When corporate leaders think about the future, the immediate reflex is to jump to “strategizing”.  This usually involves dusting off the company’s strategic plan and discussing how it needs to be updated and expanded at some five-star offsite location.  It has become a highly structured, disciplined, and regularly repeated process.  But is it still appropriate in the context in which decision making is made, both today or tomorrow?

Let’s start by the fundamental issue defining what strategy consists of in practice. Most executives would say that it is: “a plan of action to achieve a long-term objective or goal”.  But while this is useful as a starting point, it begs two questions: what is a ‘plan’ and what do we mean by ‘long term’?

In our last article, we highlighted the five E’s of innovation leadership: envisioning, enabling to execute, and engaging and empowering. In this article, we will explore envisioning and how it links to strategic decision making.

Figure 1:

Envisioning encompasses the ‘why’, the ‘what’ and the ‘how’ of your company, your business – and ‘why’ is the most important prerequisite. Why are you in business?  What do you stand for? What are you about?  And what values contribute to delivering on this purpose?  Purpose, now much considered by many of The Conference Board’s members, defines your company’s meaning and represents your compass into the future.  It should guide all you do. It needs to be both inspirational and aspirational.

Let’s take inspiration first. An inspirational purpose is a unifying force for workers, customers, investors and all other stakeholders.

Apple is a good example of the power and potential of getting this right. Steve Job’s ‘return to Apple’ speech in 1997 invited his employees to think differently. “It’s only the crazy ones who think they can change the world that actually do”, The “Think Different” message inspired his people to constantly challenge the status quo through cutting edge and consumer centric technology. It attracted partners and developers and had consumers line-up and even camp out for the next new innovation outside the store.  It established unprecedented congruence and united workers, consumers and stakeholders alike.  

Another example is India’s Mahindra Group whose carefully crafted and uniquely powerful “Rise” embodies its purpose to improve its customers’ lives, lifting their standard of living.  The firm’s Financial Services arm leveraged this purpose as it extended its core offering of vehicle financing into rural areas to “address the unmet needs of underserved customers in an underpenetrated market.”  

By living their purpose employees inspired profound and broad trust in the communities – which in turn served as springboard to expanded services as financing of tractors, lives, health, and even housing.  Today Mahindra Finance is India’s largest rural nonbanking financial company, serving 50% of villages and 6 million customers.

Purpose’s power to unite is particularly critical during uncertain times. It allows you to navigate the choppy waters while maintaining focus on that beacon into the future.

Authenticity and “walking the talk” need to be the priority as you put your purpose into practice.  A recent article published on the Fast Company website captured the comments of business leaders of innovation-led companies. “Post-pandemic ‘authentic’ will tenaciously attach itself to corporate actions rather than corporate intentions”, says filmmaker Elliot Kotek, founder and CEO of the Nations of Artists. “Purpose will be measured by the trio of action, transparency and accountability”.  It must be used as a brand’s lens for decision making, innovation, crisis response, engagement, growth plans and opportunities.

Moreover, in addition to being inspirational, a company’s purpose needs to be aspirational.

Steve Jobs’ inspirational message “Think Different” also made Apple aspire to be so much more than a computer company. The new purpose opened the way from iPod to iPhone to iWatch, and beyond.

Similarly, Mars Petcare leveraged their “A Better World for Pets” to extend their pet food business into the broader field of pet health offering a slew of new services including medical - increasing touchpoints and building loyalty in the process. All this while competitor Purina kept its “Better with Pets” stuck to innovating in food, missing out on new transformational where-to-play opportunities.

So we start to see how, today, strategy, the “How” of the equation, flows from purpose.  In our VUCA world of volatility, uncertainty, complexity and ambiguity, strategy’s emphasis should be on establishing the boundaries of the space you aspire to play and explore in, the arena in which you let your people experiment, fail and learn.  This, in turn, allows your employees to innovate and, by innovating, create value.

Amy Edmondson and Paul Verdin term this approach “Strategy as Learning”, re-invented from definitive, rigid, analytical strategic planning and resulting in a more iterative approach to the future. It provides a sense of direction and a definition of boundaries in which key questions are iteratively answered.  It’s where strategy merges with innovation, in which assumptions are tested and experimented on.  Failure will be learning moments to move forward from.  And once the business opportunity is defined and refined, scaling up happens at speed.