Strategy and time
Most strategy approaches don’t really take time into account. It shows up sometimes as a window of opportunity, or the time horizon within which a risk could turn into an issue. And time is important in the strategy execution plan. But time as a strategic variable isn’t really handled in strategy development.
But in the words of the Duke of Wellington, military strategist, time is everything, and it’s crucial in organisation strategy too. In non-competitive environments, organisation must be able to change at least as fast as the rate of change in its environment. And in competitive environments the organisation must be able to change at least as fast as its competitors too, and preferably faster.
That says that relative speed is important, the organisation’s speed compared with its environment, and compared with other actors in its environment. The relative speed could show up in different ways, such as the speed of a core process, product refresh rates, the time for a decision-action cycle, or the rate at which the organisation can change its capabilities. So, understanding the tempo and rate of change in your environment is important. And if you want to alter the relative speed of your organisation compared with others, then there are several different things you can look at.
Foresight
The first is about the prediction and interpretation of changes in the environment. It’s the organisation’s ability to sense and to make sense of changes in the environment before these hit. The further ahead you can spot threats and opportunities, the more time you have to plan and prepare. For threats, there is an ‘event horizon,’ a point at which any avoiding or mitigating action will be too late. You need to know how far you can see, and how much lead time you need to prepare.
Change rate
Change rate is the rate of developing or adapting capabilities. This is how much change you can carry out in a given time period – usually a window of opportunity or risk. Being able to use multiple change rates in your organisation will give you the most choice on what strategies to use and when to use them. As Machiavelli put it, “Whosoever desires constant success must change his conduct with the times,” and the most successful organisations are those that can do this again and again.
Cycle time
The third enabler is cycle time, the rate of delivering each iteration of a core process. That could be an operational cycle time, the rate for turning the handle on production or delivery processes. This is the time to execute each of your critical operations, from R&D to manufacture to delivery. This is about the core processes, those that deliver value to your customers. Reducing cycle time on ‘internal’ processes may increase efficiency but is only rarely differentiating. There’s also decision-action cycle time and that’s about the speed with which management teams can translate information about a new situation into a decision and then into action. Having a decision-taking structure which can be triggered quickly and act quickly is vital – plenty of organisations are hamstrung by key governance groups which work on a cadence which is too slow for the rate of change in their environment: the world just keeps getting away from them. The decision-action cycle is often relatively easy to change – only a small number of people doing something differently – and can offer huge leverage, so it’s always worth thinking about this.
There are trade-offs between these. Better foresight gives you more lead time, so if your foresight is good, then this can be a substitute for improving the rate of change or the cycle time.
Tempo
In terms of time, but not necessarily relative speed, there’s also tempo, and variance in tempo. The organisation that can operate at only one tempo relative to its competitors or the market or the regulator or any other key stakeholder has reduced its strategic options dramatically. In contrast, the organisation that can shift the tempo at will not only has a better chance of matching the needs of the moment but also has the capability to disrupt the strategies of competitors. Being able to operate in multiple gears is not something that ‘just happens.’
Time and strategy
Disruptive events in your environment can be foreseen, but it can be hard to tell when they will arrive and what they might mean for you. Disruptive events triggered by other actors in your environment may need you to be able to develop and execute strategy fast, to go through that decision-action cycle that relates to strategy fast. Building organisational foresight helps you identify what’s coming. Building organisational capabilities to have a range of change rates and a range of tempos gives you more options. Altering your decision-action cycles is relatively easy and often high impact. All these make you better strategically prepared.