Imagine a Gen Y employee is invited to a corporate strategy session. He listens to the presentation, focused on evaluating which businesses have strong competitive positions and laying out long-term investment plans. After several hours, he has a list of questions about the process the company is following and raises his hand to join the discussion.
What might he be wondering?
First, consider the assumptions and theories that underpin most strategy processes today — and are considered "givens" by many older executives. The word "strategy" is a war term, defined as a plan developed in the face of competition. Its application today is deeply rooted in the philosophy of a zero sum world, in which beating the competition — winning — is key. An analytical process based on assessing your strengths relative to those of your competitors' and planning how to win in the market place is considered a solid, well-accepted process. Growth in profits earned, particularly relative to profits earned by competitors, is the key metric of success.
So, how might a member of Generation Y think about "strategy" that would be different from the way it's "always" been done? Here are four things he may be wondering about:
- The underlying philosophy: Do others have to lose for us to win? Boomers, themselves competitive and driven, are conditioned to ask "how can we win?" But as the cost of communication decreases, businesses are becoming part of a complex network. And, the rule of network economics is that open systems — systems that allow others to play — are the ones that win. Could our strategy be based on the principle of allowing all participants to benefit from the transaction? Should we?
- The central tactics: Is proprietary information integral to our success? If so, is it still realistic to keep data private? Many past strategies leveraged information asymmetry. Details of a company's cost structure and plans could be obscured from suppliers and other partners. And consumers had access only to limited information. In a world of cheap, abundant, always-on interaction, however, information is more open and more easily accessible to all parties. Asymmetry is no longer a viable tactic.
- The desired outcomes and metrics: What are our goals? To what extent should we consider the social value of the business, as well as its competitive position? How do we measure the effects of the organization on its environment ("social accounting")? Does our strategy consider the sustainability of the resources we use? Over time, the future of work likely belongs to companies that exchange simple revenue-based evaluations for something much more complex and revealing.
- The timeframe: And what is the implication of our strategy on what it's like to be part of this organization today? Y's, with their sense of immediacy, look for ways to exploit the moment rather than defer to an uncertain future.
- The process for setting direction: Is forecasting a viable approach? Many organizations still invest significant resources trying to determine the most-likely single point forecast. But, in an uncertain environment, understanding the range of plausible outcomes can be far more valuable. Have we pushed to understand the extremes? Is our strategy viable under a broad range of possible scenarios?
- The magnitude and timing of investment decisions: At its core, strategy is a process for making investment decisions — where to focus both money and time. In a rapidly changing, complex environment, trying new things is a smart way to learn. Should we design experiments with small investments to try new ideas before committing significant funds? Do we have the right practices in place to debrief and learn as we go?
- The desired outcomes and metrics: Like Y's, Xer's are likely to consider corporate goals beyond winning. Which strategy will position us with the most robust set of future options? Where will we gain the greatest flexibility? Which will allow us to respond agilely to uncertainty?
The bottom line: Bring each generation's perspective into your discussions regarding future business options. Based on their formative experiences, each is likely to look at the possibilities through a slightly different lens. The approaches to strategy formulation that Boomers learned deserve reconsideration today. Be open to the new questions that employees from every generation may bring to the discussion.
This blog first appeared on Harvard Business Review on 03/07/2012.
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