Open Strategy – or trust in your own employees!

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Ideas about business strategies are slowly changing. Until now, strategic management was the exclusive preserve of the executive level or management. Sometimes management consultants were also commissioned to shape the future for their own company. The latter often led to acceptance problems and slow implementation. With the Open Strategy approach, a radically new way of strategy development is now being taken. In the following, the approach is described in more detail, the main changes and advantages compared to the classic approach are shown and finally there are some practical tips on how to apply it in your own company, department or division.

What is Open Strategy? A definition

Open Strategy is about radically opening up the strategy process by involving the company’s own employees as well as external third parties or even competitors in strategy development and formulation. Instead of developing strategies only within management and advisory circles, they deliberately push for access to other sources of knowledge, such as Fontline employees, customers, partners and suppliers. This approach was developed by professors and advisors Christian Stadler, Julia Hautz, Kurt Matzler and Stephan Friedrich von den Eichen over the last 2-3 years. You have recorded your knowledge in the book of the same name (Link).

The main advantages of using the Open Strategy approach are as follows

The wisdom of many

In the Open Strategy approach, strategy development is not limited to a small circle of top managers or external consultants. The more people are involved, the more diverse the approaches. And this principle already applies in the analysis. This is because scientific findings show that frequent mention of strengths, weaknesses, opportunities or risks also indicates high relevance. In his book “The wisdom of the many – why groups are wiser than individuals”, James Surowiecki goes into detail as early as 2004 on the fact that the accumulation of information in groups leads to joint group decisions that are often better than the solutions of individual participants (so-called collective intelligence). Leaders would therefore do well to increase the probability of success of a strategy with the help of collective intelligence.

Diversity instead of single-mindedness or the crux of confirmation bias

If the strategy development is done by a few, the results can quickly become one-sided. Thus, political interests of individuals usually stand in the way of a promising strategy. This behaviour can be traced back to the so-called confirmation bias. In the process, people and especially alpha animals in leadership positions see their own convictions confirmed by others. In this way, information is selectively chosen that fits one’s own perception.

On the one hand, novel strategies are based on courage and thinking outside of familiar patterns. The confirmation bias also often applies to so-called industry experts. Strategy consultants who have a specific industry focus tend to use already known scenarios from the industry environment for strategy development. So the chances of developing new innovative strategies are slim. It is better to involve cross-sectoral experts.

External experts, however, do not necessarily come up with more innovative ideas than the company’s own staff. Especially when the involvement of the employees comes from different hierarchies and areas. Employees who are new to the company can also often bring in new ideas and directions without bias. Accordingly, Open Strategy brings out more innovative or even disruptive ideas than conventional methods.

Greater willingness to implement or prevent the ‘not-invented-here’ syndrome

A major advantage of the Open Strategy approach is that implementation fails less often. This is simply because the staff involved also feel responsible for successful implementation. Changes are more likely to be accepted if they are brought about by one’s own ideas. This behaviour is sometimes also based on the “not-invented-here” syndrome. This is an aversion, i.e. a negative attitude towards ideas and innovations that are brought externally to a company, a person or another department of the same company. The more and earlier the staff from various company units are involved, the greater the willingness to implement the ideas and strategies.

More realistic instead of theoretical artefacts

Strategies in which the company’s own employees were involved in the development take better account of the company’s conditions. Outsiders are not familiar with the current situation in the company, do not know about investments that have just been made or are simply too far away from the day-to-day business. The latter is one of the main reasons for involving external parties in strategy development, in order to prevent possible operational blindness. However, this is often overrated or used as a pretext for commissioning. In many cases, their own employees are quite capable of getting rid of operational blindness if the questions are asked appropriately and they do not experience any interference from the supervisors present. Measures proposed by the workforce are more concrete and tangible. The people know exactly what could be done, also in detail, because they deal with the processes and operational issues on a daily basis or are in direct contact with customers and suppliers.

Simple is not always the best strategy, but the best strategy is always simple

Simple and comprehensible should be at least the mission and vision, which should reflect the strategy as guidelines. Storytelling is an essential tool for successful communication in today’s world. And this also applies to internal company communication. The more people from the company were involved in the strategy development, the more stories there are to tell. Managers as well as experts tend to use many anglicisms. Technical terms that are on everyone’s lips right now. And so these “buzz words” are often included in the strategy formulation. But this encourages misunderstandings among staff and sometimes counteracts the actual message behind it. Strategies are there for all to follow and understand what needs to be done to implement them. Keep them simple in communication and find out early on by involving staff.

Meets the expectations of a new generation

The classic approach to strategy development is also at odds with the new world of work (New Work). Employees want to be involved in the future direction of the company or division. And not have them presented top-down by the managers for implementation. It would also be fatal not to take into account the opinions and ideas of Generation Z, because they work with different means of communication, have a distinct value system and are open and receptive to technical innovations. Many of the young workers in the private sector make use of the latter in particular and can thus contribute significant innovative impulses to the development of the strategy.

To sum up, here are some practical tips for applying the Open Strategy approach

  1. Trust your own employees and involve as many as possible from different hierarchies and departments. The more diverse the composition, the better and more innovative the contributions.
  2. As a first step, open up the strategy process to your own staff. This step already brings a lot of new insights and ideas. The involvement of third parties can then take place selectively to verify or supplement the actual/target analysis. For many managers, the much more intensive and early involvement of employees is already a major adjustment of their self-image.
  3. Rely on tried and tested tools that are easy to use and build on each other. It doesn’t take the latest sophisticated strategy framework to come up with good strategies. The use of strategic management methods must not become an academic exercise, but must be applicable quickly, intuitively and without long training periods by many.
  4. Use digital solutions to work on the strategy flexibly and independently of time and place. This way you can also reach employees at international locations and are not tied to time-limited workshops at one location.
  5. The most suitable digital platforms are those that have been specially developed for strategy development in teams, such as ConWISE.de (link to trial version). Online whiteboards and collaboration solutions such as Miro and Mural, while offering many templates, do not guide users through the process and are designed as crativity tools for online meetings rather than for unaided offline elaboration.
  6. Challenge industry experts to ensure strategies innovate and differentiate from competitors.
  7. Use impulses from outside when developing your strategy. These can also come from AI-based systems.
  8. Always be aware: the employees in the company together are smarter than the smartest expert.
  9. Follow a structured approach to answer the 3 key questions: Where do we stand? Where do we want to go? How do we get there?
  10. Strategic management is not purely a leadership task. Open up the process consciously to your staff.
  11. Engage or appoint a person to coordinate and facilitate the process.
  12. Examine the possibilities of self-consulting approaches to develop successful strategic concepts within the company.

Näheres dazu auch im Artikel Strategy development in the 21st century – time for a new approach

Conclusion

The traditional process in which top management retreats with its team of advisors and works out a strategic plan behind closed doors has had its day. Today, it is no longer enough to communicate the results of this work in the form of powerpoints to employees in town hall meetings and then set a specific budget for each area so that they can implement the strategy. Managers already benefit from the involvement of their employees in the analysis. No one knows the company and the industry as well as she does. It is important to get rid of old thought structures that say that strategic management is the sovereign task of the top management. One would disregard the great potential that lies within one’s own company if one relied instead on the knowledge of a few or a few selected management consultants.

Specification of a strategy for successful implementation

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In the second part of our series on strategy creation, we dealt with how you can start concretizing your strategy based on the vision and mission as well as the environment and self-analysis. Building on that, let’s take a closer look at how you can flesh out the strategy .

From actual to target

The strategy aims to transform the company from the current state to a future state . If you have already followed the first two posts in our series, you have already defined it with the help of vision and mission.

If you now look at the current situation of your company, you will find that adjustments are necessary in various areas in order to achieve the set goal. The previously performed environment and SWOT analyzes will also help you. With their help, you can assess where adjustments are necessary.

The following section is intended to illustrate this using an example:

Example – A fashion manufacturer

As a fashion manufacturer with a business model that has so far been heavily focused on retail, you want to play a leading role in online retail in the future. In accordance with your vision, you want to become the most-worn brand in Europe with sustainably produced fashion.

Your company has several well-known brands in its portfolio and is well positioned in terms of production and logistics. This has already put you at the forefront of market shares in several countries.

However, you have weaknesses when it comes to online presence. Furthermore, the increasing change to online business represents a high risk for your current business.

As you can see from the environment analysis, your competitors in online trading have increased their sales considerably in recent years. In terms of brand awareness, however, they lag far behind your company. However, your brands are losing ground in customer perception compared to those of the competition.

The online strategy is to be concretized

The online strategy is to be specified

Strategic fields of action in the case of the fashion manufacturer

The factors mentioned above already result in a number of fields of action that need to be tackled in order to achieve the vision.

In marketing , the existing brands need to be modernized. This can also mean that individual brands are removed from the portfolio in order to focus on more promising ones.

In addition, the marketing channels must be coordinated with increasing online business. This also requires that the IT systems are provided to manage the goods and marketing materials digitally and to play them out in different channels. This can be done, for example, using a digital asset management system (DAM).

At the same time, new skills are required from employees. The HR department will provide training courses to ensure that marketing staff become more familiar with the needs of online business. New hires are made in IT for the provision and operation of new systems.

Strategic Goals

In the next step, you define strategic goals for the specified fields of action. These goals are intended to determine what is to be achieved specifically in the fields of action for the strategy’s observation period (3-5 years).

For the fashion manufacturer example, these could be:

field of action Strategic Goals
HR – building online skills
  • Extended training offer for online marketing
  • Creation and filling of three new positions in IT to set up and operate the online channels
IT – Technological basis for online business
  • Development and operation of the online channels
  • Creation of an infrastructure for the fully digital handling of product information
Marketing – modernization of brands
  • Consolidation of the offer of the two weakest brands
  • Start of a campaign for each of the two top brands
Marketing – focus on online channels
  • 100% growth in business on the top 10 online sales platforms
  • 30% growth on their own online platform

Be sure to define the goals SMART :

  • Specific – the goal should be specific
  • Measurable – the goal is defined quantitatively and/or qualitatively using defined measurement parameters
  • Attractive – the participants should have an interest in achieving the goal
  • Realistic – the goal should be achievable within the given timeframe with the available resources
  • Time- bound – specify the time when the goal is to be achieved

In this context, the OKR method should also be mentioned, which has gained enormous popularity in recent years.

With their help, the goals (objectives) are operationalized via concrete results to be achieved (key results). Implementation is then monitored and controlled by regular reviews of target achievement. This review can take place, for example, once a quarter. Visit our Knowledge Base for more information on this and other methods.

road map

After you have defined the strategic goals, you define the activities that are necessary to get from the current starting point to the desired target state. This often results in dependencies in terms of content or time. In addition, you will probably plan with limited resources that need to be coordinated.

Roadmap for the concretization of the strategy

Roadmap for the concretization of the strategy

You then arrange the activities according to their priorities and the dependencies mentioned. You then map these as shown above for each field of action on a roadmap diagram . This then defines your company’s path to achieving your goals.

The roadmap then serves as the basis for project portfolio management . In it, you define the relevant initiatives, provide them with budgets and monitor their implementation. This creates the transition to a successful and sustainable implementation of your strategy.

In real life, strategy is actually very straightforward. You pick a general direction and implement like hell.

— Jack Welch

Conclusion

The concretization of the strategy is a crucial step in the creation of the strategy . If you don’t do this, strategies are often too vague and not applicable in everyday work. In many cases, employees then perceive the strategy as “too aloof”. In many cases, this is followed by the fact that they completely ignore the strategy (according to the motto “again a new strategy, but nothing changes anyway”).

Hence our advice: Define your strategy based on a motivating vision and mission , strategic goals and concrete initiatives for the coming months and years. Then you have an excellent tool to lead your company successfully into the future. You can create this basis with the help of the ConWISE platform. Contact us.

From mission and vision to strategy

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In the previous blog post we presented the definition of vision, mission and values in the context of strategy creation. This article is now about how we proceed to set up a strategy – i.e. the plan for the next few years.

The goal is the way

Our target state is defined by the vision and the mission. We have a clear idea of where we want to go. The task now is to define the path from the current point of view to this goal. And as so often, there can be several ways.

For example, imagine you want to ride your bike from one place to the next. There is a short trail but it is a dirt road over a high mountain. Or there is a long way that is well developed with a bike path and does not contain any steep parts, but is considerably longer. Which one do you choose?

Your choice could depend on several parameters:

  1. First of all, which bike you have. You probably don’t want to ride a dirt road on a road bike, but if you have a mountain bike this could be an alternative.
  2. Then the choice also depends on your fitness. If you are well trained and love a challenge on the mountain, you might choose the first route to get there faster. If you want a more relaxed ride that can take a little longer, the second variant is more appealing.
Flat around the mountain or right over it?

Several paths lead to the goal

You see, with the same starting point and the same goal, there are different ways to get to the goal. And the choice of which path you choose depends on environmental factors on the one hand (gravel path or developed bike path, mountain or flat route) and on the other hand on yourself (your level of fitness).

It is similar in companies when they formulate a strategy. In this case, too, environmental factors are included (e.g. political environment, competitors and customer interests) and one’s own performance (available resources, skills, strengths and weaknesses) is considered.

In what environment do we want to achieve our goal?

There are a variety of methods for analyzing a company’s environment. For example, there is the PESTLE method (environmental analysis), whose name is derived from the first letters of the areas to be considered: Political, Economic, Social, Technological, Legal, Environmental . It is immediately obvious that these areas have a significant impact on a company’s scope for action.

In the last 10 years in particular, technological developments have opened up completely new market opportunities, but at the same time have made their application in many areas absolutely necessary in order to be able to continue to exist on the market. It is becoming apparent that in the next 10 years, in addition to the continued rapid development of technologies, environmental protection will also have a significant impact on the actions of companies.

Analysis of the environment

Another commonly used approach analyzes the following areas:

  • Customers – What are the current needs of your (potential) customers and how will they develop in the coming years? Think about it in the position of your customers.
  • Partners – Which companies do you work with (e.g. also suppliers) and what are their current and future drivers?
  • Technologies – Which technologies are currently available and are you already using them? Which new technologies have the potential to change your market or the processes in your company in the coming years?
  • Market – What are the trends in your specific market and how will the market develop? Will your services continue to be in demand on the market in their current form, or are adjustments necessary?
  • Competitors – Who are your main competitors and what are they doing to improve their position? Could there be new competitors who may not have played a role in your industry in the past?

After analyzing these areas, you will have an overview of how your environment is likely to develop over the next few years. With the help of this information, in the next step you can analyze what influence these factors have on your company and what opportunities and options for action may result from them.

SWOT analysis

When you look at your company, it is helpful to identify opportunities and threats in addition to the classic analysis of strengths and weaknesses. The SWOT analysis does exactly that. The advantage of this is that, in addition to looking at the company itself, its environment is also included in the evaluation.

  • Strengths – The strengths of your company
  • Weaknesses – The weaknesses of your company
  • Opportunities – The opportunities that will present themselves to you in the previously analyzed environment over the next few years.
  • Threads – The risks or threats likely to threaten your business over the next few years.

It is important with this procedure that you strictly separate between

  1. the strengths and weaknesses on the one hand, which arise from within your company and
  2. the chances and risks on the other hand, which are to be found in the environment of the company . The environment analysis from the previous step will also help you.

Examine the above points in the context of the previously defined mission, vision and values. Areas that are not relevant to the implementation of your mission are hardly relevant in a weakness analysis. Likewise, strengths will be of no use to you if they do not contribute to the achievement of the vision.

Be critical when analyzing and try to examine hyped topics in detail to see whether they really bring the promised advantages for your application. For example, many of the promises about blockchain that have been loudly communicated in recent years have turned out to be largely exaggerated up to now. In the field of artificial intelligence, on the other hand, there are many useful areas of application. Therefore, this topic should be analyzed more closely in most companies for its possible benefits.

Identify strategic fields of action

After you have analyzed the environment and your company within this environment, it is time to draw first conclusions. Based on the results of these analyses, you can now define strategic fields of action in which you want to become active. Fields of action arise, for example, if

  • You recognize new potential in the market, which your company should use with its strengths in the future
  • You want to fix weaknesses in your company in order to remain competitive, or
  • You identify new technologies that could make your company more efficient.

The strategic fields of action specify the topics that need to be worked on in the coming months and years in order to implement your mission.

Next Steps

By defining the strategic fields of action, you have taken another important step in defining your strategy. Some companies remain too vague here and subsequently have difficulties operationalizing their strategy. Therefore, in the next part of our blog series on strategy creation, you will learn how to specify the necessary steps to implement the strategy and set up a plan for the next few years.

If you want to start creating your strategy now, the ConWISE platform can support you with the individual steps. If you want to know how this works, just contact us . We would be happy to arrange a personal demo appointment with you.

How do you create a strategy?

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A classic strategy should specify goals to be achieved for a time horizon of approx. three to ten years and show how these goals can be achieved. For many companies, this will sound like an impossibility. Who can plan so far in advance these days? How realistic is it that a plan, once created, can remain stable for such a long time? The answer is quite simple: not at all!

Most people overestimate what they can achieve in a year and underestimate what they can achieve in 10 years. — Bill Gates

Planning in an uncertain environment?

As Bill Gates already indicated in his quote, significant developments can take place over long periods of time, for example five to ten years. Businesses can grow from startups to multi-billion dollar giants while formerly established giants fade into obscurity.

However, planning for such long periods of time is usually not very helpful. In the so-called VUCA world (volatility / volatility, uncertainty / uncertainty, complexity / complexity, ambiguity / ambiguity), the framework parameters change too quickly and too frequently for static planning to be of any long-term benefit. So why create strategies?

In order for the major changes discussed above to take place, there must first be an idea of what is to be achieved. Only when this idea, this conception of the future situation, offers orientation can a company achieve a promising future in the long term, despite the constant change in environmental conditions.

If you don’t know the port you want to sail to, no wind is the right one for you. – Lucius Annaeus Seneca

Agility as an answer

Since agility has been receiving more attention in companies, one might get the idea that strategies have had their day and that an agile approach would be sufficient. After all, always driving on sight and constantly adapting to changing conditions would be ideal for keeping a company on the ideal path in a fast-moving world.

But what is this path? Even if agility is a basic requirement for being successful in the market in most industries today, there must first be a clear idea of where the company should be headed.

Target

Only those who know the goal can achieve it.

Mission, vision and values

Every company needs a kind of fixed star that ensures orientation for all employees over a longer period of time. In this way, a company can definitely react to the immediate situation in the environment using an iterative approach and actively shape its future. The fixed star creates the basis for a common understanding in the workforce of what the general goal is and how the cooperation of those involved should look like.

This fixed star defines the mission, vision and values of a company. If these are well chosen and clearly described, they serve – even in an uncertain environment – as short and long-term orientation for the company or a team.

In this way, the daily pending decisions that have to be made in the company can be tested against its mission, vision and values. In many cases, the result of the decision can then be derived without having to discuss it in detail in each individual case. This is much more efficient and ensures that the company as a whole steers in the right direction.

Mission – What do we want to achieve?

The mission describes the services offered and the purpose of the company. It is formulated in it

  • what the company wants to achieve
  • who it wants to support and
  • why it does this.

A mission is formulated in an action-oriented manner, i.e. it describes what an organization undertakes to achieve the stated purpose. This distinguishes it from the vision, which defines a desired goal state.

Example of a mission

An example of a successful mission is that of Tesla:

Tesla’s mission is to accelerate the world’s transition to sustainable energy. – Tesla, Juni 2021

A not so well known example of a good mission comes from the Dubai Roads and Transport Authority (RTA):

Develop & manage integrated and sustainable roads & transportation systems at a world-class level, and provide pioneered services to all stakeholders for their happiness – Dubai RTA (2016)

See the next section for the associated vision. Together they give a good picture of the respective meaning of mission and vision and how they interact.

When creating your mission, you can use the following guiding questions:

  • what do we do
  • What is the benefit of our actions?
  • Who are we doing this for?

When answering these questions, be sure to hit on the key points that make your company special.

Vision – who do we want to be?

The vision defines a picture of the company in the future and explains where the company wants to be in a few years. The time horizon for the vision is usually 5 to 10 years. This is a period that is still reasonably “tangible”, but at the same time there is not too much uncertainty about the framework parameters that will then prevail. Of course there can always be surprises. Or would you have thought it possible in 2005 that 10 years later most of your friends would be using smartphones and billions of people would be communicating with each other on social networks?

In order to be inspiring and motivating, the vision should be formulated ambitiously, but on the other hand it should also offer a realistic chance that the goal can be achieved. Ideally, the vision offers employees such an interesting or even fascinating outlook on the future of the company and thus their own future that their motivation is significantly increased.

So think carefully about how you formulate your vision and be sure to take a critical look at it from the point of view of your employees.

Example of a vision

The Dubai RTA vision is a good example of a short but also clear and motivating vision:

Safe and Smooth Transport for all – Dubai RTA (2016)

In combination with the mission presented above, it becomes clear that the goal to be achieved is defined here. The mission appropriately defines what is being done to achieve that vision.

Questions to review the vision include:

  • Is the vision inspirational, not quantitative?
  • Is the vision focused and clearly formulated?
  • Is the vision ambitious, but can it be realized with special efforts?
  • Is the value created by the company clear for its environment, possibly even for society?
  • Is it clear who the company is creating value for?

Values – Which values are important to us?

A company’s values are one of the cornerstones of its culture. By explicitly emphasizing and prioritizing certain values, the company management determines

  • how to deal with each other and how decisions are made within the company and
  • how its employees (and thus the company) should behave towards the outside world.

It is very important that the values are not only written down and communicated, but above all that they are (exemplified) lived. As a role model, managers in particular are of particular importance. Any action or decision should be critically questioned as to whether it goes hand in hand with the defined values. If this is not the case, the employees notice this quickly and no longer take the values seriously.

Culture eats strategy for breakfast. – Peter Drucker

However, if the values are visibly lived, they are the driving force to carry out the mission effectively. Provide employees with orientation for their daily activities.

example for values

The Dubai RTA has defined the following values:

Corporate reputation
Pioneering & Competitiveness
leadership and teamwork
Happiness and Positive Energy
innovation and creativity
-Dubai RTA (2016)

These values form the basis for daily action to implement the mission. In this case, they are more “classic” and could also apply in this form to other companies.

An example of a more modern definition of corporate values can be found at Airbnb:

Champion the Mission – We’re united with our community to create a world where anyone can belong anywhere.

Be a Host – We’re caring, open, and encouraging to everyone we work with.

Embrace the Adventure – We’re driven by curiosity, optimism, and the belief that every person can grow.

Be a Cereal Entrepreneur – We’re determined and creative in transforming our bold ambitions into reality.
– Airbnb 2021

If it fits the culture of the company, then – as can be seen from the example of Airbnb – a value can be formulated with a wink.

Defining the values in the company is often not easy, especially if you don’t just want to fall back on the classic values (teamwork, innovation, motivation, …). A good approach is to look beyond the company and, for example, also include the private context.

For example, most people have certain positive experiences from the past in their heads from which they can derive values. In line with the above example, some employees may have had particularly nice experiences on vacation due to the outstanding hospitality of the hosts. If you then analyze which values contributed to making this experience so special, this could lead to the above example: “Be a Host – We’re caring, open, and encourage to everyone we work with.”

Conclusion: mission, vision and values as the basis of the strategy

As soon as the cornerstones of the future orientation of the company have been defined via mission, vision and values, further specification must be made so that the strategy can also be operationalized. We will address the relevant topics in another blog post .

If you want to start working out the cornerstones of your strategy straight away, simply use the ConWISE platform. Here you will be guided step by step through the creation of the strategy and receive assistance as if you had a consultant at your side. Contact us!

Image credits People vector created by pch.vector – www.freepik.com