As a consultancy that specialises in the development and implementation of strategy for businesses of all types and sizes, we regularly make use of a large number of strategy and performance related models and frameworks. Most common amongst these, particularly when assisting clients with strategy development and execution, is without a doubt Strategy Maps and Balanced Scorecards, a favourite amongst strategy consultants for many decades.
Regardless of which model is used there are essentially two critical elements in any strategic development process: considering the internal and external environments. While focusing on internal matters is vital to ensure a business is fit for purpose, it could be argued that without an external view it is impossible to establish what purpose the business needs to be fit for. A critical stage in developing this external view is to reference all available sources that may provide some kind of clarity for what the future holds, and how the business may thrive within that future version of the world we currently live in.
The problem facing all businesses in today's world however, is that the future we are trying to predict in order to exploit any associated opportunities and mitigate risks is becoming less and less clear, more 'foggy'. We all accept that the world as we know it, and therefore also the business world, is changing rapidly and moreover that the rate of this change is constantly accelerating. Greater change equals less clarity and a higher chance that our predictions of what the future holds will be wrong. This creates pressure for a traditional strategic development process - an inability to predict the future at the normal three to five year planning horizon with any kind of confidence creates strategic uncertainty. After all, what is the point in operating within such a strategic planning cadence if the world has already changed before the current strategy has even been launched? There is a danger then, that with these more traditional strategy setting methodologies, the all important implementation aspect is never started and the strategy itself becomes irrelevant before the ink is even dry.
In a simple analogy, let's consider for a moment an archer shooting an arrow at a target - the archer is the business, the target is the desired goal, the distance to the target is a 'traditionally standard' three to five year strategic planning cycle, and the arrow's path describes the strategic direction of travel towards that target.
In the past the archer always had a reasonably high degree of confidence of being able to hit the target from the set distance - conditions were good, but now an ever thickening fog has rolled in and we are no longer able to see the target with the same clarity we once could. So now the archer may have a vague idea of which direction to fire the arrow, but it is very unlikely it'll hit the target.
Rather than just firing blindly into the fog therefore, the best solution is to bring the target closer to remove some of the uncertainty and achieve a clearer picture, to a point where we can be reasonably confident we can in fact hit the bullseye. Of course at the point of firing a gust of wind may still shift the arrow off course - we can't control everything - but there is still a higher chance we'll get it close than simply firing into the fog.
Back in the world of strategy development, for some businesses that still have clarity about how the future might look in 3-5 years time Strategy Maps and Balanced Scorecards (or other 'traditional' strategy development tools) may continue to be relevant today, and for many clients there is no need to change the way they set and monitor strategy. But for many businesses, particularly those within fast paced industries, they need to stop looking into the murky, chaotic fog on the distant horizon, and instead focus on a point that's closer, that will allow greater clarity. As a faster paced, more 'agile' approach to achieving strategic goals OKRs do just this, shortening our horizon to improve relevance and engagement, whilst also increasing the pace of implementation, review and refinement.