Old-style , top-down thinking will no longer cut it in today ’ s business environment . To unleash the power and impact of openness in your organisation , leaders must be prepared to see their role differently , writes Professor Christian Stadler .
In many organisations , ‘ strategy ’ is often simply in the domain of the CEO and the other board members . Decisions are taken , people are informed ; they do whatever they are told , but often being overwhelmed in that they don ’ t have an answer to the question : “ What does this mean for me ?”
But leading-edge companies are thinking about strategy in a new way . Responding to today ’ s faster , more volatile business landscape , rather than limiting strategic deliberations to small executive teams , they are involving a wider group of stakeholders – employees , experts , suppliers , customers , entrepreneurs and even competitors .
Involving a larger group of people , particularly those on the operational frontline , can help with idea generation and executing strategy in a much more meaningful way . We refer to this as an ‘ open-strategy ’ approach ; derived from open innovation , open strategy offers greater inclusion and transparency , so all staff can be involved . But to adopt an open-strategy approach requires leaders who are prepared to see their role slightly differently ; as a ‘ moment orchestrator ’ rather than somebody who says “ it ’ s my way or the highway ”.
To adopt an open-strategy approach requires leaders who are prepared to see their role as a ‘ moment orchestrator ’
Fostering inclusion through open strategy
Progressive companies are moving towards open strategy as society – and employees – are increasingly looking for inclusion , transparency and hence accountability from organisations . Developments in technology mean that it is easier to scale and connect people when they are geographically dispersed . Knowledge about the role of strategy , and how it is being shaped and implemented , is no longer limited to managerial elites .
In our research with more than 200 business leaders around the globe , participants reported that although only 30 % of their strategic initiatives are open , those initiatives generate 50 % of the revenue and profits . Strategic ideas developed via open discussions are fresher , more diverse , more accessible to frontline workers , and more easily executed . And in companies where top managers have an open mindset , half of all strategic initiatives are open ( compared to less than 40 % in those with a closed mindset ).
The skills for open strategy
Be comfortable with chaos . Are you more Davis or Beethoven ? Are you prepared for things not to be entirely in your control ( reflective of Miles Davis ’ s jazz music ) or do you prefer structure ( like in classical music )? In both of these arenas , there are , of course , great things happening , but if you want to adopt more open strategy , you need to prepare for a bit more chaos .
Embrace serendipity . To execute an open strategy , you have to be comfortable in the knowledge that you don ’ t necessarily need to plan everything in advance . Accept that some things will just happen . Forget the five-year plan and allow yourself to embrace alternative scenarios , even if they don ’ t conform with your ideas about how things ‘ should ’ be done . Lean into alternatives and suggestions .
Find time to read . What do statesman Benjamin Franklin , businessman Bill Gates , entrepreneur Elon Musk and TV star Oprah Winfrey have in common ? They all advocate the idea of spending a few hours reading every day to make sure that you are constantly assimilating new perspectives . Setting time aside for reading can be invaluable in the search for new ideas .
Spend more time with employees . Interacting with those on the frontline will help you gather new perspectives . If you invite people to contribute , it demonstrates your openness . If you can then link your decisions and strategy back to some of these conversations , it will encourage even more people to speak up and share their ideas .
Allow mistakes . The legendary IBM CEO Lou Gerstner encouraged people to make mistakes and fail fast . By acknowledging the power of failure in contributing to people ’ s learning , and being clear that mistakes do not equal punishment , you open up possibilities for so much more innovation .
Barclays ’ openstrategy approach
When Ashok Vaswani became CEO of banking giant Barclays ’ UK retail business in 2012 , he knew that a digital revolution was on its way ; mobile and online banking were very likely pending . But he also knew that he had a 325-year-old legacy organisation of 30,000 employees . Any new strategy not only had to address looming threats to the business ; it also had to speak to the workforce , motivate them and foster a sense of ownership . The bank had to transition from established ways of operating and get ahead of change .
Vaswani believed that if employees had a hand in crafting strategy from the start , they would feel more invested in it , would understand it better , and would do their very best to execute it . Meanwhile , leaders would be able to craft more nuanced plans if they had exposure to frontline concerns , and they ’ d be able to communicate the strategy better .
He decided to introduce a different process to create a strategy for this new world , taking a more open approach . This involved bringing together representatives from various functions across the business , including people from different departments and those with ‘ fresh eyes ’ who weren ’ t bogged down by the bank ’ s history and culture . Second , they decided to involve all 30,000 people in the process via an online ‘ strategy jam ’ – a kind of online conference – to discuss and brainstorm how the business could prepare for the future .
Shortly afterwards , Barclays ’ first mobile banking app was introduced , quickly gaining a million users and today is one of the UK ’ s most successful fintech products . Barclays has actually increased its return on equity , which is not an easy thing to do in this particular environment .
Open Strategy : Mastering disruption outside the C-suite , published by MIT press , is available from 10 December 2021 . Christian Stadler is Professor of Strategic Management at Warwick Business School , Warwick University . The book was co-authored by Julia Hautz and Kurt Matzler , University of Innsbruck , and Stephan Friedrich von den Eichen , University of Bremen .