Business strategy projects often begin full of curiosity and enthusiasm to develop a powerful new plan but end with an incremental set of objectives and initiatives based on the current model.
Why is that? What happens during the course of converting analysis into strategy that renders the output so ordinary a lot of the time?
The answer is dominant logic.
In the early stages, the strategy team and executives explore a multitude of perspectives in the search for insight. This can lead to innovative strategic options that promise to take the business in a new and promising direction.
But then someone, usually a long serving executive, points out importance of addressing issues and opportunities in the core, such as technology shifts, efficiency improvements, pricing changes, or customer service improvements.
The strategy team feel obliged to factor these points into the analysis and options. After all, how can we ignore the biggest change agenda items?
When the options are discussed by the executive team they also lean toward what they know and feel confident of delivering. Their perspective and decisions are based on beliefs and heuristics about the scope of the business and its primary levers of value creation, be that operational efficiency, pricing, or brand.
Avoiding this kind of inertia in the strategy process requires exposing dominant logic. A key role of the strategy team is to deconstruct the business model to reveal its underlying principles then challenge these to see whether they are critical or not, and the value of alternatives.
For example, a principle like as lowest cost is always best, or owning is better than leasing, or market segment Y is too small, can be revealed and then implications and opportunities of changing it can be explored – allowing strategic alternatives to emerge that improve the quality of strategic decision making.