In a 2018 seminal research article, McKinsey explains that:
“The pace of change across the business landscape is unrelenting. Technological, economic, and political disruptions are requiring a rethink by most companies of where and how they compete, what organizational model they need to keep up, and where they must build capabilities. Annual strategy reviews need to be compressed to a quarterly time frame, with real-time refinements and sprints to respond to triggering events.” McKinsey
Other strategy advisories agreed and released their own supporting statements. Deloitte says:
“The pace of technology change has accelerated so quickly that in many cases, one-year planning cycles are no longer applicable.” Deloitte
Across the board, one thing is clear: Strategy at the current pace is a threat to survival. Organisations that cannot set and course-correct strategy on at least a quarterly basis will cease to exist within the next decade.
Building a large, complex IT Strategy Roadmaps is no longer sustainable because intentions and situations are changing too fast to be encumbered with time-bound, rigid plans with vast resources
and capital allocated against them. To survive the current pace of change, protect their license to operate and be relevant in the future, organisations must behave more agile and fluid where there is no fixed target state, instead organisations continuously adapt to an evolving future state and dynamically allocate resources in real-time to current, emerging and anticipated situations.
Laggards are going out of business – 52% of Fortune 500 from 2000 do not exist today. For those who can achieve this (termed “business agility”), there are rich rewards to be had. The same research has shown that organisations that have achieved agility can pivot within days, hours or even minutes as new threats and opportunities emerge, consequently they outperform peers 1.5X financially and 1.7X in non-financial measures. Since the dominant driver of large-scale disruption today is in Information Technology, its never been more important than now to link Business Strategy and IT Strategy (and Digital Strategy, for organisations that treat it as a separate activity).
“If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.” Jeff Bezos
Yet most companies are unable to set strategy more than once annually and continuously review/course-correct/perform real-time interventions. The primary contributing factor is the traditional strategy creation process itself which has seen little digital focus and consequently is stuck in the Victorian era. This traditional process is:
Moreover, the business usually fails to reach its target end-state (per KPMG, McKinsey, Bain, PwC, others). The impact is 5% off the P&L, never realized (per Accenture studies).