When most organisations build their business plan, it’s a very linear process. Typically, the CEO will lay down the 3-5-year vision, and the senior leadership team will help plan the tactics that will get the business there.
But as the pandemic has shown us, our world is very volatile and market conditions can literally change overnight and be totally out of your control. Furthermore, the barriers to entry are very low today. Digital has made it very simple and cost-effective to establish and grow a business. This means at any moment a new entrant to the market could blind-side you and take the advantage — just think about how Airbnb, Uber, BrewDog, Stripe and Starling have gained traction very quickly in their respective markets.
So when your whole business could be disrupted within the next 3-months, is it even possible to plan for 3-years’ time?
An emergent strategy keeps your business agile
Emergent strategy is an ethos we encourage our clients to think about. In some ways, it’s very similar to military tactics, where you know the end point, but need to deploy different tactics to overcome different obstacles and tackle new challenges as they arise. It’s very much an iterative process where the business continuously learns from what did/didn’t work before taking each new step.
So what are the foundations of emergent strategy?
Step 1: understand your customers
Because you really need to get under their skin, you can only truly understand your customer by using data and analytics.
The good news is that today every company is a data company. Every system, application and platform we use capture valuable insights about who people are and their behaviours, which means getting hold of the data you need is very simple.
The bad news is that the dynamics of modern business are driven by digital. Customers are no longer judging you against your nearest competitor, but by the best digital experience they’ve ever had. In reality, that means that you’re now competing against exemplar companies like Netflix, Amazon, and Disney+. It’s their service that has become the baseline expectation for the digital experience, which means everyone’s standards — regardless of what sector you operate in — has to be higher. According to research by Smart Insights, 79% of marketers say the primary objective for their customer experience strategy is to improve customer retention/satisfaction.
And the news you perhaps don’t want to hear…
You can’t bury your head in the sand when it comes to new social platform like Snapchat and TikTok.
Take a moment to think about how you use your phone to communicate with people. There’s a good chance you’ll call them or send an email. At S&S we have closed groups to communicate with members of The Change Society. But you aren’t your customer and the next demographic of consumer is very different.
Gen Z already accounts for nearly a third (32%) of the world’s population. So think about how your children use their phones. They’re not texting their friends, they’re sending quick Snapchat messages or mini videos through TikTok. The way they use technology is very different, and their expectation will be to communicate with companies through these channels.
Providing help and support through a channel like TikTok is perhaps something you’d never even considered before. But if you fail to adapt and keep pace with the market demands, you’ll find yourself on the road to ruin. Just take a look at some of the casualties of COVID: Addison Lee, Boots, Burger King, Cineworld, Debenhams, HSBC, National Trust…
Step 2: understand your talent
As well as being your new customers, it’s likely that Gen Z will become your new employees now that the eldest members have started entering the workplace. And their expectations of you as an employer will be dramatically different too.
Data from Pew Research suggests that Gen Z is on track to be the best-educated generation yet. In addition, they want a good work-life balance and feel regular performance reviews are essential. And they’re not looking to stay long — the majority of Gen Z only plan to be with an employer for a maximum of 3-years.
Unlike in previous generations, where the mindset was about finding the security of a ‘job for life’ or climbing the corporate ladder and fighting tough competition to reach great heights, Gen Z understand there are skills shortages everywhere, know their worth and expect to receive multiple job offers. If companies treat this new generation like a commodity, they will really struggle with finding and retaining talent.
It requires organisations to employ a different mindset — what we refer to as a ‘transformation tour of duty’.
As in previous years, the organisation is still looking at what they can get from the individual. But today’s newest recruits are equally looking at what they can get from the organisation. It’s an arrangement that has to be of mutual benefit and respect. And when the employees feel they are no longer getting the opportunities or career progression they crave, they’ll happily jump to the next role and trade their skills.
Step 3: change the mindset around leadership
One of the important points he made is:
“Great leaders know when to step back so they don’t lead other people’s thinking. They are humble and know that even though they’re the ‘leader’, with the job title, salary and status to match, they don’t have all the answers…Great leaders empower their people and allow their ideas to emerge.”
Any leader today needs to be comfortable with uncertainty because the pace of change is so rapid. Most executives and senior leaders have achieved their current status due to their years of experience and having risen through the ranks. The likelihood is that they’re not ‘experts’ in customer service — which is the battlefield in the digital era. And for many, particularly in larger enterprises, they may have no direct interaction with their customers.
The uncomfortable truth: you’re no longer the most important person in the room.
But that’s ok.
In reality, it’s your frontline workers who really understand your customers wants and needs, and how to best satisfy them. As a leader, your role is about identifying the right expertise across the business and pulling together specialist groups to solve problems. By empowering these ‘experts’ to deploy their talents in the best way they know how, you set them — and the wider business — up for great success.
Make change constant with 90-day value cycles
In our last event, we explored three major components of change readiness: Value, Customer and Delivery. As part of this, we touched on how emergent strategy provides the successful 16% with the agility that modern businesses require to thrive in the face of constant change.
Rather than focus on a faraway goal 3-years in the future, emergent strategy gets your business to focus on the value you intend to deliver within the next 3-months, the potential challenges that could de-rail change, and how to overcome them.
To find out more about how to create the modern delivery engine that emergent strategy requires, download the orange paper…
Alternatively, join us at our next webinar on Wednesday 21st April at 5.30pm when we discuss emergent strategy in more detail, as our panel of experts explore the final three components of change readiness: People, Strategy and Leadership.