You have probably noticed the rash of news articles about how the COVID lockdown has had some unexpected environmental benefits, from reduced asthma to increased butterfly populations.
Biologists look for such changes because evolution is, of course, all about adaptation to a changing environment. The same goes for management scientists who look for how companies adapt to changes in their environment.
For someone like me who studies how strategies and business models evolve, the COVID lockdown has been as exciting as reduced pollution has been to those lepidopterists who study butterflies. It turns out that lockdown can improve how companies create strategy. As usual, let’s take a short cut to some practical recommendations via some management research.
Strategy is a social process
Strategic planning processes information about the market and the company into decisions about where and how to spend time and money. Beneath superficial differences of jargon and techniques, all companies are trying to do the same thing: make sense of the market and agree on what to do. If you have ever moved from one company to another, you will have noticed the differences in the details but also the similarities in the substance.
But the really interesting thing about how firms make strategy is that it is both a technical procedure and a social practice. Running alongside the explicit, prescribed methods are implicit, unwritten habits that are just as important. For example, before data and information is collected, there is a tacit agreement about what we need to know and what we don’t.
When segmentation is developed, it rests on often unspoken agreement about things like the role of the patient in the decision. When strategic options are chosen, the choice must necessarily consider business risk, yet tolerance to risk is usually assumed without open discussion. In other words, the explicit planning process, which normally happens during meetings, is reliant on implicit practice that happens in corridors, at lunch tables and at the coffee machine.
And, importantly, while we put lots of effort into getting the explicit process right, we give relatively little thought to its complementary, implicit shadow-process. But now working from home means that we must. The corridors are empty, we eat lunch with our family and drink coffee with the dog.
This change has relatively little impact on explicit strategy-making procedures but can and does hinder the implicit, but no less important, strategy socialisation process. Worse still, because we’ve ticked all the boxes and completed all the templates of the explicit process, we don’t notice issues with the social process.
Two important lessons
If we are to counteract the effects of social distancing on strategising we need to understand it better. Fortunately, we can draw specific lessons from two related counterexamples: when teams that are geographically separated succeed in creating strong strategy and when strategy processes break down, even in socially-proximate situations. Studying those situations reveals two important lessons.
Firstly, the big negative of socially distanced strategising is low-fidelity communication. With less non-verbal communication, fewer side conversations and often imperfect technology, assumptions are left unchallenged and questions are left unasked. These negatives are amplified by language differences, not only between countries but also between functions.
Do your medical affairs colleagues really mean the same thing when they say ‘segment’? When your marketing colleague says ‘patient-centric strategy’, do you ask how it differs from ‘customer-focused’ or ‘market led’? But a shared lexicon and succinct, effective techniques for challenging assumptions can greatly improve communication at a distance.
Secondly, the major advantage of socially distanced strategising is that it allows for differences in how team members like to think. Meetings favour those who think by talking but they tend to suppress reflective introverts.
Consequently, quick but flawed thinking is favoured over slower, deeper reflection. These negatives are amplified by time pressure and strong personalities. How often do your meetings contain periods of quiet reflection? How often do you bite your tongue because you are afraid to share a half-formed idea? But, managed correctly, introverts can think clearly in isolation and then bring their valuable ideas to meetings.
Socially distanced opportunities
I learned these lessons by observing firms that have adapted well to socially distanced strategising, that have learned to mitigate low-fidelity communication and to capitalise on different thinking styles. I’ve uncovered many practical techniques for doing this, from agreeing on robust definitions of key terms to novel processes for constructively challenging implicit assumptions.
I’m particularly impressed by those firms that allow introverts and extroverts to prepare separately for key meetings by asking them to answer carefully thought out, strategically important questions. There’s no doubt that social distancing is a new threat to most firms’ traditional strategy processes. But it’s also an opportunity to adapt to and improve in the new normal.
Professor Brian D Smith works at SDA Bocconi and the University of Hertfordshire. He is a world-recognised authority on the evolution of the life sciences industry and welcomes questions at brian.smith@pragmedic.com