These days many companies are faced with having to revise their strategies and overall beliefs about the markets they operate in. It is as if COVID-19 has put a magnifying glass on top of a development already taking place, a development towards acting and strategizing with more creativity, and agility.
We also see this as an example of how a clearly defined human need, which in this case is maintaining our health, becomes a clear driver and guide for change that people can relate to and instantly get behind.
It has been documented repeatedly that companies who invest resources and effort into design and understanding the human needs behind purchasing a service or product, outperforms those that don’t.
A majority of large corporates have addressed this and would not dream of developing new products and services without some involvement of the intended customers. This mindset, however, still holds untapped potential in relation to strategising.
Too often strategy becomes about what you as a company want to achieve rather than how you as a company can support your customers in addressing their needs. This can lead to a disconnect between your core value proposition and your strategy
The following section will elaborate on five capabilities the strategy toolbox needs to include, to ensure that you strategise according to the needs of your customers.
1. Continuous alignment between your value proposition and your strategy
We believe that at the core of any strategy should be a strong validated value proposition reinforced by a strong business model.
This is the foundation on which strategies should be built and needs to come first.
A value proposition is in essence a transaction of value between humans, this exchange of value takes place between company and employee, and between company and customer. In these transactions is a myriad of human needs, dreams, egos, challenges and motivations contributing to the fact that in most cases, humans will be the single most disruptive factor in a successful definition and implementation of a new strategy.
In order to understand people and, more specifically, why they buy your products and services you thoroughly need to understand how they perceive the value they get from your product or service and how they perceive you as a service provider.
You might sell cleaning services and believe people buy your service to get a clean home, but different people will buy it to relieve guilt, reduce arguments or just for peace of mind that someone got this.
Knowing this can change everything, it can change who your customers perceive as your competitors to cater for this need, it can change the motivation your employees feel about working for you and it can definitely influence the set of actions you should take moving forward to retain and attract new customers.
2. A continuous ability to sense and listen to incorporate the human perspective
Human behaviour is complex, anticipating it for extended periods of time would entail immense complexity and time potentially wasted in doing scenario planning due to the many parameters involved.
To make sense of, and successfully navigate these needs in a business context requires facts and defined feedback loops to stay in touch with the voice of the customer
Strategising needs the capability to uncover what is meaningful to people and get to the core of why that is, and this cannot be obtained by merely asking them. Secondly, you need a culture of experimentation enabling you to systematically map- and convert assumptions into knowledge.
Many strategy units have started to adopt prototyping and testing but often based on assumptions about the market they play in. We advocate that putting in the hours to do explorative research and understand the human behaviour will greatly limit the field in which you need to prototype and test.
Doing so can save you a lot of resources, because you prototype based on a thorough knowledge about what questions to ask.
When the jobs the customer hires your product to do are known, you can focus on how to solve for these.
3. Enable a clear break with the present
Many traditional strategy planning tools are better equipped to map and understand existing strategies than envisioning new ones. Truly game changing strategies are born as a result of embracing uncertainty as a source for identifying new opportunities.
Strategies must be clearly separated from the planning process in order to envision desired futures capable of making a clear break with the present situation.
In order to achieve this, a powerful driver is having the capability to research customer needs freed from all assumptions that can ensure you ideate from a new perspective in line with actual needs and not clouded by existing knowledge, which is notoriously hard to do.
Based on human research you discover parameters such as possible constraints, contrasts, extremes, indicators for the future etc. that can be used actively as creative drivers to facilitate thinking about your business problems in new ways.
4. Creating tangible manifestations of desirable imagined futures
The feasibility and viability of a strategy is often tested upon launch, when strategic initiatives have been converted into tangible offerings and communication.
Failing at this late stage can be risky and costly.
By prototyping a strategy and thereby making it tangible we quickly learn about the strategy’s potential reception amongst the employees that are supposed to act upon it and democratise the process of who can pitch in and when
This also provides you hard data about its reception amongst potential customers.
Ideally all perspectives needed for successful execution should be present in the definition phase; by ensuring this you will greatly reduce the risk of the final strategy not being feasible and viable as this approach will reduce the gap between intented and actual strategy.
5. Provide employee empowerment and ownership
The biggest potential flaw in strategising is making a great strategy that nobody ever hears about or contributes to. There are numerous studies pinpointing the waste attributed to employees not acting according to a set strategic direction.
The strategy becomes redundant or worse; counter-productive, due to lack of consistency in the value a company sets out to deliver.
Having a shared understanding of the human needs behind a set strategic direction will enable you to define guiding principles to allow for more autonomy and better ability of the people closest to the customer to act
This is comparable to moving from a route description to learning how to use a compass, ultimately providing increased ownership.
To succeed at adding these capabilities to the strategy toolbox, companies has to rely on asking questions more than providing answers and testing over deciding.
This can often be perceived as a loss of control and challenges the type of linear thinking that we have learned equals logic from our years in school. Even in the light of recent events we do not think the world is necessarily moving faster than it always has, perhaps regarding technology, but not regarding humans, who fundamentally tries to avoid change.
The world has, however, become less predictable and there is way more noise, impacting our ability to make clear bold decisions.
Knowing the humans involved in delivering and receiving your strategy, understanding what makes them tick, and providing your employees the mandate to act upon this, is your best bet to minimise risk and improve your chance of success.
Not least due to the fact that they will be the ultimate judge of the value you aim to deliver.
In our next article in this series on strategy we will expand upon what we believe it entails to design human-centric strategies.
- Sign up for webinar covering our combined series of designing strategy here
- Request a meeting to hear more about how we can help you design strategies or learn more about it - reach out to sorenp@isitabird.dk
