LIBRO

STRATEGIZING FOR THE NEW NORMAL

10 June 2020



Three years ago, in the article “Strategising for the Future” of The European Business Review with IESE professor Joan Enric Ricart, we theorized about a future increase of uncertainty and malleability of markets. What we didn’t know is that this “future” would be the today’s “present”.

Covid-19 crisis has dramatically increased the forces of change at unprecedented ratios. This is due to the fact that “uncertainty and malleability have joint drivers and high correlation”. Increased uncertainty spurs malleability as companies seek new ways to survive by reinventing themselves through new business models and, in turn, increased malleability leads to more uncertainty in the markets.

I think the idea of “integrated logics” we suggested on that article can be of special value today.

Here are three tips we take from it:

 

1. Do not concentrate in a single logic: strategizing under Covid-19 crisis requires integrating different perspectives. Now more than ever you must develop the skills to combine the three logics: numbers (analytical), principles (institutional) and business model (systemic). Each one plays a fundamental role in strategizing for the “new normal”.
-Numbers and data keep your feet on the ground and remind that reality is stubborn: there are simple and concrete rules that every business must follow to survive.
-Principles give consistency in the way companies react to the Covid-19 crisis, helping them to keep on the course of the purpose and values and facilitating the necessary motivation and resilience for this new dramatic situation.
-Business model logic boosts change, analyzes how the “new normal” will be (virtual work, online selling, disruption in supply chains…) creating new business models and challenging the traditional perspective on the value generation and value capture.

2. Create diverse strategic teams: people tend to show a propensity for one of the types of logic. For example, marketing and sales use to have a greater ability in systemic logic, financial departments tend to use analytical logic, institutional logic usually prevails in the areas of HR and CSR. When strategizing under uncertainty, diversity is a great asset. You must guarantee that all three logics are adequately represented in strategy teams, and to make sure that, especially the people who are leading the strategy – be it the CEO, the strategy director or external consultants – are able to handle the three logics.

3. Combine tools from different logics. Strategy tools generally focus on specific logics. The scenario planning, for example, now used extensively during this crisis, is good to analyse numbers, but it provides little information about the mission or values of the company or the shelf life of the business models. The similar applies for Business Model tools, they focus on systemic and analytical logic, but hardly refers to the principles and values. And in the common methodologies to reflect about purpose and values, the connection with the business model remains neglected or at best implicit. As a general rule, in the process of strategizing under uncertainty, it is good to use several tools covering different logics.

Strategizing during the Covid-19 crisis is not an easy task. Concentrating on a single logic may seem attractive as it allows making faster decisions and give an apparent sense of security. But it falls short. The “new normal” requires coping with uncertainty and uncertainty requires coping with integrated logics.

DPMC helps companies manage uncertainty through the three integrated logics.