Strategic wavelengths.

From adaptive capacity to anticipatory capacity

By now we know that strategy is no longer only about making long-term decisions. The environment now changes so fast that a three-year horizon already seems far into the future. More and more strategists say that organisations should rely on their adaptiveness to react quickly to their environment rather than concern themselves with (difficult) long-term visions. This seems a plausible statement, but at the same time it raises the risk that only the short wavelength is heard, while significant signals on the longer wavelength are ignored. This can lead to organisations losing their anticipatory capacity.

The environment communicates on different wavelengths

A lot is happening around organisations. The environment sends out all kinds of signals on different wavelengths. The point is that your organisation has the right antennas to pick up all those signals and distinguish them from one another. The first question is whether the organisation is aware of these different signals and how they are picked up and interpreted.

Roughly we can speak of (1) signals that prompt the organisation to act in the here and now, (2) signals that prompt activities that do not seem relevant now but will be in one to two years, or (3) signals that point to opportunities or threats three years away or later. This seems obvious, but we increasingly see that organisations have not tuned their antennas properly to signals that will have an impact on choices to be made in the future. Or they do not realise that future opportunities also call for action in the here and now. The "AM" (short wave) drowns out the other bands, as it were.

Let us look at the single strategic challenge of having access to well-qualified personnel as an example. In some sectors that has become a scarce good and companies have trouble recruiting and retaining staff. It is striking that solutions to this challenge are sought based on the short term (namely hiring external staff or temporary workers), but that the decision for the company itself to invest in developing qualified personnel is not made. While the signals from the environment do not suggest that this scarcity will disappear in the first two to three years and this decision in fact yields immediate competitive advantage. It is also possible that in the medium term, due to technological developments, the required competences will have changed significantly, so that investment is needed not in people but in robots.

The question is therefore whether this second and third signal from the environment are picked up properly.

Informed decision making: who and how?

The first thing companies can do to tune the antennas to pick up the right signals is to make employees responsible for it: who should be listening for signals? If we stick with the example of having access to qualified personnel and label this as of strategic importance for the organisation, it is good to keep an eye on developments in this area. The crux is often that "someone" has to do that. If employees have been appointed who can explicitly report on the sounds from the environment, on the different wavelengths, they can make management aware of those signals when a decision is to be taken.

Organise your "antennas"

Then we come to the "how". In our view, this consists of three parts. The first step is: what does the antenna look like? The second is: what are relevant signals? The third and final step is: how do we incorporate the signals from those different wavelengths into our decision-making?

1. It is busy on the AM wave…

To be able to hear the environment, the organisation or the employee needs to have the right sources. What do we read, how do we inform ourselves, who from the environment do we talk to? Do we have enough sources to inform ourselves on all three wavelengths? Admittedly, a lot of information from the environment reaches us via the short wave. We have a lot to deal with in the here and now. The art is to unravel this white noise and search for sounds that are of a strategic nature. That is not always the case. We speak of strategic signals when they have an impact on: 1) the whole organisation, 2) the competitive capacity of the organisation, 3) continuity and/or 4) value creation (in the short or longer term). Often this does not concern the daily sounds, but the longer wavelengths. It is difficult for people to step out of the here and now, and especially out of their own sector. So make sure you involve enough fresh "contrarian thinkers" who can show you a broader perspective. Sometimes you need someone from outside to filter the signals from the ether that you as an organisation are not hearing.

2. Decide when to act

It naturally takes the necessary investment to get properly connected to these sources, but also to unravel the signals and assess their value. The second part of the "how" question is therefore to draw up a number of leading indicators from the relevant sources that serve as input for the decision-making process. In our example, think of a "scarcity indicator" for the competences you are looking for as an organisation. For the short and sometimes medium term, you can often come up with quantitative indicators. Discuss together at which value you want to receive a notification to act. For the longer term it is more difficult to find indicators or set threshold values, but with a little creativity and logical thinking you can get a long way. You can also put together more qualitative expectations of relevant trends and developments, or still convert them into more quantitative data, for example with an Early Warning System. In short, it helps to have an idea together about what kind of relevant information is (to be found) on which wavelength and how you can interpret it.

3. Organise the right strategic dialogue

Now that you are tuned to the relevant wavelengths and have an idea of the relevant information you are going to listen to, the third and final step follows: how do we incorporate the signals from those different wavelengths into our decision-making? In the example mentioned, it is conceivable that as an organisation we keep an eye on indicators about how large the new intake of potential new employees from schools is, how many (latent; this group already has a job) job seekers there are. For the somewhat longer term you could use expert estimates that, for example, interpret the impact of changing consumer behaviour or of automation on the personnel shortage. Using the indicators and expectations/estimates you can make plans, prepare decisions and determine direction. Decisions for the short term that do not lead you into a dead end going forward and, conversely, decisions for the somewhat longer term that you can also work with in the short term. Have a good conversation about how one wavelength relates to the other and which wavelength, in your view, should carry the most weight in your choices and direction-setting. In short: interpret, weigh wavelengths and already draw up conceivable activities that should be started depending on important indicators or estimates.

Easier said than done

We know it is easier said than done. You may not have the luxury of designating someone to listen to all those antennas and also to have the signals assessed for decisions for both the short and the long term. In that case, take a little more time more often at strategic level to ask one another whether you are receiving all the wavelengths, what the most important signals are and how and whether you are weighing them sufficiently. My colleagues and I would, of course, be happy to think along with you.