Strategy in a Fast-Moving World
World politics is in turmoil: transatlantic relations are crumbling, several wars are underway and Switzerland’s neighboring countries are also facing challenges. But the pace of events is also increasing within Switzerland. Not least due to the digital transformation. “The world has become more dynamic and therefore more uncertain,” says Beat Scheidegger, board member, strategy consultant and lecturer in strategic leadership at the CAS Board of Directors at Rochester-Bern. How is it still possible to develop a meaningful strategy in such a fast-moving world? Scheidegger provides answers.
Are classic strategy models outdated?
Traditionally, companies have drawn up a strategy every five years, which was then valid for this period. Is this still up to date? “It depends on the company’s ambitions and how dynamic the market is,” says Scheidegger. Companies that operate in a very dynamic market and have great ambitions have a difficult time with traditional models: “Managers who rely on traditional models in such an environment run the risk of missing opportunities or overlooking risks,” he adds.
The situation is different in very traditional markets. One example is public transport. This market has also changed, for example due to digitalization. Nevertheless, the basic concept – compared to other products and services – is still the same as it was 40 years ago. Overall, this market has not changed so quickly and is relatively predictable. Old strategy models can still be effective here. “If you want to know whether traditional strategy models still make sense for your company, ask yourself: How dynamic is my market and what are my ambitions?” says Scheidegger.
New agile strategy models
There are many different new strategic approaches. What they all have in common is that they are more dynamic because they adapt to the speed of change. However, this does not mean that modern, more agile strategy models are not also geared towards the long term. It may sound paradoxical, but: “The more uncertain the world, the more important it is to have a clear vision,” says Scheidegger. According to Scheidegger, an analogy from the mountain world can help to understand this:
Anyone who wants to climb a mountain has a clear goal in mind – the summit (= vision). However, the path to the summit (= strategy) can change constantly, as conditions are uncertain and adjustments are necessary. But precisely because the path is kept flexible, it is all the more important to keep the summit in sight. The same applies to the vision and the strategy – if the strategy is agile, a clear vision is all the more important.
It is helpful for the vision if everyone has a similar understanding of the future. “Let’s take digitalization as an example. What do we think of when we hear digitalization? What will it mean for our company in five or 10 years’ time?” says Scheidegger. “If the company has a uniform picture of the future, decisions can be made more easily,” he adds.
Ideally, such a vision is drawn up approximately every five years. However, it is reviewed every year and certain elements are adjusted if necessary. However, its basic features should remain stable. In order to obtain a picture of the future that is as realistic as possible, it is helpful for smaller companies to observe larger companies in the sector that invest in their own trend analyses and to learn a few things from them. Suppliers and customers can also be surveyed to obtain a picture of the future.
Taking risks and learning from mistakes
“Unpredictability is the challenge of our time and we have to learn to deal with it,” says Scheidegger. AI is a good example of this. Companies need to ask themselves which AI innovations they invest in. After all, they don’t know whether these innovations will really be successful and whether the investment will pay off in the end. And sometimes the investments come too late: by the time they are implemented, they are already outdated.
In this difficult environment, companies that generate test fields and cultivate a good error culture have an advantage. “Uncertainty means that you have no empirical values from which you can derive an action,” says Scheidegger. As a result, it is almost impossible not to make mistakes. However, it is important to learn from these mistakes. If you blindly try everything left and right, you won’t get very far. But those who test, allow mistakes, learn from them and make appropriate adjustments have the potential for success. “Testing, learning and adapting is also a process,” says Scheidegger, and new strategy models such as agile strategy or, in some cases, open strategy are also moving in this direction.
The dynamization of markets requires new processes, methods and decision-making paths. Build up targeted skills to turn unforeseen situations into competitive advantages. Adaptability is no longer an option – it is the decisive core competence for boards of directors and management that characterizes sustainable companies.
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