Why does integration of strategy fail?

There is often a disconnect between high-level ambitions and daily work. We’ve found a repeating pattern in companies we work with: there is no lack of visions, strategies or individuals driving them, but it is near impossible to execute successfully without a common understanding or shared direction in the organisation.

What we do at Nordkapp — strategic design— smoothes the transition from a grand vision to a set of principles that can be used to make choices on an operational level. There are common issues we’ve discovered in our projects, that often prevent the integration strategies into practice. Here are three of them:

1. You think you have a strategy, but what you actually have is many loosely defined individual visions.

In its most simple form, a strategy is the competitive advantage which brings clarity of direction and guides decision making for the organisation. Often this is not the case, despite good intentions. Very often the request to articulate the company strategy or vision is met with hesitant answers that are either high level and generic at best, or completely miss the point, to begin with.

In many cases, the underlying reason for this is deceivingly simple: there is no single, mutually agreed north star, and thus, clarity on how to get there in practice. This often leads to parts of the organisation taking their future into their own hands for themselves, leading to more internal misalignment and confusion. To us, this is a clear sign of the actual strategy work either lacking depth or crystal clear communication throughout the organisation.

In a high performing organisation, strategy isn’t fully 100% a democratic process either. High-level strategy — along with the duty and responsibility — fairly often belongs to the top leadership, especially in the context of traditional corporations. Often driven by visionary individuals and small teams very much at the core of things, there is often a gap where the visions connect to strategy and the actual implementation and execution. Fixing this doesn’t mean everyone has a final say on defining the high-level strategy, but it does mean everyone gets to be heard and participate in the process of making the strategy. This removes the tendency for individuals and teams playing to win against each other, in favour of keeping on playing the game together, as successfully as possible.

In its most simple form, a strategy is the competitive advantage which brings clarity of direction and guides decision making for the organisation.

We were recently tasked to help a large organisation to find out what was the current status of their strategy integration, and what were the possible everyday bottlenecks within their teams. After embarking on a set of interviews with their internal stakeholders, we quickly discovered they lacked a clear, shared direction and clarity to succeed in their daily work. The majority of them stated that they weren’t even sure how to translate the high-level strategic direction into their daily work and priorities.

When we asked who their most important enabling units and teams were, none of the interviewees mentioned the actual strategy team (!). This meant double confusion — from one perspective the people lacked understanding of the strategic priorities, and at the same time the actual strategy team was completely absent in people’s daily work. This in turn led to many parts of the organisation focusing on what they could control — short term, immediate fixes on incremental problems, instead of larger, macro-level shifts looming on the horizon.

2. Your investment in strategy stops before the real integration has even begun.

Companies have no problems coming up with strategies — quite the contrary there is often an abundance of them in any given organisation. However, what matters is what comes next: investment in execution and integration.

Building and crafting a coherent strategy for now, next and the future horizons requires multidisciplinary work. In practice, this means inviting relevant people and teams to the same table to shape, craft and execute a mutually owned game plan to make strategy come alive. This is also how we also ensure a shared understanding of what is the main strategic intention, and how it translates to action.

Often this doesn’t happen due to numerous potential roadblocks — for example, lack of maturity, seniority and ownership of the big picture, changes in staffing and the business landscape at large. The important thing is to understand the responsibility for owning and making the future of the organisation is in the end everyone’s job. This does not happen when the continuous investments to integrate either do not exist or stop too early.

Building and crafting a coherent strategy for now, next and the future horizons requires multidisciplinary work.

This is a fairly common occurrence. In an article about unravelling strategy execution, Harvard Business Review wrote about a case where only 55% of the middle managers they surveyed could name even one of their company’s top five priorities, although the management thought they were explicitly clear on communicating their strategic intention.

3. You focus too much on incremental short term fixes over real long term impact.

We all have been there — working in a reactive mode is a dopamine miracle. Concentrating on sorting out the daily dumpster fires and solving incremental challenges as they come can feel deceivingly rewarding and even amazing. Often this is even rewarded in the sometimes superficial goals the default way of working quartal economy creates. The truth however is that especially in the context of strategy, acting reactively on the quick wins and fixes distracts easily focusing from what would actually matter the most in the near-to-long term.

On the organisational level, there are two distinct forms that are visible:

First, many companies competing in a crowded market fall into a daily incremental trap. They focus on quick wins and incremental improvements based on whatever their competition (or market leaders) might be up to at any given moment. This again leads to a lack of deep understanding and thus, to the trap of short term decisions based on hunches instead of accurate insight of the business landscape, changing customer behaviour and the future opportunities ahead.

Second, many companies often get blinded by the daily growth and the idea of what the actual market the company is in. While playing on one’s own strengths is a good thing, the downside of this is the market and consumer behaviour might change faster than the internal understanding and insights is gathered and reflected in the chosen direction. This is why companies need a clear understanding and insight of what the business landscape they play actually is and who their paying customers are. These factors are one part of the foundation to build upon, be successful and own the position in the market.

We all have been there — working in a reactive mode is a dopamine miracle.

City of Helsinki decidedly took a different approach. Just when the COVID-19 hit, Helsinki Partners, the organisation behind My Helsinki, and their public-private partnerships, to both help them discover what may lie beneath, and to equip their team with skills and capabilities to ensure they stay on top of evolving futures beyond the pandemic. Through the co-futuring foresight process, done together, openly with people from the city, its partners and collaborators, we crafted six scenarios of possible post-COVID futures for the city and society at large. Through this pilot, My Helsinki implemented the way of working to their day-to-day work, and even part of it to their strategy at large.

How to avoid these issues?

We believe the most impactful strategy work is done in the service of the organisation carrying on both end-customer-, and future-focused points of view. In the future we envision internal strategy teams working together, facilitating, and building visions, approaches and strategies at different levels of the organisation and with various stakeholders. Strategic adaptation must become an active and living, ongoing, iterative process of hypothesis, experimentation, learning, and action. Yes, action — getting your hands dirty, and learning as you go as well.

Active strategic adaptation must become an ongoing, iterative process of hypothesis, experimentation, learning, and action. Yes, action — getting your hands dirty, and learning as you go as well.

How to do this in practice?

1. Build a crisp strategy and approach. It’s almost too easy to come up with big lofty goals. What makes them stand out is the ability to define what they mean (and what they don’t) and why they exist.
2. Create a game plan, and make sure it is visible to everyone. This is the how and when. Direction is made real by embarking on the journey to get there.
3. Communicate, and visualise your approach. Details and language matter, and until your strategy is communicated AND understood thoroughly in your organisation, it doesn’t really exist. Visualising your choices and directions is a powerful tool to align people’s perceptions, and have coherent conversations around the subject matter.
4. Ensure continuation. Make sure you or your organisation do not think the strategy work ends in this phase. It really starts from there. It is a marathon instead of a sprint.
5. Kill your darlings. Iterate the approach and fine-tune it, or make tough decisions to get rid of the ideas and actions which are not relevant after all.
6. Rinse and Repeat.

Jutta Johansson and Sami Niemelä are strategic designers and directors at Nordkapp. Their focus is on strategic foresight, discovering opportunities and designing propositions 👉🏼 Click here to schedule a short meeting with them.

Nordkapp is the change agency for visionaries. Our strategic design practice excels in building foresight-driven strategies, facilitating decision making, exploring and communicating what to do and where to go next.