Inside Out Strategy

Building differentiated strategy from within

In my late 20s, I decided to pursue a degree called Design Strategy, which was essentially a design degree and an MBA rolled into one. Within a very short period of years, this unique skill set became the foundation of what the business world hungrily termed innovation.  

Innovation is most simply described as the creation of new organic value -- not M&A, not line extensions, but fundamentally something new and better that delivers value to the company and to the customer. 

I spent a lot of my early career in corporate innovation, initially as a consultant, then from the inside, helping large orgs define innovation and build capabilities and infrastructure needed to support it. 

It was while I was in this former role, that I had lunch one day with a VP of Strategy at a major broadcast television network, who was lamenting the process of how strategy was built at his organization. His job was generally focused on new programming, and his team’s role every quarter was to develop and communicate the strategic plan for new programming. He was frustrated because this process always involved the same small set of stakeholders who would meet in a room for hours on end, and ultimately produce a plan that looked only marginally different from the previous quarters.  Meanwhile, the old school television industry was being disrupted left and right by new entrants like Netflix, Amazon, YouTube and others. 

The VP of Strategy was insightful though. He was sure that there plenty of folks across the organization in roles big and small who had potentially new ideas or feedback that was more fresh and relevant  -- or even just plain different -- than those of the folks typically sitting in that strategy room.  Yet despite his suspicion, he readily admitted to being stuck in the “way things are.”  
Unfortunately, a similar sense of paralysis can be found in most enterprise organizations. 

Every organization today, despite its past or current success, faces 3 mortal challenges:
 

1. Disruption. In 2016, IMD and Cisco produced a report that asserted any company in any industry was 3.1 years away from a digital disruption. This squares with data from Innosight, which predicts that  3/4 of today’s S&P 500 companies would be replaced by 2027.  In the time since those reports were published, we’ve seen it happen numerous times, as cab drivers were replaced by ride sharing services like Uber and Lyft, major retailers like JC Penny gave way to Amazon and Zappos, and hometown real estate agents found themselves up against Trulia. There are countless examples. 
 

 

2. Constant Change. Anyone who has spent any degree of time in the workplace knows this adage to be true. Just think about the frenetic cycle of new leaders, restructuring, digital transformations, M&As, and global expansion that a typical enterprise organization experiences.  In fact, as once explained by Jack Welch, if the rate of change on the outside of the organization exceeds the rate of change on the inside, then the end is near.
 

 

3. Talent Mobility. I'm certain that most of the readers of HR.com are presented daily with the challenge of attracting and retaining great people. According to a 2018 Qualtrics survey, on average, top performers receive 4.3 job offers a year, and 88% respond, even if they have plenty of growth opportunity and things are going relatively well. According to a recent research pulse conducted by Waggl and Next Concept HR Association (NCHRA), 80% of HR professionals agree that their organizations would run more smoothly and productively if they could only find a way to hold on to their best workers.   Most businesses have felt the pain of employee turnover at some point. If the root causes of those isolated incidents are not explored and addressed, those departures can turn into a slow leak of talent, coupled with a nagging sense that the remaining team is no longer as vital as it once was.

These three challenges are not minor.  Navigating them requires sophisticated and thoughtful strategies.

Where Does Strategy Come From?
The question is, where does strategy come from? The answer to that question varies from organization to organization, but there are three basic models. 


 

 

A third option is what I call Inside Out Strategy.  This option literally leverages the unique strengths of every person inside the organization by drawing upon real-time insight, fresh perspective, and tangible knowledge from the entire employee base. One of the key advantages of this approach is that it provides localized and highly actionable knowledge.  If you can mobilize this kind of exchange of collective intelligence, you will transform your business and improve your chances at successfully navigating the 3 mortal challenges.

In a business context, data remains a critical, inextricable input to sound strategy, as it can be enormously helpful in clarifying assumptions, surfacing patterns, and predicting outcomes. In the age of digital transformation, data plays a critical role in all aspects of a business, and HR is no exception. HR leaders need to have a well-developed tech stack that enables them to accomplish their work as quickly and efficiently as possible, while simultaneously adjusting to shifting priorities and developments within the larger organization.  Competitive business advantage often lies in the ability to find the right signals and apply insights quickly.

But data is just the beginning.  Using data as the sole input to strategic planning can be dangerous, because data can be artificially constructed, and may even lead to biased or flawed conclusions.

In a high velocity, data-intense environment, it’s crucial for leaders to spend more time on directing and brokering information and intelligence to the right people.  We must begin by listening more intently and actively, and finding new ways to distill information.  It’s essential for leaders to set time aside to have authentic conversations and to troubleshoot. They need to ask staff “What can I do to make you more productive today? How can I help you succeed today?” 

Authentic inquiry is an approach to learning that begins with the learner's interest and experience, and move gradually toward a publicly agreed-upon assessment criteria.  We engage in this process every time we investigate something that we are naturally curious about.  The process begins with observation, moving into questioning, which eventually leads to a subjective sense of narrative about the person, place or thing that we find fascinating. Eventually, that narrative gives way to a more objective knowledge map” that can be used to make meaning of existing information and connect it to a wider body of knowledge (e.g. scientific, historical, social, psychological, theological, philosophical, etc.).  Authentic inquiry is inherently collaborative and conversational, as it recognizes the power of language in learning and knowledge. When people are provided with a forum to practice authentic inquiry in the workplace by asking questions and investigating topics of interest, it facilitates understanding and openness to change. This practice develops emotional intelligence throughout the entire organization, and paves the way for a different type of leadership – one that is based on trust and mutual respect, rather than outmoded methods of autocratic management. Going back to the VP Strategy at the major broadcast network mentioned earlier in the article, he had the right idea, but unfortunately, his organization didn’t have the right kind of culture to provide the kinds of insights he needed.

In a data-intensive reality where everything seems to be changing faster all the time, fostering a sense of connection between people is more important than ever.  That’s why data needs to be complemented by Authentic Insight, which stems from having a strong internal culture based on mutual respect and trust. Creating a continual cycle of active listening and inquiry leads to a level of Authentic Insight that is uniquely relevant, time-appropriate, and context-bound.  It is literally the pulsing intelligence of the team or organization. 

A successful business strategy needs to be informed by insight, perspective and knowledge. These are things that can’t be automated because they are inherently human, qualitative, and anecdotal.  At Waggl, we believe that Authentic Inquiry is the key to developing an Inside Out Strategy, in which the workplace becomes more human, and ultimately more successful.