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Adaptive Strategy: are you ready to embrace disruption?

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Disruption and change are constant. Traditional strategic planning assumes that the strategic environment is stable or predictable. This has never been true and the global disruption due to COVID-19 makes the weakness of traditional business planning even more apparent.

Executive Education spoke to specialists Dr Antje Fiedler and Steve McCrone about how adaptive strategy can help businesses take advantage of the opportunities disruption can provide.

 

Contributor:

Antje FiedlerDr Antje Fiedler is a senior lecturer at the Graduate School of Management at the University of Auckland Business School and has carried out extensive research, teaching, and consulting work on the growth of New Zealand organisations in the face of environmental pressure. She has been brought on board Executive Education to facilitate customised programmes within New Zealand organisations.

What is adaptive strategy and when should it be used?
Adaptive strategy embraces the idea that changes in the environment of an organisation are difficult to predict or shape. It emphasises that organisations have adaptive resources that can be leveraged to thrive under uncertainty without the need to make high-stake investments. It is most suitable in changing environments where competitive advantage is short-lived and where multiple stakeholders co-create emerging goals.

The value to business that adaptive strategy offers during times of disruption is that it places the organisation in the sweet spot that combines rigorous analysis of data and insights with purposeful experimentation in pursuing new opportunities to get the most out of limited resources.

What examples have you seen of adaptive strategy working?
Investments into sharpening the sensing capacities of organisations have been made across New Zealand, especially in financial and telecommunication services. But it is not only technology that drives these transformations. Zespri, for instance, has developed a very fine-grained approach towards sensing subtle differences in their export markets.

Government has also invested in helping to build the sensing capabilities of New Zealand organisations through New Zealand Trade and Enterprise and Callaghan Innovation. These capabilities are also enhanced through entrepreneurial management capabilities, which are pivotal for meaningful experimentation.

What is one key piece of advice you have to business in dealing with disruption in their planning practice?
Focus more on the affordable loss rather than the expected return. This shift in thinking encourages experimentation and calculated risk-taking. Affordable loss thinking helps organisations to simultaneously be bold and cautious in engaging with uncertain and unmalleable situations.

 

Contributor:

Steve McCroneSteve McCrone is a management consultant at Cornwall Strategic with over ten years’ experience offering global organisations guidance in strategic foresight, business risk services and transformational change. He also facilitates Executive Education’s short course Adaptive Strategy in a Disruptive World.

What is adaptive strategy and when should it be used?
Adaptive strategy is about embracing uncertainty rather than seeing it as a problem to be overcome. Traditional strategic planning teaches us to link how we are today with an imagined future where all opportunities are brought to fruition and all problems are solved. And while it’s comforting to imagine that you have control over the future, there has never been a time where the world was stable enough to do this kind of ‘destination-path’ planning and this is particularly true in times of disruption like COVID-19.

So instead of guessing the future, adaptive strategy is about managing in the moment and being able to dynamically support and move into success when you see it. Adaptive strategy is about setting a direction of travel and managing the tempo of the journey.

What examples have you seen of adaptive strategy working?
Baker Boys in Christchurch manufacture cakes, slices and baked goods. COVID-19 created massive disruption to their supply chain and to their consumers. So, they increased the tempo of exploration and found new ways of getting their product to market. They explored opportunities to build partnerships with others in the industry and reduce their costs and increase their exports. COVID-19 disrupted their business, as it did for many others but Baker Boys didn’t need to rethink or rewrite their strategy.

What is one key piece of advice you have to businesses dealing with disruption in their planning practice?
Waiting is failure. Don’t wait for the market to change or for things to settle down. Sometimes organisations can feel stuck or overwhelmed by change. Disruption is the time to interact with the market, try something crazy, and then be ready to lean into the things that are working and learn from the things that don’t.

Executive Education hope you find this article helpful and relatable. If you have any feedback or would like to suggest areas for advice from our experts please email exec@auckland.ac.nz.


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