BY NATHAN SIMON, SENIOR DIRECTOR OF RESEARCH FOR ALM INTELLIGENCE
The French medievalist, Marc Bloch, pioneered an approach to history that revered facts not theories, delved into the behaviors and mindsets that turned the gears of cause and effect, and did not shy from
revealing instances where sufficient facts lacked for drawing firm conclusions. He penned a volume on France’s experience in the Second World War, Strange Defeat, before
a German firing squad executed him for his role in the
Resistance. His critique of France’s military and political
leadership traced the country’s defeat to a failure of ideas,
or more precisely one idea. Armaments and infrastructure
(the infamous Maginot Line) were not principally to blame
for France’s dramatic defeat. Certainly, France’s soldiery
was equal to its neighbor’s. The root was a paralysis engendered by the military leadership’s inability to appreciate the fundamental strategic implications of speed.
Digitization is paralyzing many strategy consultants in
much the same way. Strategy consultants built their services in direct response to the longstanding client critique
that they produce uninspired or infeasible strategies at
exceptionally high cost. The name of the game for making strategy relevant is securing client commitment to execute across the leadership hierarchy, which consultants
do by producing irrefutable economic evidence and then
installing management systems designed to transform
commitments into actions. That game works so long as
the objective of strategy is to make positional bets (where
to play and how to win). Digitization, however, changes
the strategy game by simultaneously making markets less
predictable and allowing companies to execute much faster against more provisional bets. Client commitment is no
longer the endgame, but many strategy consultants continue to chase perfect foresight to back up bigger bets, thereby closing off rather than opening up strategic options.
Bloch pointed out that the failure to appreciate the speed
of mechanized warfare not only preserved several outdated
assumptions about the drivers of strategic advantage, but
also contributed to a singular lack of imagination on the part
of France’s commanders. That, in turn, blinded them to the
lessons they might have learned from Germany’s invasion
of Poland the year before and compounded the effect of
initial setbacks by making it exceedingly difficult for those
commanders to learn and react. While there were instances
of tactical experimentation with new ways of fighting, ab-
sent a coherent strategic vision they stayed isolated.
“When one has become too much fuddled by words
and theories,” Bloch reasoned, “the only safe guide is a
sense of the facts, a power to make decisions, and an abil-
ity to improvise.” Consultants are heeding this advice by
fostering experimentation with new ways of working—ev-
erywhere, including clients’ back office functions, supply
chain operations, and marketing and sales teams. But those
tactical wins are not adding up to strategic advantage for
their clients, as various studies continue to report as many
as 90 percent of digital transformation programs fail. Tacti-
cal experimentation cannot alone fill a strategic gap.
The objective of strategy today is not to pick winning
bets but rather to make the organization faster. That makes
planning more about continuously managing change and
less about one-off moves. It is less about problem solving
and more about a transformation journey. Some consultants are innovating with design thinking for uncovering
uncommon facts drawn from unfamiliar sectors or bots
and artificial intelligence for automating and accelerating
the digestion of much larger volumes of facts.
Bloch’s analysis also revealed the way in which a change
in the idea animating strategy carried over to the assets enlisted to carry it out. Mechanized warfare elevated the importance of tanks and airplanes over that of concrete. Differentiation in the era of digitization issues less from tangible
assets such as companies, structures, and equipment, and
more from intangibles such as operating models, ways of
working, and other types of intellectual property. That makes
the classic linkage between strategy and M&A consulting
less relevant and puts a premium on consultants’ ability to
help their clients understand the value of their portfolio. But
those intangibles are messy: tough to measure and acquire.
What will not change is that strategy, whether in business or war, will always be a leadership problem. Perhaps
the biggest barrier impeding strategy consultants from
regaining their relevance is changing client leaderships’
mindset from prioritizing their ability to pick winning
bets and drive towards them to the ability to accelerate
the speed at which their organization can learn and adapt.
