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How do you attune to the environment to make strategic choices?

From adaptive capacity to anticipatory capacity

We now know that strategy is no longer just about making long-term decisions. Today's environment is changing so rapidly that a three-year period soon seems far in the future. More and more, strategists say that organizations should rely on their adaptability to respond quickly to their environment, rather than deal with (difficult) long-term visions. This seems a plausible statement, but at the same time there is a danger that only the short wave is listened to, while significant signals on the long(er) wave are ignored. This can lead to organizations losing their ability to anticipate.

The environment communicates in different wavelengths

There is a lot going on around organizations. The environment emits all kinds of signals at different wavelengths. What matters is that your organization has the right antennas to pick up all these signals and distinguish them from each other. The first question is whether the organization is aware of these different signals and how they are picked up and interpreted.

Roughly speaking, we can speak of (1) signals that prompt the organization to act in the here and now, (2) signals that encourage activities that do not seem relevant now, but will be in one to two years, or (3) signals that indicate opportunities or threats three years from now or later. This seems obvious, but we are increasingly seeing that organizations have not (or no longer) properly tuned their antennas to signals that will have an impact on the choices to be made in the future. Or not realizing that future opportunities also require action in the here and now. The 'AM' (short wave) drowns out the other bands, as it were.

As an example, let's look at the single strategic challenge of having well-qualified personnel. That has become a scarce commodity in some sectors and companies are struggling to recruit and retain employees. It is striking that in this challenge solutions are sought that are based on the short term (namely the hiring of external or temporary workers), but that the decision to invest as a company itself in the development of qualified personnel is not forthcoming. While the signals from the environment do not indicate that this scarcity will disappear in the first two to three years, and this decision in fact provides a direct competitive advantage. It is also possible that in the medium term, due to technological developments, the required competences have already changed significantly, so that investments must be made not in people, but in robots.

The question is therefore whether these second and third signals from the environment are properly picked up.

Informed decision making – who and how?

The first thing companies can do to tune the antennas to pick up the right signals is to make employees responsible for that: who should listen to signals? If we follow the example of having qualified personnel at our disposal, and label this as of strategic importance for the organization, then it is good to keep an eye on developments in this area. The crux is often that 'someone' has to do that. If employees have been appointed who can explicitly report on the sounds from the environment, in the different wavelengths, they can make management aware of these signals when making a decision.

Organize your 'antennas'

Then we come to the 'how'. In our view, this consists of three parts. The first step is: what does the antenna look like? The second is: what are relevant signals? The third and final step is: how do we incorporate the signals from those different wavelengths into our decision-making?

1. It's busy on the AM wave…

To be able to hear the environment, the organization or the employee must have access to the right sources. What do we read, how do we get information, who do we talk to in the area? Do we have enough resources to keep us informed on all three wavelengths? Granted. A lot of information from the area comes to us via the short wave. We deal with many things in the here and now. The trick is to unravel this white noise and look for sounds of a strategic nature. That is not always the case. We speak of strategic signals when they have an impact on: 1) the entire organization, 2) the competitive capacity of the organization, 3) continuity and/or 4) value creation (in the short or longer term). This often does not concern the daily sounds, but the longer wavelengths. It is difficult for people to step out of the here and now, and especially from their own sector. Make sure that you involve enough fresh and 'cross-thinkers' who will show you a broader perspective. Sometimes you need someone from outside to filter the signals from the ether that you as an organization do not hear.

2. Decide when to act

It obviously requires the necessary investments to be properly connected to these sources, but also to unravel the signals and assess their value. The second part of the 'how' question is therefore to draw up a number of leading indicators from the relevant sources that serve as input for the decision-making process. In our example, think of a 'scarcity indicator' for the competencies you are looking for as an organization. You can often think of quantitative indicators for the short and sometimes medium term. Then discuss with each other at which value you want to receive a notification in order to take action. In the longer term it is more difficult to find indicators or determine threshold values, but with a little creativity and logical thinking you can go a long way. You can also list some more qualitative expectations of relevant trends and developments or convert these into more quantitative data, for example with a Early Warning System. In short, it helps to have an idea about what relevant information can be found on which wavelength and how you can interpret it.

3. Organize the right strategic dialogue

Now that you are tuned in to the relevant wavelengths and have an idea of ​​what the relevant information is that you are going to listen to, the third and final step follows: how do we incorporate the signals from those different wavelengths into our decision-making? In the example mentioned, it is conceivable that we as an organization keep an eye on indicators about how large the new recruitment of potential new employees is from the schools, how many (latent; this group already has a job) job seekers there are. For the somewhat longer term, you could use expert estimates that, for example, indicate the impact of changing consumer behavior or automation on the staff shortage. On the basis of the indicators and expectations/estimations you can make plans, prepare decisions and determine direction. Decisions for the short term that do not lead you into a dead end in the future and, vice versa, decisions for the somewhat longer term that you can also handle in the short term. Also have a good conversation about how one wavelength relates to the other and which wavelength should be given the most weight in your choices and direction determination. In short: interpreting, weighing wavelengths and preparing conceivable activities that must be started depending on important indicators or estimates.

Easier said than done

We know it's easier said than done. You may not have the luxury of appointing someone to listen to all those antennas and also have the signals evaluated for both short and long-term decisions. In that case, take the time to ask each other at a strategic level whether you are receiving all wavelengths, what the most important signals are and how and whether you take them into account sufficiently. My colleagues and I are of course happy to think along with you.

Questions about this article? Please contact Maurits Speksnijder (m.speknijder@jester.nl, +31 6 83 64 83 53)

Maurits Speksnijder

Maurits is a partner at Jester Strategy. He is well known as a passionate Strategist. He is a business administrator pur sang and is a welcome advisor in both the boardroom and the shop floor. Maurits has deep expertise in strategy, labour, data science, organizational design and change. He is also often asked as a facilitator and trusted advisor of the C-suite. Maurits lives in Gouda, is the father of four children and can often be found on his racing bike in the Krimpenerwaard.