In our blog post Goals set, Strategy lost: Decoding Company Confusion we addressed an approach to overcome major shortcomings in traditional Program Management by ensuring strategic alignment with organizational goals, prioritizing tangible business value delivery, implementing robust metrics for success measurement, and fostering effective communication and coordination among stakeholders, thereby enhancing the likelihood of organizational transformation success and widespread strategy comprehension.
In today's blog post, we take a look at the strategic planning process that precedes it and explain why agile methods should now be part of a company's basic strategy toolkit.
The end of the traditional strategic planning process
In today's fast-paced and ever-evolving business landscape, the traditional approach to strategy often falls short of meeting the demands of the modern world. For decades, organizations have relied on frameworks like Management by Objectives (MBO), Balanced Scorecard, or Hoshin Kanri to set goals and drive performance. While these systems served their purpose in the past, they are increasingly proving to be inadequate in today's digital age.
All of these frameworks support the traditional strategic planning process which is dominated by the characteristics of:
Internality: In this model, the strategy is only for a chosen few and the process is C-level driven. The Management Board alone or together with a small team of insiders come together to define and outline the future strategy.
Hierarchy: Understanding the future is critical for making the right decisions. Despite that understanding, traditional strategy is backward-looking, often building on historic financial data and market performance to extrapolate future trends.
Duration: While the world is moving fast, a strategy process used to take time, often anywhere from 4 to 6 months.
Historical Basis: Traditional strategy is backward-looking, often building on historic financial data and market performance to extrapolate future trends.
Low Frequency: The “complete” strategy process is only run every 3(-5) years as a standardized process and with minor updates every year. However, the operating environment and market conditions can change fundamentally, so that a mayor revision would be mandatory.
One of the main shortcomings of traditional strategy processes lies in their rigidity and lack of adaptability. These systems are often hierarchical, with top-down goal-setting that cascades through the organization. While this approach may have worked in more stable environments, it struggles to keep up with the rapid pace of change and uncertainty that characterizes today's business landscape.
Moreover, traditional strategy processes often suffer from a lack of alignment and engagement. Employees are given goals to achieve, but these goals are often disconnected from the larger purpose or vision of the organization. This disconnect leads to disengagement, as employees fail to see how their work contributes to the bigger picture.
Another issue with traditional strategy processes is their focus on short-term objectives at the expense of long-term vision. Organizations become fixated on quarterly targets and financial metrics, losing sight of the broader strategic goals that will drive sustainable success in the future.
The Case for Change: Bring strategy to life!
It's clear that the strategy process urgently needs a revamp to address these shortcomings and better equip organizations for success in the digital age. One promising approach is to embrace a more agile and dynamic framework that prioritizes adaptability, alignment, and engagement.
The resolution comes with the use of Moals, or Midterm Goals, which serve as a vital bridge between an organization's strategic vision and its operational objectives in the context of Objectives and Key Results (OKR) methodology. Unlike traditional strategic planning, Moals offer a dynamic framework that emphasizes adaptability, alignment, and continuous improvement, enabling organizations to navigate the complexities of today's rapidly evolving business landscape. By defining clear and actionable goals for the midterm future, Moals empower teams to make strategic decisions that drive meaningful progress towards achieving the organization's long-term vision.
The Moal Picture (Source: die.agilen, Organisationsberatung, München)
This innovative approach represents a paradigm shift in the way organizations think about strategy. Instead of rigid, top-down goal-setting, the Moal Picture paints a holistic vision of where the organization wants to be in the future.
Consequently, when implementing the use of Moals in your strategy process, the most important points to consider are:
Alignment with Vision: Moals should directly align with the organization's overarching vision and purpose to ensure that they contribute meaningfully to the long-term strategic objectives.
Holistic Perspective: Moals should be viewed as a holistic set of objectives, representing different facets of the desired future state of the organization. They should not be treated in isolation but rather as interconnected components of a larger strategic framework.
Long-Term Focus: Moals typically have a timeframe of one year and should depict the desired state the organization aims to achieve within that period, serving as a guide for strategic decision-making and resource allocation.
Strategic Impact: Each Moal should have a significant strategic impact, driving progress towards the organization's vision and enabling the achievement of key outcomes that contribute to overall success.
Continuous Iteration: Moals should be dynamic and subject to review and iteration based on changing market conditions, emerging opportunities, and evolving organizational priorities. Regularly reassessing and refining Moals ensures their relevance and effectiveness over time.
By focusing on Moals, organizations can foster alignment and engagement across the entire organization. Moals serve as the glue between the strategic vision and the concrete objectives, ensuring that everyone is working towards a common goal. This approach promotes collaboration, innovation, and a shared sense of purpose, driving organizational performance to new heights.
Moreover, the use of Moals encourages organizations to think long-term and embrace uncertainty as an opportunity rather than a threat. Instead of fixating on short-term targets, organizations can focus on building a sustainable future that is resilient to change and disruption.
Embracing Agility: Transforming the Strategy Process with Moals
In conclusion, the strategy process urgently needs to evolve to meet the demands of the modern business landscape. By embracing a more agile and dynamic approach centered around Moals and the Moal Picture, organizations can unlock new levels of performance, innovation, and success in the digital age. It's time to paint a bold and vivid vision of the future and embark on a journey towards a more agile and adaptable strategy process.
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