So we’re living in a permacrisis...
Pandemics, climate change, artificial intelligence, geopolitical instability, fake news and disinformation.
Insurance Brokers MarshMcLennan, have positioning dedicated to "Risk and Opportunity in the World's Permacrisis”. Collins Dictionary describes it as “an extended period of instability and insecurity” when it made it word of the year in 2022.
This is the space we’re now in.
In 1871 Prussian Field Marshal Helmuth von Moltke the Elder said “No war plan extends beyond the first military engagement with the hostile main forces”. In the one hundred and fifty years since, we’ve had lean, agile and a global pandemic, yet not much has changed in the way we operate businesses. We’re still spending big on upfront strategy and planning and scratching our heads when it goes wrong.
Our collective approach has been characterised by reductionism, systematic thinking, and a penchant for simplification. It’s true that this mindset has propelled us through the Industrial Revolution, automation and an era of pronounced individualism. However, the limitations of this perspective are becoming evident. We cannot view elements in isolation; we exist within intricate systems. Whether we anticipate it or not, the unexpected, the unfamiliar and the undesired will inevitably surface.
Big strategy should die
For decades, management consultancies have sold the idea that they, armed with weighty frameworks and PowerPoint decks, can predict the future. And for years, enterprises have paid handsomely for these seductive 5, 10, and 20-year plans. How often have these prophecies turned out to be not just flawed, but spectacularly wrong?
As the veil lifts, a pattern emerges: their grand designs falter, the very architects of these plans promptly reappear, not with apologies, but with accusations. It's never their plan that was flawed; it was your execution. Then they offer a brand new plan to fix your apparent failure.
The reality is, predicting the future was never really possible to begin with. But today, in a world churning with unprecedented turbulence and complexity, the glaring inadequacies of ‘big strategy’, or perhaps more accurately ‘big planning’, have become starkly obvious.
If Covid left us with anything, it was the stark realisation that predictability was something of a mirage. The pandemic exposed the futility of over-reliance on static, long-term planning and left some businesses flat-footed; outpaced by more agile challengers.
Many organisations, maybe even your business, experienced remarkable breakthroughs equivalent to years of progress, achieved through existential clarity and ruthless prioritization. They defied conventional norms by tearing up the rule book and circumventing bureaucratic barriers, embracing genuine cross-functional collaboration. However, as time passed, many of these organisations struggled to maintain the momentum, leaving them exhausted and now confronted with new crises on the horizon. The challenge lies in finding sustainable ways to preserve the transformative changes they once achieved while navigating the complexities of the evolving world.
Adaptability and agility is about making a shift
We believe it’s time to embrace a different mindset. A different set of rules. Perhaps, play a completely different game. We need to make the shift:
- From long-term planning to emergent strategy.
- From dealing in absolutes to weighing probabilities.
- From the confines of reductionist thinking to the expansive horizons of systems thinking.
- From blind trust in expertise to the vibrant culture of experimentation.
- From role-driven hierarchies to purpose-driven motivations.
- From the rigidity of planning to the agility of preparedness.
- From isolated dependency to a mesh of connectedness.
- From chasing after outputs to seeking meaningful outcomes.
- From management that controls to leadership that inspires.
- From inflexible rules to guiding principles.
- From centralised powerhouses to decentralised ecosystems.
- From the obsession with speed to the rhythm of flow.
- From linear projects to iterative loops.
- From functional siloes to anything as a service.
- From the arrogance of genius consultants to humility.
Placing better bets, making better decisions
This isn’t about strategy being bad. Knowing which direction you’re heading in and which bets to place is critical. However for businesses reliant on digital technology (who isn’t?) laying out rigid long-term plans, that close the door behind you, could harm your business. You are not building a house or planning a city, you’re shipping software. You don’t need to play by the same rules.
Military strategist John Boyd created a concept called the OODA loop. According to Boyd, decision-making occurs in a recurring cycle of observe–orient–decide–act (OODA). An entity, whether an individual or an organisation, that can execute this cycle quickly, observing and reacting to unfolding events more rapidly than an opponent, can thereby "get inside" the opponent's decision cycle and gain the advantage.
High-performing, modern product organisations do just that. They place better bets and make better decisions quicker than their competitors. They have the intelligence (in its broadest sense) to make better observations and orient itself within its surroundings. They have the experience and knowledge to make the right calls and the empowerment to act.
What will it take?
This doesn’t happen over night. It requires bravery from leadership. It requires experimentation and safe spaces to fail and go again. It requires everyone to take accountability but also be given the autonomy to act. It requires awareness of itself and the ecosystems it is part of. It requires reflection and humility. It’s hard, yes, but how else can your company survive a permacrisis?