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Formulating Breakthrough Strategy and the Making of the Damascene Sword
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The making of the Damascene, the Samurai, or the Viking sword, took time. Each blade was meticulously shaped by hand into hundred layers of steel. This was the secret of its superiority. Each blade was also special and unique due to the passion involved in the making. This was the case over 1000 years ago, because the sword represented the most important thing in the battlefield. Such blades were reputed to be tough, resistant to shattering and capable of being honed to a sharp, resilient edge.
Strategy is the most important defense and advance mechanism of the company and one should therefore take enough time in the making, and to invest plenty of thought and heart in the process. Formulating strategy is the most decisive and critical activity a company undertakes; it is about where the mother ship is heading and about the best routes. It is about the whole existence of the business. It is about the fate of the organization. This relevance is more pronounced for rapidly changing and volatile environments, where disruptive developments and innovations have become the norm of the day.
Strategy formulation is a journey on a quest. It is a treasure hunt exercise, a search for hidden paradises. There are definitely treasures, paradises and worlds out there, in the present and in the future, that we do not know about, and need to be found or even created. Strategy formulation is a journey on a quest, with the confidence of finding that treasure or hidden paradise. It is about finding hidden opportunities. The actual formulation of strategy is an adventure in itself, and business strategy should be also in the spirit of exploration of the unknown constantly: it is a journey of exploration and change into the unknown.
Furthermore, purpose of strategy formulation is to get the right formula and combination for success in the coming 3 -5 years. It is about establishing a systematic way to succeed in the present and in the future and to strike the right balance of the many factors involved in success. It is about defining CHOICES, and indeed many possible choices, all great choices, and selecting the best few, keeping in mind the need for some diversity, balance and unexpected changes.
Do you want a boring and limiting strategy or something spectacular? As with everything else, there are different quality levels in strategy formulation work and in the strategic outcome. There is the limited 3 wheeler carriage strategy and there is the spectacular Rolls Royse strategy. It is about a wide spectrum of qualities in strategy outcome. You can be on the ground in trenches and on the defensive or super flying in a spaceship.
Need for distinguished mindsets: As an example, there are conventional mindsets that are found usually in strategy formulation teams, but there are also distinguished mindsets that make breakthrough strategy of high caliber, i.e. WOW strategies. Attaining a breakthrough strategy and making a quantum leap into the future are not realizable without the right mindsets in place. Although mindsets are not everything for this achievement they surely constitute the key components. You need the MAGIC to reach higher levels of a breakthrough strategy, and the mindsets are the main ingredients of this magic. It is with the right mindsets that people open up and this is when they can transform that much easier and realize their full potential. To produce a breakthrough strategy of high quality a bouquet of some 30 special mindsets is needed. You need the right mindsets for creating and living the strategy, i.e. you have to be already living the dream and even beyond, but you need also the mindsets for the actual strategy formulation (planning) process as such.
This is a dynamic process: Another important issue to consider in strategy formulation is that there is an initial stage of divergent thinking, i.e. for producing a big quantity of great ideas, followed by a phase of convergent thinking with focus, for selection of best ideas and making decisions. Without such a perspective of the dynamism of the formulation process it is inconceivable that a WOW breakthrough strategy will materialize.
It is all about asking million questions of all sorts, indeed of the why type, but the thing is you cannot answer the questions without extensive research work and creative power, unless you want to rely solely on the knowledge you have and on your assumptions and hunch, the latter being a recipe for likely disaster.
Research assumes a different dimension with strategy formulation, and it touches every aspect of the process and at every stage and not only the beginning, since suggested concepts need to be developed into the WOW effect and once approved they need to be tested on the ground through research, including the testing of the whole strategy as such, and even experimenting. The making of the Damascene involves adding powder of carbon or carbides and other secret ingredients every time the red mass is forged (hit with the hammer), this at different stages, making the steel even tougher. This powder at every strengthening stage is the research input needed when making a breakthrough strategy. The majority of the questions raised during strategy formulation will require thorough research on the ground, i.e. market intelligence and actual testing, but also some trial and error experimenting, to be adequately and fruitfully answered.
Same goes for creative thinking and innovation. In actual fact the whole strategy and even business is about innovation and constant change. Every activity and phase of the formulation process should demonstrate high levels of creative thinking and innovation, from research and forecasting, strategic analysis, setting goals and defining strategies and options, to regular viability testing, regular development of suggested concepts to reach WOW effect, decision making and commitments, deployment and implementation. A high level of creative thinking is needed in finding the 100+ stimulating strategic questions to ask during formulation, but obviously also in finding the answers. Suggested solutions should demonstrate a high degree of lateral thinking with a bouquet of options as a rule. Brainstorming is only one of the many tools used to ignite innovative strategic ideas. As mentioned earlier, research is crucial for creative input and inspiration. Moreover, one should bring in outside parties to join the formulation team, and it is even better to use a dual team approach (Two separate routes) when breakthrough strategy is sought.
The technique of iterative convergence is very useful in improving the quality of strategic outcome. Two different activities can start simultaneously or in sequence, but they regularly interact to learn from each other and then proceed with added value each time and so on, and both methods go through iterative convergence into something much more unique and valuable than done through one method alone, hence output is much more innovative and beneficial. For instance, this technique can be used between research and creative thinking, but also between defining vision and setting goals, and between the two formulation teams if any.
Forecasting in a very dynamic and crowded business environment is not straightforward and might imply using multiple scenarios and probabilities, indeed the farther we go into the future. It might also imply the need for some diversity and balance to minimize uncertainties and the degree of risk. Forecasting is becoming increasingly difficult but the research tools used are becoming more sophisticated too. Flexibility to cope with unexpected changes, i.e. agility, is becoming crucial for success and survival.
There are also tens of known strategic tools and matrices that help in the formulation of strategy, as with the many tools and techniques used in the making of the Damascene sword. It is important not to rely on one single tool. Tools are meant to inspire, e.g. to ask the right questions, and should NOT be seen as the ultimate purpose of the whole thing. This applies to strategic management systems too.
Overall, it is imperative to know that formulating strategy is definitely NOT a routine exercise that can be accomplished swiftly and alone, certainly when seeking a quantum leap outcome reminiscent of the uniqueness of the Damascene sword.
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"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu
For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.
These frameworks include Porter's Five Forces, BCG Growth-Share Matrix, Greiner's Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.
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About Dr. Stephen SweidDr. Stephen M. Sweid, founder of Cinnosys, is a business and innovation consultant and trainer, with over 20 years consulting experience on the international scene: Europe, USA, Middle East, and Far East. He has involved as expert consultant in technical assistance projects of international organizations as well as in consulting projects commissioned by multinationals. He is also an author on Flevy, specializing in breakout strategy methodologies: view his documents here.
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