Do you really know the winning conditions of your strategy?

It is critical to master the success conditions of your strategic choices and ensure they remain true. Too often, strategic choices are made, priorities are set, and then the organization immediately moves into operational mode. The strategy, initially galvanizing, quickly becomes a "shelved" document, disconnected from the reality on the ground.

Yet, specific conditions allowed these choices to be established. Without sustained attention, they can quickly evolve and invalidate the initial choices.

The impact: a difficult operating context, results far from expectations, and a significant risk to the organization's survival. The case of South Shore Furniture echoes this dynamic (La fermeture de Meubles South Shore comme signal d’alarme - LaPresse).

When formulating a strategy, it is crucial to identify the most uncertain success conditions, to test and validate them. This approach strengthens the robustness of your decisions.

To achieve this, here are the three elements to consider.

Identify Critical Assumptions

Roger Martin reminds us that Where to Play and How to Win represent the core of strategy.

The choices that characterize a winning strategic option require mastering its success conditions. These are the elements that must be true for the strategy to succeed.

Faced with this necessity, some elements are known and mastered, while others remain assumptions. The latter implies a degree of uncertainty that must be clarified.

We must ask the fundamental question: What would have to be true? It is necessary to identify the critical assumptions concerning:

• Clients and their job-to-be-done.
• Competitors.
• the organization.
• The global environment.

Among these elements, it is essential to explore the most important ones for which uncertainty is high. These are the "barriers" to our choices.

Test Assumptions and Reduce Risk

By prioritizing the most important barriers, we must gain certainty by conducting tests and validating assumptions.

These tests, initially low-resolution, will increase in complexity as they are validated. The goal is to ensure that short, iterative loops are carried out to support strategic reflection.

By validating or refuting the assumptions, your strategic options gain in robustness.

For example, during an engagement with one of our clients who wished to expand their services into a new territory, we rigorously explored twelve different assumptions, including:

• Clients: Do the targeted clients have the same jobs-pains-gains as our current clients? Does the level of demand justify an additional offering?
• Value Proposition: Do the service offering and our competitive advantage adequately meet the specific needs of this new market? Is there a significant gap in value criteria compared to competitors' offerings?
• Organization: Do we have the necessary internal resources for execution? Can we recruit enough people with the required skills?

The structured evaluation of assumptions thus made it possible to assess the risks associated with the strategy and led to informed discussions within the board of directors to finalize the decision.

Observe Weak Signals and Anticipate Adaptation

Strategy does not evolve in a static context. It is vital to conduct periodic monitoring to ensure that conditions remain true.

Influencing conditions can evolve. Customer behavior may change, competitors may implement new strategies or innovations, or the economic conditions of the arena may be disrupted.

Consequently, the initial strategic choices may be at risk. By observing the various weak signals associated with these choices and reviewing them with the management team, it is possible to adapt the strategy if necessary.

These reviews rely on clear routines and responsibilities. Let us recall how advantageous it is to rely on the organization’s collective strategic thinking to facilitate and accelerate the processing of key signals.

Next Steps

• During your next strategic review, formally identify the conditions under which your choices are true.
• Be clear about the conditions that could influence and jeopardize your strategic choices.
• Assign responsibility for monitoring these weak signals to a team member.
• Allocate a dedicated review space during your management committee meetings.

Key Question

Who, in your organization, is responsible for observing, analyzing, and guiding the team toward proactive adaptation before the crisis sets in?

Have a great week,

Eric L’Heureux

P.S. To go further:

• Is Your Strategy Already Obsolete?
• Playing to Win: How Strategy Really Works (Roger L. Martin, 2013)
• Creating Great Choices: A Leader's Guide to Integrative Thinking (J.Riel, R.L.Martin, 2017)