White Paper 10:
Strategy Prototyping Part 2: What Can Help?
A New Way Of Thinking
Corporations have strategic planning departments staffed by analysts
who work with top executives to develop direction. The more
traditional approach used in business is to develop plans that are
highly analytical and data-driven, producing projections and measurable
consequences which eventually serve as targets for success. Based
on these analytics, executives choose a direction which appears to
have the most potential for success. For example, a widget
manufacturer contemplating new products might analyze the current
market, the competitors, and, using assumptions embodied in a
quantitative model, create objectives for a new product to achieve. In a
way, success is calculated, and if it is achieved in reality, it is a “win”.
The emphasis here is on being right about the choice made by
removing or accounting for as many elements of risk as possible. This
process incorporates the familiar “SWOT” analysis (Strengths,
Weaknesses, Opportunities, Threats) which turns these attributes of an
organization into quantitative concepts.
In recent years, corporations have seen the need to become more
innovative more often and more quickly to compete successfully. As a
result, insightful and entrepreneurial ideas using technology and
different business models designed to intentionally disrupt the
marketplace have become highly successful. These new ways of
thinking about business direction are based on more than analytical
thinking and quantitative models. These new developments—for
example, the emergence of a completely new music industry, the
spawning of new businesses based on digital photography, even the
creation of for-profit higher education to name only a few—are the
result of inspiration, creativity and vision. Successful corporations are
finding it critical to leap to new idea development, transforming these
into new market directions rapidly and aggressively. In this approach,
there are no guaranteed successes; failure is viewed as a cost of
learning and an opportunity to try again from a new perspective.
This shift in thinking opens a whole new way to approach strategic
planning for all organizations. Frankly, the analytical SWOT-type
approach doesn’t fit a smaller, resource constrained business or larger
organizations in a hurry to remain competitive. The danger to strategic
thinking in any organization is becoming hamstrung in volumes of
analysis.
Instead, organizations need a process that captures the energy and
commitment of executive, managers, employees and even board
members, a process that lends itself to holistic thinking, intuition,
resourcefulness, making sense and creativity and builds consensus at
the same time. As Daniel Pink points out in A Whole New Mind:
What is in greatest demand today isn’t analysis but in synthesis,
recognizing patterns, crossing boundaries to uncover hidden
connections and making bold leaps of imagination.
This approach to strategy adds another important dimension to
organizations: speed. Instead of a year-long process, “bold leaps of
imagination” and the subsequent discussions and planning that result
can literally take a few weeks. As Malcolm Gladwell describes in Blink,
“Decisions made very quickly can be every bit as good as decisions
made cautiously and deliberately.”
What process makes sense for organizations in dynamic markets? What
would put intuition to work? What would allow stakeholders in these
organizations to tap into the organization’s identity and history and
project it forward? How can consensus be gained efficiently? We
believe a way to capture these ideas is through prototyping alternative
futures.
The Prototyping Approach: From The Back Of A Napkin To Strategic Plan
A prototype is an early expression of an idea. Prototypes are sketches
with deliberately few or no details, high level conceptual models that
demonstrate how an idea can work; a prototype is a tangible, concrete
representation. So, in a sense, a prototype is a working model that can
be set in motion, examined, not in the abstract, but by conceptually
looking at actual operations that are easy to grasp.
In prototyping strategies, the future of an organization can be
described and illustrated using a variety of techniques. Regardless of
the form the prototype takes, it represents a relatively clear view of
what the organization can be. When there are multiple prototypes
representing a range of options, stakeholders can view and discuss
each one in terms of how it might operate, who it might serve, how it
will be funded, etc.
Discussing a prototype is different than discussing an idea or even an
intention. While a prototype isn’t complete, it does present a shape,
something to speak to with a higher level of detail and clarity than an
idea or table of numbers. In addition, a prototype has trace
persistence, that is, it lasts longer in people’s minds than an idea
mentioned in a discussion, and it resides in descriptive, tangible visual
form on a flip chart illustration or diagram.
In organizations, these prototypes are developed by working with key
stakeholders in a meeting setting. This prototype development group
needs to be small, knowledgeable about the organization and its
market, and with a certain sense of the organization’s history. This
discussion may be stimulated by a facilitator asking such questions as:
If we keep doing what we do now, how will we be successful? How will
we know?
What else—new products/services could we do to add value to our
current customers? What makes the most sense, based on who we are?
What if we took what we do very well now and approach new
customers? What would that look like?
What if we brought new products/services to new customers? What and
who could they be?
What if we delivered what we do differently? What would that look like?
Other kinds of questions are possible, depending on the type of
organization. Input from others not at the table can be gathered in a
discussions or surveys before this core group meeting. The point of
this discussion is to express ideas that these informed groups—and
involved stakeholders--already have, unspoken and even unconscious
ideas about how the organization can grow. When these intuitive ideas
are tapped in a systematic way, prototypes of the future emerge.
For example, in working with a non-profit organization, a core group of
staff and board members said one future prototype would be to do
exactly what it is doing now, only better, with improved processes and
outcome measures. That concept had been on the minds of many
people in the organization, and now it had found expression in a
prototype. After discussion of what other demographics the
organization can serve, it became clear that there were ideas of taking
the organization’s processes and duplicating them elsewhere with a
new audience. Finally, the group proposed that the organization could
add collaborative processes with other charitable organizations as a
new service to repertoire, becoming yet a third prototype of the future.
A financial services company used a different approach. Instead of
having a core group develop alternative prototypes, the Chief
Executive Officer was able to literally draw pictures of three different
directions the organization could take. This became the core of a
series of discussions with the executive group, which resulted in
agreement on a direction. Detailed planning followed.
This process also accommodates creative, out-of-the-box ideas as well
as the more predictable. Any idea is fair for building into a prototype as
it will be tested and filtered through the lens of feasibility and alignment
with the organization’s mission as the process moves to the next phase.
When these prototypes are complete, the process shifts to testing and
vetting with a larger audience of stakeholders. That group could mean a
board of trustees, selected executives, or the next line of
management. The process in this forum is to present each prototype in
turn and ask for reactions in a highly structured way: “What do you
like?””What else could we do here?”, and “What questions does this
raise?” In discussing each simple question in turn for each prototype, a
consensus begins to emerge. The prototypes themselves change into
more refined forms; ideas are added, aspects of different prototypes
clearly become favored or discounted. The group process shifts to
looking at what it would take to pursue the two or three directions that
have emerged. A different set of questions is used to bring the idea
down to a more tactical reality: “What assumptions have we made?”
“What do we know and not know about how this will work?”
Strategy prototyping as described here has its conceptual roots in the
Scientific Method. The scientific process capitalizes on the reservoir of
knowledge in a particular field; skilled and knowledgeable researchers,
intimately and holistically familiar with this knowledge base, generate
working ideas and hypotheses by asking what-if questions. These
hypotheses can be tested for veracity or effectiveness in a rigorous
way.
Similarly, in developing a strategy prototype, a knowledgeable core
group can posit different business models or even variations of a
model and project the impact of these on cost, effectiveness, risk,
resources, donor base and the like. The result is a sense of what might
work and what unknowns still need to be answered. In a sense, a
strategy prototype is like a “mind experiment” of trying on alternatives
and assessing results.
When a set of prototypes are analyzed, the core group comes to
agreement on a sense of direction, based on what models are most
appealing at this early stage. The process goes on to exploring what it
would take to put the ideas to work.
Implementation Planning: The Next Step Is Tactical
Once general directions—based on discussion of the prototypes--are
identified through this process, tasks groups are formed around key
planning questions that need to be answered:
Does the direction match and reinforce our current mission?
What’s the best way of doing this?
What capabilities do we need to add or develop to actually do this?
What would make this worth doing? Would benefits outweigh risks?
What would be the ultimate impact of this work on our mission?
Task groups work in parallel over a matter of weeks on answering these
implementation-oriented questions. For example, one task force might
look at what an “improvement of existing processes” would take to put
to work. Another would identify steps needed to “form strategic
alliances”. Each task force would have to create a set of
recommendations for the core group to consider. It is helpful for each
implementation team to consider variations on how it strategic initiative
might look. For example, the collaboration team might consider three
different models of alliances—leadership, client or partner. They can
then test each in terms of capabilities, value to the organization and
impact. In this way, the prototyping concept—creating rough sketches
of how the end might look—can help focus and clarify the choices being
considered in tactical implementation planning.
What is interesting is that these recommendations are not primarily
about direction, but tactical implementation. Annual plans and
objectives for each initiative can be immediately put to work. So, these
plans become an agenda for the board and management to monitor on a
regular basis. The strategic plan becomes a living, working concept
which is brought forward and used to guide everyday activities.
What Prototyping Strategies Does
Using a prototyping approach gives stakeholders in organizations a
sense of urgency and control over the strategic planning process. The
process is designed to stimulate and leverage intuition and creativity,
producing a series of increasingly more refined models. Ideas are
described in concrete terms; obstacles and opportunities can be put
into motion, tested and their impact envisioned and imagined. There is
still an important place for analysis and quantitative thinking in the
planning process, when decisions have to be made about how, why and
what results should be expected.
The prototyping approach offers a timely and robust vehicle for any
organization to reach for the future. Because of the need for
conceptual clarity and alignment, the process is designed to optimize
consensus and open discussion, ensuring that the ideas and directions
developed through this process are implemented as planned. The
execution of the strategic plan on a regular, weekly basis through
programs, projects and processes is the ultimate test of success.
When the process is designed to promote understanding, support and
buy-in, enthusiastic and compliant execution is much more likely.
References
David J. Collis and Michael G. Rukstad, “Can You Say What Your
Strategy Is?”, Harvard Business Review, April 2008.
Malcolm Gladwell, Blink, Back Bay Books, 2005
Daniel Pink, A Whole New Mind, Riverhead, 2005
Strategy Prototyping Part 2: What Can Help?
A New Way Of Thinking
Corporations have strategic planning departments staffed by analysts
who work with top executives to develop direction. The more
traditional approach used in business is to develop plans that are
highly analytical and data-driven, producing projections and measurable
consequences which eventually serve as targets for success. Based
on these analytics, executives choose a direction which appears to
have the most potential for success. For example, a widget
manufacturer contemplating new products might analyze the current
market, the competitors, and, using assumptions embodied in a
quantitative model, create objectives for a new product to achieve. In a
way, success is calculated, and if it is achieved in reality, it is a “win”.
The emphasis here is on being right about the choice made by
removing or accounting for as many elements of risk as possible. This
process incorporates the familiar “SWOT” analysis (Strengths,
Weaknesses, Opportunities, Threats) which turns these attributes of an
organization into quantitative concepts.
In recent years, corporations have seen the need to become more
innovative more often and more quickly to compete successfully. As a
result, insightful and entrepreneurial ideas using technology and
different business models designed to intentionally disrupt the
marketplace have become highly successful. These new ways of
thinking about business direction are based on more than analytical
thinking and quantitative models. These new developments—for
example, the emergence of a completely new music industry, the
spawning of new businesses based on digital photography, even the
creation of for-profit higher education to name only a few—are the
result of inspiration, creativity and vision. Successful corporations are
finding it critical to leap to new idea development, transforming these
into new market directions rapidly and aggressively. In this approach,
there are no guaranteed successes; failure is viewed as a cost of
learning and an opportunity to try again from a new perspective.
This shift in thinking opens a whole new way to approach strategic
planning for all organizations. Frankly, the analytical SWOT-type
approach doesn’t fit a smaller, resource constrained business or larger
organizations in a hurry to remain competitive. The danger to strategic
thinking in any organization is becoming hamstrung in volumes of
analysis.
Instead, organizations need a process that captures the energy and
commitment of executive, managers, employees and even board
members, a process that lends itself to holistic thinking, intuition,
resourcefulness, making sense and creativity and builds consensus at
the same time. As Daniel Pink points out in A Whole New Mind:
What is in greatest demand today isn’t analysis but in synthesis,
recognizing patterns, crossing boundaries to uncover hidden
connections and making bold leaps of imagination.
This approach to strategy adds another important dimension to
organizations: speed. Instead of a year-long process, “bold leaps of
imagination” and the subsequent discussions and planning that result
can literally take a few weeks. As Malcolm Gladwell describes in Blink,
“Decisions made very quickly can be every bit as good as decisions
made cautiously and deliberately.”
What process makes sense for organizations in dynamic markets? What
would put intuition to work? What would allow stakeholders in these
organizations to tap into the organization’s identity and history and
project it forward? How can consensus be gained efficiently? We
believe a way to capture these ideas is through prototyping alternative
futures.
The Prototyping Approach: From The Back Of A Napkin To Strategic Plan
A prototype is an early expression of an idea. Prototypes are sketches
with deliberately few or no details, high level conceptual models that
demonstrate how an idea can work; a prototype is a tangible, concrete
representation. So, in a sense, a prototype is a working model that can
be set in motion, examined, not in the abstract, but by conceptually
looking at actual operations that are easy to grasp.
In prototyping strategies, the future of an organization can be
described and illustrated using a variety of techniques. Regardless of
the form the prototype takes, it represents a relatively clear view of
what the organization can be. When there are multiple prototypes
representing a range of options, stakeholders can view and discuss
each one in terms of how it might operate, who it might serve, how it
will be funded, etc.
Discussing a prototype is different than discussing an idea or even an
intention. While a prototype isn’t complete, it does present a shape,
something to speak to with a higher level of detail and clarity than an
idea or table of numbers. In addition, a prototype has trace
persistence, that is, it lasts longer in people’s minds than an idea
mentioned in a discussion, and it resides in descriptive, tangible visual
form on a flip chart illustration or diagram.
In organizations, these prototypes are developed by working with key
stakeholders in a meeting setting. This prototype development group
needs to be small, knowledgeable about the organization and its
market, and with a certain sense of the organization’s history. This
discussion may be stimulated by a facilitator asking such questions as:
If we keep doing what we do now, how will we be successful? How will
we know?
What else—new products/services could we do to add value to our
current customers? What makes the most sense, based on who we are?
What if we took what we do very well now and approach new
customers? What would that look like?
What if we brought new products/services to new customers? What and
who could they be?
What if we delivered what we do differently? What would that look like?
Other kinds of questions are possible, depending on the type of
organization. Input from others not at the table can be gathered in a
discussions or surveys before this core group meeting. The point of
this discussion is to express ideas that these informed groups—and
involved stakeholders--already have, unspoken and even unconscious
ideas about how the organization can grow. When these intuitive ideas
are tapped in a systematic way, prototypes of the future emerge.
For example, in working with a non-profit organization, a core group of
staff and board members said one future prototype would be to do
exactly what it is doing now, only better, with improved processes and
outcome measures. That concept had been on the minds of many
people in the organization, and now it had found expression in a
prototype. After discussion of what other demographics the
organization can serve, it became clear that there were ideas of taking
the organization’s processes and duplicating them elsewhere with a
new audience. Finally, the group proposed that the organization could
add collaborative processes with other charitable organizations as a
new service to repertoire, becoming yet a third prototype of the future.
A financial services company used a different approach. Instead of
having a core group develop alternative prototypes, the Chief
Executive Officer was able to literally draw pictures of three different
directions the organization could take. This became the core of a
series of discussions with the executive group, which resulted in
agreement on a direction. Detailed planning followed.
This process also accommodates creative, out-of-the-box ideas as well
as the more predictable. Any idea is fair for building into a prototype as
it will be tested and filtered through the lens of feasibility and alignment
with the organization’s mission as the process moves to the next phase.
When these prototypes are complete, the process shifts to testing and
vetting with a larger audience of stakeholders. That group could mean a
board of trustees, selected executives, or the next line of
management. The process in this forum is to present each prototype in
turn and ask for reactions in a highly structured way: “What do you
like?””What else could we do here?”, and “What questions does this
raise?” In discussing each simple question in turn for each prototype, a
consensus begins to emerge. The prototypes themselves change into
more refined forms; ideas are added, aspects of different prototypes
clearly become favored or discounted. The group process shifts to
looking at what it would take to pursue the two or three directions that
have emerged. A different set of questions is used to bring the idea
down to a more tactical reality: “What assumptions have we made?”
“What do we know and not know about how this will work?”
Strategy prototyping as described here has its conceptual roots in the
Scientific Method. The scientific process capitalizes on the reservoir of
knowledge in a particular field; skilled and knowledgeable researchers,
intimately and holistically familiar with this knowledge base, generate
working ideas and hypotheses by asking what-if questions. These
hypotheses can be tested for veracity or effectiveness in a rigorous
way.
Similarly, in developing a strategy prototype, a knowledgeable core
group can posit different business models or even variations of a
model and project the impact of these on cost, effectiveness, risk,
resources, donor base and the like. The result is a sense of what might
work and what unknowns still need to be answered. In a sense, a
strategy prototype is like a “mind experiment” of trying on alternatives
and assessing results.
When a set of prototypes are analyzed, the core group comes to
agreement on a sense of direction, based on what models are most
appealing at this early stage. The process goes on to exploring what it
would take to put the ideas to work.
Implementation Planning: The Next Step Is Tactical
Once general directions—based on discussion of the prototypes--are
identified through this process, tasks groups are formed around key
planning questions that need to be answered:
Does the direction match and reinforce our current mission?
What’s the best way of doing this?
What capabilities do we need to add or develop to actually do this?
What would make this worth doing? Would benefits outweigh risks?
What would be the ultimate impact of this work on our mission?
Task groups work in parallel over a matter of weeks on answering these
implementation-oriented questions. For example, one task force might
look at what an “improvement of existing processes” would take to put
to work. Another would identify steps needed to “form strategic
alliances”. Each task force would have to create a set of
recommendations for the core group to consider. It is helpful for each
implementation team to consider variations on how it strategic initiative
might look. For example, the collaboration team might consider three
different models of alliances—leadership, client or partner. They can
then test each in terms of capabilities, value to the organization and
impact. In this way, the prototyping concept—creating rough sketches
of how the end might look—can help focus and clarify the choices being
considered in tactical implementation planning.
What is interesting is that these recommendations are not primarily
about direction, but tactical implementation. Annual plans and
objectives for each initiative can be immediately put to work. So, these
plans become an agenda for the board and management to monitor on a
regular basis. The strategic plan becomes a living, working concept
which is brought forward and used to guide everyday activities.
What Prototyping Strategies Does
Using a prototyping approach gives stakeholders in organizations a
sense of urgency and control over the strategic planning process. The
process is designed to stimulate and leverage intuition and creativity,
producing a series of increasingly more refined models. Ideas are
described in concrete terms; obstacles and opportunities can be put
into motion, tested and their impact envisioned and imagined. There is
still an important place for analysis and quantitative thinking in the
planning process, when decisions have to be made about how, why and
what results should be expected.
The prototyping approach offers a timely and robust vehicle for any
organization to reach for the future. Because of the need for
conceptual clarity and alignment, the process is designed to optimize
consensus and open discussion, ensuring that the ideas and directions
developed through this process are implemented as planned. The
execution of the strategic plan on a regular, weekly basis through
programs, projects and processes is the ultimate test of success.
When the process is designed to promote understanding, support and
buy-in, enthusiastic and compliant execution is much more likely.
References
David J. Collis and Michael G. Rukstad, “Can You Say What Your
Strategy Is?”, Harvard Business Review, April 2008.
Malcolm Gladwell, Blink, Back Bay Books, 2005
Daniel Pink, A Whole New Mind, Riverhead, 2005
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