Stay out of the Dark Room by Lisa Carlin and Dr Norman Chorn, 2021. Lisa and Norman say: Move out of the dark room, and take an open, participative, agile approach to strategy development, and strategy execution.
To stay relevant in our fast changing post-Covid world, organisations need a nimble, agile approach to strategy and innovation. It is difficult to know how to do this in the new world of work which is more democratised, more digital and more confusing than ever. Most important is to STAY OUT OF THE DARK ROOM.
Today, I’m pleased to share with you an article written by Dr Norman Chorn and myself, recently updated. It outlines 4 features of an agile approach to strategy and innovation, which is an important trend in the future world of work.
Stay out of the DarkRoom
An agile approach to strategy
STRATEGY AND INNOVATION ARE FAILING
Before Covid, research studies generally found that the way we practice strategy failed around 50-80% of the time. In our original 2014 article “stay out of the dark room” we observed that strategy formulation was often separate to strategy execution, which led to a number of disconnects, and low staff engagement. We argued for the need to get out of the “dark room” of strategy formulation, and instead approach this as a participative activity with people at all levels of the organisation.
Since the pandemic, we need to make decisions rapidly as the environment has become more unpredictable and unstable. This means an even faster approach to strategy and innovation is required. It has become trendy to write about “the new normal”, the “futureworld of work”, the requirement for “agility in the post-Covid era. We don’t have the luxury of extended periods of consultation, but yet we believe it is even more critical to involve staff in the strategy process. What does this mean for the approach to strategy and innovation?
WHY WE CAN’T GO BACK TO DARK ROOM STRATEGY?
Picture a small strategy team beavering away in their war room, developing strategy PowerPoints, and finalising recommendations in an iterative process with the board and executive. This is the traditional “dark room” approach. Execution only begins once recommendations are ratified, often with a delayed start, in a separate phase, often by a different team.
This is an outdated and flawed approach, with 3 issues described in previous research:
An incomplete diagnosis of the situation occurs where the information gathering and analysis fails to account for the diversity of views and expertise that exist in a complex organisation. In fast-moving and uncertain environments, it is inconceivable that a few carefully selected people, no matter how skilled and talented they are, can capture the richness of information necessary to understand complex situations.
An incoherent picture of the strategy occurs when staff are not involved in the diagnosis of the situation The all-important rationale (“why”) behind strategy can get lost. Leaders are then obliged to try and “sell” the strategy to the rest of the organisation (after the recommendations are endorsed) through all the noise, uncertainty and angst created by the new strategy. This is usually associated with high levels of misunderstanding and cynicism. This, in turn, leads to fear and resistance through the organisation.
Low staff engagement with the organisation and strategy happens as human brains react negatively to threats of social exclusion, reduced status and fairness. As we now know that if staff are isolated from the strategy process, their discretionary effort and productivity falls.
Alarmingly, this negative impact is heightened amongst knowledge workers – leaders are likely to get only grudging acceptance when they announce a new strategic direction after emerging from the “dark room”.
AN AGILE APPROACH TO STRATEGY
An agile approach to strategy has 4 key elements:
An open strategy development process immerses a representative cross-section of people within the organisation. This is opposite to the traditional “dark room” approach, where the strategy is only communicated widely only after it has been endorsed by the Board.
A many-to-many, synchronous communication approach occurs between those responsible for developing the strategy, and the rest of the organisation. Traditional approaches are asynchronous, one-to-many communications such as a business analyst conducting data gathering interviews, or a facilitator conducting staff focus groups at periodic intervals to gather intelligence. Those responsible for developing the strategy then disappear for weeks or months back into their “dark room” to assimilate the information they have collected, and develop recommendations. In contrast, a synchronous communications approach is not periodic; it is an ongoing working methodology with staff at different levels, who are participating in various working groups, working concurrently on developing and implementing different ideas, with coordination by a core project team in a many-to-many relationship. In Design Thinking parlance, this is a co-designed approach.
A seamless integration between strategy formulation and execution phases is noticeable through iterative rollouts that Agile Project Management calls sprints. Ideas are trialled through small-scale, low-risk pilots, which means some execution of ideas is happening concurrently with formulation of other ideas. This removes the artificial divide between formulation and execution phases, and again speeds up execution.
Digital platforms offer a number of tools that speed up this process, most of which can be used in hybrid work environments. This includes:
Engagement tools such as CultureAmp, Pyn and Lattice.
SkillsTech tools that help businesses build a competency framework, such as Skills-Base
EdTech tools that help train the working groups fast such as HowToo, LearnUpon, ANewSpring and EdApp.
Productivity and communications tools such Slack, MS Teams.
It is an exciting time in the digital world and there are typically hundreds of tools in each category, each suitable for different purposes.
The two approaches are summarised in the following table:
Thinking vs doing
Thinking by senior execs
Doing by rest of organisation
Thinking and doing done interdependently by many people in organisation
Closed, ‘dark room’
Open, transparent, co-designed
Set beforehand – usually at the top
Emerge from the process – many involved
Linear sequential (waterfall) project management, not well integrated
Manual approach supported by basic tech productivity tools
Digital platforms and HR Technology
Staff are consulted
Strategy is pushed
Staff are engaged in working groups
Strategy is pulled
HOW DO WE INVOLVE STAFF AND SPEED UP THE CYCLE?
To balance involvement and speed, staff are are invited to join working groups with carefully architected responsibilities, that contribute in a meaningful way to the strategy development and execution. They have a shared responsibility with the core project team for generating a work product and outcome. This means the core project team are relinquishing some of their control of the outcome to the working groups, but still mentoring and guiding the teams through their work. This enables the core team to leverage their efforts considerably, and get accelerated results.
By moving out of the dark room to an agile approach complemented by digital technology, organisations can be more nimble and flexible, enabling faster responses to market conditions. Staff participating in the strategy formulation process are already modifying their work to fit with the new direction. It creates a tide of enthusiasm, a ‘buzz’ that generates a critical mass in the organisation without management needing to ‘sell’ the new direction. It is a pull rather than a push approach.
Different perspectives can be tapped throughout the organisation, which generates better quality data and decision making in a world of uncertainty, with an abundance of information, and a diversity of views.”
Lisa Carlin works with ambitious digital leaders to turbo-charge their business, cultural and digital transformation. Those working with Lisa have an independent sounding board and expert advice so they have absolute confidence they WILL ACHIEVE THEIR GOAL. Lisa is Co-Founder and Director of FutureBuilders Group of organisational development specialists, Chair of the University of Cape Town Australia Trust, and on the Advisory Board of Rebelliuz, the Tiktok for jobs. Lisa runs an Organizational Development Community exploring leading edge ideas in digital transformation, culture change and business innovation. Her early career was with Accenture (South Africa) and McKinsey (USA). focus on accelerating growth, transformation and scale ups through behavioural expertise. Her portfolio of work includes advisory boards and business mentor to Founder/CEOs in the HRTech, EdTech and workplace learning sector. Prior to establishing her own consultancy in 1999, she worked with global consulting firms including McKinsey & Co and Accenture.
Dr Norman Chorn is a strategist and organisation development consultant. He works with executives and organisations to develop future strategy and organisational capability. His particular areas of focus are setting strategy for uncertain futures, and developing the resilient and adaptive organisation.