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A White Paper from Singularity Group

Strategy Prototyping Beyond The SWOT Analysis: Leap into the Future and Look Around — Another Way of

Thinking About Strategy

By

Michael D. Maginn

Singularity Group, Inc.

Hamilton, MA 01936

An anecdote from Len Schlesinger, President of Babson College

The President-Elect of a venerable university stood with the Provost as they prepared to

march out in procession for the inaugural ceremony. The Provost was chatting with the

President-to-be.

“The faculty is ready and eager to embark on the journey of analysis to our new strategy.

We are ready for a full year’s work, and we look forward to getting started next

Saturday,“ said the Provost proudly, resplendent in his ceremonial academic robe.

“Yes, I am glad they are ready. And yes, we will get started next Saturday,” said the new

President as they started to walk, “but we will be done by Tuesday. There is no time to

wait.”

The leaders of most organizations probably feel the same way; there is no time to wait to decide how to move into the future. As markets and technologies evolve, all sizes and

kinds of organizations need to learn to flex with the changes. The challenge for all these

entities is to define what the future means for them. How can organizations remain

sustainable and viable in achieving their missions? What does growth mean? How

should they change?

The strategic questions that organizations face are difficult, and, at first, seem like

compromises with no obviously correct choice. The answers often reflect potential

payoffs, but also uncertain and seemingly unknowable consequences.

How does a business expand? Should a business add new services for existing clients or

go into new demographic areas to serve more clients? Will the client base support a new

direction? Will the brand stay intact after stretching beyond its original image?

© 2009 Singularity Group, Inc. All rights reserved

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In small- or medium-size businesses, these decisions are often explored in informal

discussions, at the end of busy days or at periodic retreats or “blue sky meetings”, if at all.

Strategic decision making in smaller companies may not be as high a priority as fulfilling

orders, sales, and operational efficiency. Some decisions might be considered as

strategic, when they really aren’t. New hires that stem from growth, investing in new

equipment, changing vendors are decisions that will help an organization grow, to be

sure, but they don’t really involve new forays of thinking about products, markets and

processes.

In larger organizations, the problem isn’t so much developing direction—coming up with

new strategies is a major C-Suite’s function-- but making certain that everyone in the

organization shares a consistent strategic mental model. The challenge is to gain

alignment not only in what the organization will do to grow or change, but how it will be

done. Developing consensus across any organization is a significant, ongoing and well-

documented implementation test. As Collis and Rukstad lament in “Can You Say What

Your Strategy Is?” (Harvard Business Review, April 2008),

Leaders of firms are mystified when what they thought was a

beautifully crafted strategy is never implemented…They fail to

appreciate the necessity of having a simple, clear, succinct strategy

statement that everyone can internalize and using as a guiding light

in making difficult decisions.

Despite the challenges large and small companies face in answering questions of growth

and change, a strategic direction which provides a clear picture of the future is still

essential. What kind of strategic planning process best matches the need to be nimble,

innovative, and conceptually clear and, at the same time, ensures buy-in and

consistency?

What Can Help? A New Way Of Thinking

Corporations have strategic planning departments staffed by analysts who work with top

executives to develop direction. The more traditional approach used in business is to

develop plans that are highly analytical and data-driven, producing projections and

measurable consequences which eventually serve as targets for success. Based on

these analytics, executives choose a direction which appears to have the most potential

for success. For example, a widget manufacturer contemplating new products might

analyze the current market, the competitors, and, using assumptions embodied in a

quantitative model, create objectives for a new product to achieve. In a way, success is

calculated, and if it is achieved in reality, it is a “win”. The emphasis here is on being right

about the choice made by removing or accounting for as many elements of risk as

possible. This process incorporates the familiar “SWOT” analysis (Strengths, Weaknesses,

Opportunities, Threats) which turns these attributes of an organization into quantitative

concepts.

In recent years, corporations have seen the need to become more innovative more

often and more quickly to compete successfully. As a result, insightful and

entrepreneurial ideas using technology and different business models designed to

intentionally disrupt the marketplace have become highly successful. These new ways of

thinking about business direction are based on more than analytical thinking and

quantitative models. These new developments—for example, the emergence of a

completely new music industry, the spawning of new businesses based on digital

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photography, even the creation of for-profit higher education to name only a few—are

the result of inspiration, creativity and vision. Successful corporations are finding it critical

to leap to new idea development, transforming these into new market directions rapidly

and aggressively. In this approach, there are no guaranteed successes; failure is viewed

as a cost of learning and an opportunity to try again from a new perspective.

This shift in thinking opens a whole new way to approach strategic planning for all

organizations. Frankly, the analytical SWOT-type approach doesn’t fit a smaller, resource

constrained business or larger organizations in a hurry to remain competitive. The danger

to strategic thinking in any organization is becoming hamstrung in volumes of analysis.

Instead, organizations need a process that captures the energy and commitment of

executive, managers, employees and even board members, a process that lends itself to

holistic thinking, intuition, resourcefulness, making sense and creativity and builds

consensus at the same time. As Daniel Pink points out in A Whole New Mind:

What is in greatest demand today isn’t analysis but in synthesis,

recognizing patterns, crossing boundaries to uncover hidden

connections and making bold leaps of imagination.

This approach to strategy adds another important dimension to organizations: speed.

Instead of a year-long process, “bold leaps of imagination” and the subsequent

discussions and planning that result can literally take a few weeks. As Malcolm Gladwell

describes in Blink, “Decisions made very quickly can be every bit as good as decisions

made cautiously and deliberately.”

What process makes sense for organizations in dynamic markets? What would put

intuition to work? What would allow stakeholders in these organizations to tap into the

organization’s identity and history and project it forward? How can consensus be gained

efficiently? We believe a way to capture these ideas is through prototyping alternative

futures.

The Prototyping Approach: From The Back Of A Napkin To Strategic Plan

A prototype is an early expression of an idea. Prototypes are sketches with deliberately

few or no details, high level conceptual models that demonstrate how an idea can

work; a prototype is a tangible, concrete representation. So, in a sense, a prototype is a

working model that can be set in motion, examined, not in the abstract, but by

conceptually looking at actual operations that are easy to grasp.

In prototyping strategies, the future of an organization can be described and illustrated

using a variety of techniques. Regardless of the form the prototype takes, it represents a

relatively clear view of what the organization can be. When there are multiple

prototypes representing a range of options, stakeholders can view and discuss each one

in terms of how it might operate, who it might serve, how it will be funded, etc.

Discussing a prototype is different than discussing an idea or even an intention. While a

prototype isn’t complete, it does present a shape, something to speak to with a higher

level of detail and clarity than an idea or table of numbers. In addition, a prototype has

trace persistence, that is, it lasts longer in people’s minds than an idea mentioned in a

discussion, and it resides in descriptive, tangible visual form on a flip chart illustration or

diagram.

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In organizations, these prototypes are developed by working with key stakeholders in a

meeting setting. This prototype development group needs to be small, knowledgeable

about the organization and its market, and with a certain sense of the organization’s

history. This discussion may be stimulated by a facilitator asking such questions as:

If we keep doing what we do now, how will we be successful? How will we

know?

What else—new products/services-- could we do to add value to our current

customers? What makes the most sense, based on who we are?

What if we took what we do very well now and approach new customers? What

would that look like?

What if we brought new products/services to new customers? What and who

could they be?

What if we delivered what we do differently? What would that look like?

Other kinds of questions are possible, depending on the type of organization. Input from

others not at the table can be gathered in a discussions or surveys before this core group

meeting. The point of this discussion is to express ideas that these informed groups—and

involved stakeholders--already have, unspoken and even unconscious ideas about how

the organization can grow. When these intuitive ideas are tapped in a systematic way,

prototypes of the future emerge.

For example, in working with a non-profit organization, a core group of staff and board

members said one future prototype would be to do exactly what it is doing now, only

better, with improved processes and outcome measures. That concept had been on

the minds of many people in the organization, and now it had found expression in a

prototype. After discussion of what other demographics the organization can serve, it

became clear that there were ideas of taking the organization’s processes and

duplicating them elsewhere with a new audience. Finally, the group proposed that the

organization could add collaborative processes with other charitable organizations as a

new service to repertoire, becoming yet a third prototype of the future.

A financial services company used a different approach. Instead of having a core

group develop alternative prototypes, the Chief Executive Officer was able to literally

draw pictures of three different directions the organization could take. This became the

core of a series of discussions with the executive group, which resulted in agreement on

a direction. Detailed planning followed.

This process also accommodates creative, out-of-the-box ideas as well as the more

predictable. Any idea is fair for building into a prototype as it will be tested and filtered

through the lens of feasibility and alignment with the organization’s mission as the process

moves to the next phase.

When these prototypes are complete, the process shifts to testing and vetting with a

larger audience of stakeholders. That group could mean a board of trustees, selected

executives, or the next line of management. The process in this forum is to present each

prototype in turn and ask for reactions in a highly structured way: “What do you

like?””What else could we do here?”, and “What questions does this raise?” In discussing

each simple question in turn for each prototype, a consensus begins to emerge. The

prototypes themselves change into more refined forms; ideas are added, aspects of

different prototypes clearly become favored or discounted. The group process shifts to

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looking at what it would take to pursue the two or three directions that have emerged.

A different set of questions is used to bring the idea down to a more tactical reality:

“What assumptions have we made?” “What do we know and not know about how this

will work?”

Strategy prototyping as described here has its conceptual roots in the Scientific Method.

The scientific process capitalizes on the reservoir of knowledge in a particular field; skilled

and knowledgeable researchers, intimately and holistically familiar with this knowledge

base, generate working ideas and hypotheses by asking what-if questions. These

hypotheses can be tested for veracity or effectiveness in a rigorous way.

Similarly, in developing a strategy prototype, a knowledgeable core group can posit

different business models or even variations of a model and project the impact of these

on cost, effectiveness, risk, resources, donor base and the like. The result is a sense of

what might work and what unknowns still need to be answered. In a sense, a strategy

prototype is like a “mind experiment” of trying on alternatives and assessing results.

When a set of prototypes are analyzed, the core group comes to agreement on a sense

of direction, based on what models are most appealing at this early stage. The process

goes on to exploring what it would take to put the ideas to work.

Implementation Planning: The Next Step Is Tactical

Once general directions—based on discussion of the prototypes--are identified through

this process, tasks groups are formed around key planning questions that need to be

answered:

Does the direction match and reinforce our current mission?

What’s the best way of doing this?

What capabilities do we need to add or develop to actually do this?

What would make this worth doing? Would benefits outweigh risks?

What would be the ultimate impact of this work on our mission?

Task groups work in parallel over a matter of weeks on answering these implementation-

oriented questions. For example, one task force might look at what an “improvement of

existing processes” would take to put to work. Another would identify steps needed to

“form strategic alliances”. Each task force would have to create a set of

recommendations for the core group to consider. It is helpful for each implementation

team to consider variations on how it strategic initiative might look. For example, the

collaboration team might consider three different models of alliances—leadership, client

or partner. They can then test each in terms of capabilities, value to the organization

and impact. In this way, the prototyping concept—creating rough sketches of how the

end might look—can help focus and clarify the choices being considered in tactical

implementation planning.

What is interesting is that these recommendations are not primarily about direction, but

tactical implementation. Annual plans and objectives for each initiative can be

immediately put to work. So, these plans become an agenda for the board and

management to monitor on a regular basis. The strategic plan becomes a living, working

concept which is brought forward and used to guide everyday activities.

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What Prototyping Strategies Does

Using a prototyping approach gives stakeholders in organizations a sense of urgency

and control over the strategic planning process. The process is designed to stimulate

and leverage intuition and creativity, producing a series of increasingly more refined

models. Ideas are described in concrete terms; obstacles and opportunities can be put

into motion, tested and their impact envisioned and imagined. There is still an important

place for analysis and quantitative thinking in the planning process, when decisions have

to be made about how, why and what results should be expected.

The prototyping approach offers a timely and robust vehicle for any organization to

reach for the future. Because of the need for conceptual clarity and alignment, the

process is designed to optimize consensus and open discussion, ensuring that the ideas

and directions developed through this process are implemented as planned. The

execution of the strategic plan on a regular, weekly basis through programs, projects

and processes is the ultimate test of success. When the process is designed to promote

understanding, support and buy-in, enthusiastic and compliant execution is much more

likely.

References

David J. Collis and Michael G. Rukstad, “Can You Say What Your Strategy Is?”, Harvard

Business Review, April 2008.

Malcolm Gladwell, Blink, Back Bay Books, 2005

Daniel Pink, A Whole New Mind, Riverhead, 2005

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