At first glance, this seems to be an article about uncertainty and how to handle it in the context of strategy. However, it actually is about governing strategic initiatives. The key question is:
What is the best way to move from a company strategy to … a stream of initiatives that will deliver it?
The secondary objective would be to improve the success rate of strategic initiatives, which often have a high failure rate. Uncertainty is just the one and most important condition under which such initiatives are carried out.
Leading strategic initiatives in an era of uncertainty: When to commit to action provides a solution for these questions. It is an article by IMD faculty members Bettina Büchel, James Henderson, and Cyril Bouquet.
The authors propose to manage different strategic initiatives by setting appropriate priorities. For this purpose, they cluster initiatives by the degree of uncertainty. Here, they distinguish between
- External strategic uncertainty, which is determined by external factors that the business cannot influence, and
- Internal execution uncertainty, which is determined by the businesses capabilities needed for handling various strategic initiatives
Depending on the level of those degrees of uncertainty, initiatives are clustered in a 2 x 3 matrix, which leads to 6 types of initiatives. The article provides recommendations for action for each of these 6 clusters.
For instance, pilots are recommended for initiatives with high internal execution uncertainty. Pilots help to establish social proof and help understanding and overcoming potential obstacles.
In addition, the article
- suggests some steps to prepare before and during execution,
- mentions some dilemmas companies face when implementing strategic initiatives, and
- gives several real-world examples from companies like 3M, Nestlé, or Tetra Pak.
In summary, there are no groundbreaking new insights in this article. The value of this paper lies in the structured approach it provides. It also reminds us to look at the basics and not to forget to assess the general conditions when governing a basket of strategic initiatives.
Our Book recommendations on strategic initiatives, projects, and growth
- Mastering Project Portfolio Management: A Systems Approach to Achieving Strategic Objectives
Michael Bible and Susan Bivins
This book illustrates the entire PPM process from strategic planning through portfolio evaluation and adjustment including prioritizing objectives, identifying and evaluating candidate projects, selecting optimal portfolios, measuring performance, and governance.
- Dynamic Capabilities and Strategic Management: Organizing for Innovation and Growth
David J. Teece
This book is about core ideas of dynamic capabilities. Teece explains their genesis, application, and how they offer an alternative approach to much conventional strategic thinking grounded in simplistic and outdated understandings of industrial organizations and the foundations of competitive advantage.