planning efforts rely on historical data and numbers generated internally. The essence of formulating competitive strategies is relating a company to its environment.”

The traditional, and often used, framework of strategic planning consists of the following imperatives:

  1. Objectives are mostly based on internal and historical data;

  2. The majority of the strategy efforts in companies are developed by a small group of people who think for the rest of the organization;

  3. It is mainly driven by threats and opportunities coming from their industry sector;

  4. In most cases strategy development is a remote area approach or a calendar driven activity related to the yearly budget allocations;

  5. Often the necessary resources and sponsors to accomplish the objectives are lacking;

  6. In 90 percent of the cases management is unable to implement the new strategy successfully;

  7. Full responsibility for their accomplishments mostly fails.

Illustration: current framework of strategic planning
Many organizations develop their strategies according to this current framework. And most of the time, these strategies are not very effective. Goals are not attained and people not committed. How come? We think the foundations of the traditional strategy process have become obsolete and are not up to the task anymore to provide a clear direction that inspires organization members to commit themselves to the task ahead.
According to Michael Porter most organizations do not even have a strategy as many companies are driven by me-too lookalike strategies. So, management thinks they have a strategy which in fact isn’t so. This implies that the competitive positions of over 90 percent of companies are unclear from the perspective of customers.
The mother of questions in strategy development is: How does your organization realize a sustainable competitive advantage? To get the answer on this question we have to create the in depth insights in the current and future dynamics of our business environment, beyond the sector of industry in which the company acts. To create these in depth insights and foresights we have also have to link strategy development with competitive intelligence. This makes our new future strategies intelligence-based, driven by the changes of the dynamics in our external business environment creating maximum flexibility.

New strategic thinking

Given the radical changes in the competitive environment, the old models of strategy development are not up to the task of producing the types of strategy and strategic plans that will propel business forward in the rapidly evolving future. What we need is not another strategic planning model, but a strategic framework to effectively guide an organization through this complex process while engaging the whole organization. Key elements of this framework are foresights in identifying future opportunities, an innovative process and certainly core capabilities such as the capability to get to the future first. Such a framework will contribute to organizational effectiveness. This new strategic approach consists of four generic steps:

  1. Understand how competition is different from the past and from a strength based point of view;

  2. Gain insights in tomorrow’s opportunities;

  3. Energize an organization top-to-bottom to reach for vision and attain goals;

  4. Move towards a desired future.

This new strategic thinking, which we will call Strategic Futuring, creates a culture of ongoing strategic views, learning and leadership by building widespread appreciative intelligence (AI). What do we mean by that? Appreciative intelligence is the ability to see a breakthrough product, core competence, new technology or value solution in the future that is currently hidden in the present situation. Strategic Futuring is an effective and flexible tool that releases an organization’s energy, creativity and engagement in order to attain strategic breakthrough. It consists of the following characteristics:

  1. It focuses on the positive, to crowd out the negative;

  2. It builds organizational capabilities beyond existing boundaries;

  3. It strengthens relationships with partners, both internal and external;

  4. Input, and thereby buy-in, is obtained from all levels of the organization, not only from a few selected ‘experts’;

  5. The planning activity becomes a process rather than an event that connects values, vision and mission statements to objectives, strategies and execution;

  6. It creates a shared set of organizational values and vision that motivate people to get into action for a common preferable future.

Stepping outside the box

The ultimate goal of strategy development is finding a path towards sustainability. A sustainable organization is able to continuously anticipate the future and be responsive to the ever changing environment. It admits the fact that every organization is always evolving, growing, changing and transforming as a result of internal and external forces. These life giving forces never solidify but adapt continuously to new situations. The Strategic Futuring process stimulates organizations to develop new knowledge and acquire the necessary skills to inquire into the act of discovery, exploration, examination, investigation and research relevant topics, trends and developments. Innovation and self-renewal are only possible when the organization is willing to take its own successes, images and ‘truths’ under close scrutiny. How? By taking a different point of view, looking with the eyes of an outsider to itself, it’s products, markets and competition. By asking new questions which are unfamiliar, such as: “Do we, as a PC-company, compete with other IT-companies or do we compete with television producers, cinema’s, internet and telephone companies?” Or: “What is the customer’s appreciation of our reputation, products and quality service and what do they desire for the future?” By asking these kinds of questions, organizations develop new insights and foresights on which they can develop innovative actions. The anticipation a company has of its own future is the best security of its future success. The bolder the organization dares to dream about its future, the more likely it will achieve it, delivering appreciative value to its customers and ensure its competitive sustainability in the long run.

Strategic Futuring as a process

Strategic Futuring is a practical tool that can be used by corporate, divisional and business units or by (multi-)functional teams. Strategic Futuring goes beyond widely applied tools such as SWOT, scenario building and other, consists of the following drivers:

  1. The approach is strengths-based which means it develops strategy from existing strengths and qualities in the organization;

  2. It strengthens current identities by affirming what the organization is, what its living core is and where it wants to go;

  3. Market opportunities are transformed into a clear imagination of a preferable and commonly desired future;

  4. This future, as a clear and compelling organizational desire, is transformed into clear objectives, strategy and metrics in order to put emphasis on acting rather than talking.

Strategic Futuring moves from an “as is analysis” to a framework of leveraging strengths and opportunities to co-create both individual and organizational aspirations aimed at achieving measurable results. Its intention is to stay away from incremental progresses moving towards a major leap in performance. How? By looking for breakthrough movements towards the most preferred future. For this, shared dialogues about the reason for existence between organization members are necessary. Also, external stakeholders are often invited to participate in these dialogues. Many topics will and can be discussed, but the following are central in the Strategic Futuring approach:

  1. Understanding of the organization’s values and peak moments: “What has been working well in the past”;

  2. Questions about the core factors that give life to a particular organization and its wishes for the future;

  3. Reframing the environmental challenges into opportunities to place the organization in a proactive position leveraging its strengths, and if necessary, to acquire new strategic strengths; creating the appreciative intent to act on these values and images of the future in order to attain the desired results and effects.

  4. Creating the appreciative intent to act on these values and images of the future in order to attain the desired results and effects.

When you perform the Strategic Futuring process there are five steps to be taken. These steps can be executed in many different forms and have to be designed with a particular situation in mind. The whole process can be done within two days, but usually takes place within a period of 3-6 months. The consecutive steps are:

  1. Initiate the process:
    In the first phase the process is designed and all necessary success factors are taken into consideration. Key players are informed and involved and the SOAR-process is explained to them. The stage is set by communicating the strategic intention of the process and integrate SOAR, Strengths-Opportunities-Aspirations-Results, with existing strategic planning methods, processes and applications. As a result the desire to participate increases, because people start to see the connection between their contribution and the future success of the organization.

  2. Inquire into strengths:
    Data and information is gathered with an appreciative intent and meaning created by telling and exchanging stories about successes, peaks and best practices. All these stories have the ingredients for future success as they are collected, exchanged and appreciated. An appreciative inquiry is performed into values, mission, internal environment, strengths and external environment, opportunities and conversations regarding aspirations and results, as it is and as it might be;

  3. Imagine the opportunities:
    In this step a bold vision is developed of the desired future. Stakeholders are invited to challenge the status quo by envisioning the preferred future for the organization. They are asked to think on disruptive thoughts with the aim to create great possibilities for their organization. Vivid images make the vision concrete so it becomes clear where the organization is headed to. Personal and organizational values and interests intermingle into a shared set of images of the future which people want to achieve in the future. A creative dialogue on strengths and opportunities is the basis to consider aspirations and the most preferred future;

  4. Innovate to meet aspirations:
    In this step strategic initiatives are identified and prioritized to enact change to existing processes, systems, structures and culture. These changes are necessary in order to realise the preferred future of the organization. Clear statements are defined, called “Provocative Statements” that define the necessary changes. The images of the future become visible in change, initiatives have to be taken in order to fulfil the organization’s destiny;

  5. Inspire to achieve results:
    In the last step the commitment and energy is built for action. Plans are developed, resources allocated and responsibilities distributed in order to execute the vision. Continuous feedback is organized and leadership is executed in order to deliver results and to show successes. The is the inspiration for starting another round of inquiring into recent successes and into the strengths and qualities developed, thereby igniting the process up to a higher level.

Illustration: Strategic Futuring process

Why is Strategic Futuring so effective in real organizational life?

First of all, it is a relational process aimed at connecting people towards a shared purpose. The message to these people is that they are important for the future well being of the organization and that their opinions do make a difference. Also, it makes clear that an organization’s purpose only has power when stakeholders are committed to it. They show their commitments not only by the words they speak, but because of the actions they are willing to take in order to achieve that common purpose.

Secondly, it is highly affirmative in its nature. Organizations and people are appreciated because of their values, strengths and accomplishments. They are not regarded as ‘problems’ which have to be repaired or solved, because of its faults, weaknesses and failures. This thoroughly appreciative stance establishes a climate where people say what they want to say and do what they are willing to do. People stop to operate under the radar. They take responsibility for their words and actions, because they know they contribute to a larger purpose.
Thirdly, by bringing the ‘whole system in the same room’. Every relevant point of interest is taken into account into the strategic decisions that will be made. The system does not necessarily consist of employees only, but also have representatives of all stakeholders such as the supervisory board, unions, alliance partners, suppliers, customers, NGOs, government etc. Their points of view have to be taken into account. The outcome of this strategic process is a co-creation. It is a shared, attainable and often a provocative strategic direction and the result of a complex and dynamic inquiry process.
Fourth, the strategic direction is made actionable by developing clear objectives, strategies and metrics. Many strategies do not get implemented because they lack clarity on their outcomes, on the resources allocated to projects and programmes and on the steps which have to be taken into account by people with the authority to do so. It is an art, not only to develop a compelling strategy, but also to develop clear goals and metrics by which we know we have attained our purpose. The best indicator of strategic direction and future outcomes is an organization-wide look at what the organization is doing rather than what it is telling and what the strategic leaders are empowering their people at the execution level to accomplish.

However beautiful the strategy, you should occasionally look at the results.”

by Sir Winston Churchill

Finally, human systems contain life-giving forces which can be studied and must be understood in order to grow and flourish. How? By focusing on what is life giving, energizing, joyful and fun for a particular organization, by amplifying those qualities and by involving the whole organization in co-construction of its future. Traditionally, we tend to look for what is wrong in organizations and managers spend up to ninety percent of their time solving problems. This tendency leads to a scarcity-based view on organizations. For example, if we have ninety-five percent satisfied customers we tend to focus all of our attention on the remaining five percent unsatisfied customers. Thereby, we do not appreciate what we have achieved and we forget to care of our loyal customers. Strategic Futuring focuses on what is good, on what is working, on our strengths and on what we do well.

Levers for change

The Strategic Futuring process penetrates into three major corporate practices: strategizing, leadership and delivering customer value. These practices are closely connected to each other, because a well developed strategy is mandatory for guiding and inspiring employees and only engaged employees will deliver excellent customer value. The steps in the Strategic Futuring process are aimed at developing a vibrant, living strategy that is based on a thorough knowledge of the business environment and the strategic position of the company. This strategy will enable managers to exercise leadership by supporting their employees to fulfil their company’s destiny and to develop their capabilities. Companies who achieve their purpose will deliver excellent customer value, which is an answer to the question: “Did we fulfil or exceed your expectations as a customer?” The results based approach of Strategic Futuring is aimed at exactly doing this instead of reaching all kinds of internally focused targets. Let’s take a closer look at these levers.

Lever 1: Intelligence based strategizing

Successful strategy development is based on choices differently from your rivals. This means that management has to create insights and foresights in the current and future potential competitive drivers in the context of the dynamics of change in the business environment. This implies that we have to monitor the changes in our business environment on the key drivers of change every company is facing: markets, customers, competitors, technology and legislation. If management consistently creates a monitor or crows nest on these key five drivers of change they still might be surprised by events, but should never be taken by surprise. Everybody likes to have success in the future, however success in the future depends not just on a study of the future but on the future success of decisions taken today. Prepared decision makers can anticipate the development of many situations ahead of competition.

The most important decisions are not taken inside companies, but are taken outside companies”
To take better decisions we have to manage our data and information flows much better than we currently do. Most of the IT efforts are focused on the internal data and information flows within organizations. However, over 90 percent of organizations are not able to manage the data and information from the external business environment and will always be surprised because of this. They still have their internal focus. Success is not in measuring management performance, the KPIs, Balance Score Card and the other tools management likes because of having control. Success is in interpretation and putting information in the right context. Improved insights have three elements: first the way of collecting external data and the kind of information, second the way of analysing the information and third the people involved in the intelligence processes. According to Jim Collins in his book “Good to Great” one of the key successes in business is “to deliver intelligence that cannot be ignored”. Delivering this kind of intelligence means that we deliver actionable intelligence that is insightful and that provides managerial foresights.

Illustration: Enterprise intelligence, creating the intelligent and alert organisation

Actionable intelligence is in the top of the pyramid. That’s the reason why intelligence is created and not just collected, why it involves more than facts, what it means looking at the big picture, why it implies prediction and foresights, why it must engage the users, why it means good timing and precise delivery and finally why it is planned, executed, promoted and why it is an ongoing process.

Successful strategy development means that it is intelligence-based or competitive intelligence driven with just a simple objective: to strengthen the current and future competitive position of the organization. Competitive intelligence is the analytical and intellectual process that transforms disaggregated market, customer, competitor, supplier, technological and other key competitive data and information into relevant and usable strategic and actionable intelligence. Challenge is to deliver perspective beyond just facts. Focus is the key drivers of change every organization is facing. Finally the aim should be future oriented.
Lever 2: Executing leadership

The Strategic Futuring process strengthens the leadership capabilities in many ways and at many different levels. Why? Because leaders empower their people to achieve results based on a clear and compelling image of the future. These images contain a healthy stretch between a company’s current position and its desired state. People take their responsibilities because they receive support from their leaders who allocate time, resources and the necessary training and support to perform the tasks hands-on. Leaders and employees establish a psychological contract with each other based on intrinsic commitments to get the job done. The employees have developed self-discipline and do not need to be controlled by their managers. Timely information on performance and progress is at hand and is made available for everyone involved. On the basis of the feedback data provided they know what to do. Regular town hall meetings stimulate them to exchange experiences and to renew their energy, motivation and commitments on the basis of the progress achieved. During the Strategic Futuring process a considerable amount of attention will be spent on improving and executing leadership on all levels by means of training, development and/or individual support.

Changing behaviors always start at the top and will cascade down the organization by means of exemplary behavior alone, not words. Leaders will face some tough questions that mirror their current convictions and capabilities. It is impossible to engage or employees into strategy without becoming engaged leaders. Unluckily, most organizations are constructed so that most of the employees are asked to use only five to ten percent of their capacity at work. It is only when those same individuals go home that they can engage the other ninety to ninety-five percent. Leaders have to be able to recognize and employ that untapped ability that each individual brings to work everyday. Leadership means beginning to articulate and execute the management challenge of engaging the unique knowledge, skills and capabilities of each member of the organization.

Illustration: Changing management behaviors

Lever 3: Delivering customer value

Organizing need to regain their focus on their clients and customers and the values they offer to them. To much emphasis is put on goals and targets that do not serve the interests of end users but are directed at controlling the behaviors of the employees. All activities performed in organizations consists of work that adds value and waste. It is important to enlarge value added and eliminate waste. The Strategic Futuring process takes a good look at the added value for customers by asking questions such as: “Do we do the right things?” and “Did we fulfil our customer’s expectations?” Answering these kind of questions lead to major adjustments in the production process and protects organizations from doing the wrong things a little bit better.

The value of Strategic Futuring

The radical changes in the competitive environment of organizations means that the old model is not up to the task anymore of producing the types of strategy and strategic plans that will propel the business forward in the rapidly evolving future. Dozens of strategic planning models are available. However, what is now needed is a strategic thinking framework that connects people with the organizational purpose, open their minds and hearts, affirms their strengths and qualities and lifts their energies to make the desired future come true.

Appreciative intelligence based Strategic Futuring means that we have a framework at one’s disposal which enables organization’s stakeholders to see where they are today and establish a vision where they want to go. The strategic solution is the outcome of a co-creation process that identifies, understands and communicates both the individual and organizational values, the strategic direction (vision), the purpose (mission), the core and unique capabilities (internal analysis), the strategic opportunities (external analysis), strategies and tactics and finally the structures and systems. Its ultimate aim is to create a positive organizational environment that builds upon an organization’s core in order to sustain its unique value offering as well as its competitive edge in the long run.

We behave as if the Black Swan doesn’t exist: human nature is not

programmed for Black Swans.

For more information, contact:
Robbert Masselink, Director of Keynote Consultancy, +31.6.5389.0205, robbert@keynoteconsultancy.nl , www.keynoteconsultancy.nl
Joséph H.A.M. Rodenberg, Managing Partner of Rodenberg Tillman & Associates, +31.2153.6078, rodenberg@rodenberg.nl , www.rodenberg.nl
Copyright: This white paper is copyright protected and is provided for consultation purposes only. No electronic or other recording is permitted without prior permission of the authors. No transcript, hardcopy, CD or internet distribution is permitted.

1 Michael Porter, author of the two standard business books on competitive strategy: Competitive Strategy and Competitive Advantage. Michael Porter is professor at Harvard Business School.

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