The Key Elements of An Adaptive Strategy
We all understand the importance of having a clear strategy, but as the world rapidly changes around us, adaptive strategies are arguably becoming equally (if not more) important. The question is, what elements do businesses need to incorporate into their strategies to ensure they can adapt to these changing conditions? In this article, we explore the importance of progress visibility, linking strategy to initiatives and RAID awareness.
Element 1 – Progress Visibility
The first key to an adaptive strategy is progress visibility; having a clear understanding of how the execution of your strategy is tracking relative to its original objectives. This visibility should be at a level that allows you to answer key questions such as:
- Are initiatives associated with the overarching strategy on schedule?
- Are costs forecasted to be in-line with the budget, or is there likely to be to be an overrun?
- Is the strategy on track to deliver the level of value that was originally intended?
Being able to quickly obtain answers to these questions allows you to make well-informed judgements about whether your strategy needs to be adjusted to fulfil its objectives. From our experience, however, the third question is arguably of greatest importance. Businesses need to ensure that their strategies deliver the value that was originally intended. Progress visibility, therefore, involves the creation of indicators that can alert management if a strategy is not on track. The key to an adaptive strategy is ultimately about being able to respond to these indicators early enough, so that value is delivered when the strategy is executed in full.
The benefit of having these end-to-end links between strategies and initiatives is that it facilitates clear communication, vertically as well as horizontally, so that adaptations can be made across the entire organisation. For example, if a company must adapt its corporate-level strategy to reduce its operating expenditure costs from $20 million to $15 million over a set period, corresponding reduction targets can then be shared across corresponding business units.
Another benefit to having these clear links can be found within the broader context of the Progress Visibility element discussed previously. For example, if management identifies that their broad-level strategy is not on schedule, they can then drill-down to the contributing initiatives to pinpoint the area/s that require further focus.
Element 3 – Awareness of Risks, Assumptions, Issues & Dependencies
One of the key reasons why an adaptive strategy is critical is the ability to respond to factors that could impact the execution of the strategy overall. These factors are commonly grouped together as Risks, Assumptions, Issues and Dependencies or RAID Items. To first identify these items, there are several important questions that managers should ask:
Risks: What events could occur that would have an adverse impact on the execution of our strategy?
Assumptions: Is there anything that would contribute to the success of our strategy that we assume is already complete?
Issues: Are there any current matters which need to be considered and addressed by our team?
Dependencies: Are there any other projects or initiatives that need to be completed for us to complete the overall execution of our strategy?
Once these RAID items have been identified, you should then identify the impact these factors would have on the execution of your strategy, and what the likelihood is that they will occur. Where possible, mitigation and action plans should then be developed for each RAID item.
Element 2 – Clear Links Between Strategy and Initiatives
The successful adaptation of a corporate-level strategy often depends on individual business units being able to adapt accordingly. As such, having clear linkages between a corporate-level strategy and the individual initiatives that are designed to fulfil that strategy is crucial. Businesses usually find that when a strategy can be broken down into Programs, Sub-Programs, or workstreams, and then Initiatives, this provides a clear strategy execution hierarchy across all levels of the organisation.
By identifying, classifying, and mitigating RAID items, adaptability can be built into an organisation’s overall strategy. This then minimises the probability of unexpected events having an adverse effect on the execution.
Conclusion – Adaptation Is Key
As the significant impact of the unfolding COVID-19 pandemic continues to increase demands on businesses to adapt, Amplify is determined to continue helping its clients deliver business value to their key stakeholders. Our company has worked with global corporations (including members of the Fortune 500) across many industries and sectors to create adaptive strategies that deliver results and we would love to help you too. Click on the button below to learn more about Amplify.