Working Together, Apart Strategic planning processes must adapt to the new normal of social distancing

Making strategy is usually a highly social process, involving the sharing of ideas and discussion between cross functional teams. And even though technology allows us to talk and share documents across distance, social distancing – either because of COVID or because of geographically-spread teams, can hinder that essential human interaction and make strategy processes less effective.

In this article, the author discusses the visible and invisible parts of the strategy process, how they are influenced by social distancing and how firms can adapt their strategy process to be effective even when their strategists can’t sit across the same table.

Brian D Smith, Principal Advisor, PragMedic R ight now, all over the world, cross-functional teams in pharma, biotech, medtech and other life science companies are working on their strategic plans. Large or small, companies usually follow this annual ritual. But 2020 is a very unusual year. Traditional planning processes, punctuated by face to face meetings and presentations to audiences, have been replaced by socially-distanced strategising, where all interaction is necessarily remote. This is a big change, not like anything we’ve

seen before and, unlike most changes in how we work, it has been a sudden change.

For someone like me, who uses Darwinian science to understand how the life sciences industry evolves, this abrupt shift to socially distanced strategising raises two fascinating questions. First, does working at a distance make a difference to strategic planning? Secondly, if it does, how should we adapt to this new normal? In this article, I’ll answer those questions, but I’ll begin with a real-world view of how strategy is made.

How strategy making really works

Strategy making processes are like the human face, everyone is unique. Every life science company has its own process, its own terminology and its own systems. But just as every face has eyes, a nose, a mouth and a chin, every strategic planning process has four essential features (see figure 1). They all start with some kind of sensemaking step, in which we translate information about the market into the knowledge and insights we need to make strategic decisions. Next comes the strategising step, in which we make resource allocation decisions about where and how to create value in the market place. Then comes the implementation step, when we break down the high-level decisions into smaller actions that will be implemented by medical, marketing, market access and other functions. Finally, we take the measuring step, when we schedule all those actions and set up metrics about how much we’ll spend and what outcomes we expect. You will probably recognise these four steps in your own strategy process even though, like any face, its details are unique to your firm.

But my 20 years of working in pharma and medtech, followed by 20 years of academic research into the industry, has taught me that this four-stage process is only half the story. In the real world, there is another part of the process that is never written down and rarely discussed. I call this the shadow strategy 1. The Visible Strategy Process

SENSEMAKING

Translating data into insights for strategising

STRATEGISING

Making choices about where and how we will create value

MEASURING

Scheduling actions and setting metrics about spending and outcomes

IMPLEMENTING

Breaking down strategic decisions into functional activity

process, because it lies, barely perceptible, beneath these four visible steps (see figure 2). Beneath the sensemaking step, we make untested assumptions about what we already know and what we need to know. In knowledge-based industries such as ours, these assumptions are very important because they shape how we create and use knowledge. Beneath the strategising step, we tacitly agree what a strong strategy looks like and how it differs from a weak strategy. That’s important because it determines which strategy is chosen. Beneath the implementation step, we implicitly set and accept expectations about what each function can do and should do. Those expectations determine the way that functions cooperate or conflict with each other. And beneath the measuring step, we reach unspoken agreements about how fast we can move and how effective we can be. Those unspoken agreements determine what we count as success or failure and therefore what

2. The Shadow Strategy Process

we change in the next planning cycle. Experienced strategists recognise that, in the real world, this shadow strategy process goes on beneath the explicit planning process. Importantly, the shadow strategy process isn’t documented and it doesn’t happen in meetings. It mostly happens over coffee, in corridors, or when travelling together. It is an informal complement to the formal process, analogous to an adjuvant to a vaccine.

What social distancing does

The strategy teams I study differ in how effective they are at creating strong strategies. They also vary in how physically close the strategy team is because, even before COVID-19, some teams work in the same office and some are spread around the world. By comparing what goes on in each of these four categories of strategy teams, I can draw some interesting conclusions, as shown in figure 3.

These findings lead to four important conclusions. Firstly, both the visible and

SENSEMAKING

Untested assumptions made about what we already know and what we need to know.

STRATEGISING

Tacit consensus formed about the differences between strong and weak strategy

IMPLEMENTING

Implicit expectations set about what each function can and should do

MEASURING

Unspoken agreements reached about how fast we can move and how effective we can be