The two-day business strategy offsite was coming to a close. There had been a number of big ideas, new initiatives and impressive objectives captured across the executive team.
The executive team had put a lot of thought into shaping a strategic plan with the right mix of inspiring vision and unique strategies. These initiatives were bold and were developed to bring the organisation into its next phase of growth.
The final strategy was then released and communicated to the broader organisation.
After an initial feedback process, it became apparent that management and staff didn’t feel the strategy represented any of their first-hand experience with client needs or unique market insights.
The result was an employee base who felt no sense of ownership or conviction to execute the overall strategy outcomes.
So, why did this approach fail?
The basic problem was that the strategy was largely based on big assumptions from inside the organisation’s four walls, developed solely from the executive team’s perspective.
This approach to strategy is based on the assumption that we already have all the answers. It is an approach to strategy that predominantly stems from a traditional top-down management style where executives don’t bring in outside perspectives.
This is an example of Strategy Development.
In this article, we’re going to discuss Strategy Development vs Strategy Discovery – largely from the ground-breaking work of Dr. Graham Kenny from Harvard Business Review.
Strategy Discovery – A shift in mindset
The principle of Strategy Discovery rather than Strategy Development comes from Dr. Graham Kenny – Australia’s only regular contributor to Harvard Business Review. Graham is a globally renowned strategy educator, has been CEO of numerous businesses and has consulted with various well known organisation leaders.
Through years of testing and experience, Graham found that when we put too much focus on the executive team and board trying to develop a strategy, we typically miss a large number of unique insights from broader staff – as well as insights from external customers, suppliers, partners and stakeholders.
“Many executives take a narrow view of the (strategy) process, fearing that if they open it up, they will muddle decision-making. They may also fear that they only will expose their ignorance by reaching out for ideas” Dr. Graham Kenny
How modern organisations need to approach strategy
Organisational cultures are changing. It’s becoming disastrously apparent that companies need an approach to strategy that cuts through traditional strategy theory and instead resonates across their organisation and broader stakeholders. As Graham quotes in his recent Harvard Business Review article
“Strategy-making is a collaborative process of discovery. It’s in what you don’t know much about that you’re likely to find the best answers”.
Staff at various levels generally want to have some sort of input into the strategy process and initiatives.
Strategy is shifting from a development approach to a discovery mindset, involving unique and industry-defining insights from various perspectives.
A discovery approach ensures that the business strategy gets involvement and commitment from broader management and staff, and also responds to rapidly evolving external conditions.
Why Strategy Discovery is so effective
Organisations need to engage with diverse viewpoints across their workplace and externally to create a strategy that is relevant and delivers meaningful outcomes.
If people are simply sold a top-down strategy from the C-suite, why would they care if it succeeds or not?
Strategy Discovery brings together unique perspectives from your most important stakeholders, both inside and outside the organisation. This means you are no longer relying on assumptions or the loudest and most dominant voices in the room.
As world-renowned strategy & innovation best-selling author and Professor at Columbia Business School, Rita McGrath states in her concept of Discovery-Driven Planning
“Markets that do not exist cannot be analysed – Suppliers and customers must discover them together. A discovery-driven approach begins with the assumption that you don’t have the answers” Rita McGrath
Taking a Strategy Discovery approach, also directly impacts organisational culture. It helps shift employee mindsets to one of personal ownership with a focus on solving the most impactful client problems.
Strategy Discovery in action
Foundstone has recently worked with the CEO and board of a major healthcare services organisation. The previous CEO was putting a lot of pressure on themself and the executive team to come up with a big-hitting vision and accompanying initiatives.
This was causing a lot of stress and the ideas being proposed weren’t solving the current industry problems and changing external macro conditions.
When we opened up the strategy process with the new CEO by listening to broader management and staff observations alongside a targeted group of external industry leaders, we soon discovered several significant insights and anomalies that changed the whole trajectory of the strategy – and therefore the impact.
The process also validated a number of key questions that the executive team held and gave them the confidence to make the tough strategy decisions. None of this would have been achieved if we’d run the process via the traditional, top-down, closed-room approach.
How to start taking a discovery approach to strategy
Through our first-hand experience, there are three simple, yet highly effectual shifts that all organisation leaders can take when approaching strategy:
Involve some of your management and staff in the initial strategy process so they can share their unique insights from directly working with clients and the broader industry.
Invite external partners into your initial strategy conversations and listen to their perspectives on the biggest industry problems to be solved and how your organisation might do that.
View the process as one of discovery and co-design. Don’t try to find all the answers yourself upfront or develop strategies based on a small number of views and big assumptions.
These simple tweaks to the strategy process change the whole dynamic of trying to develop it yourself and then trying to ‘sell’ your strategy to the broader organisation.
Learn more about Strategy Discovery
Why Your Strategy Needs to Be Discovered, not Developed Podcast episode:
Harvard Business Review article: “Leaders Need to Get Comfortable Collaborating on Strategy” – Dr. Graham Kenny:
Harvard Business Review group “The top-down approach doesn’t work anymore”
About Foundstone Advisory
Foundstone is a business and strategy advisory firm base in Melbourne. We are experts in incorporating Design Thinking, Open Strategy and Co-Design consulting principles for impactful business strategy.
To find out how to start applying modern strategy in your own organisation and leadership, enquire about our Strategy Consultation here.