Human-Centric Business Strategy in the Digital Age
The topic of business strategy is timeless. You can’t talk about the growth, competitiveness, innovation and profitability of a business without talking about strategy. However, with an estimated 67% of all strategies failing, it's clear that there is an urgent need to rethink how we design, communicate and implement business strategies.
Strategies can fail for a number of reasons. Sometimes it's due to poor design; other times, what is labeled as a "strategy" is not a strategy at all. Today, the concept of strategy is a central theme in boardrooms and everyday conversations alike. However, the term has become so diluted that many people struggle to articulate what strategy truly is - and what it isn't.
This confusion was the starting point of my recent conversation with two strategy experts: Csaba Toth, author, executive coach and founder of ICQ Global, and Jeroen Kraaijenbrink, internationally sought-after consultant and author of seven books on strategy. Together we unpacked the meaning of strategy, its evolving role in the digital age and ways business strategies can (and should) be humanised.
Baiba Žiga, Csaba Toth and Jeroen Kraaijenbrink in conversation on "The Impactful Leader" episode "Human-Centric Business Strategy in the Digital Age."
The Essence of Strategy
The concept of strategy, as we know it today, has evolved from its roots in "business planning," a term used before the 1970s. Over the past 50 years, the definition and application of strategy in leadership spaces have continued to evolve. Jeroen Kraaijenbrink defines strategy as a process of sustainable and unique value creation. Others see it as a set of interrelated and powerful choices that position the organisation to win.
A true strategy is not merely a long-term plan, a set of goals or a vision. Instead, it is a cohesive blueprint for sustainable and unique value creation embedded into the daily operations of a business. The distinction between strategy and goals is crucial: goals are endpoints, strategies are the pathways to those endpoints.
One critical aspect of strategy is its integration with daily work, making it relevant and actionable rather than just a top-down directive. Traditionally, strategy has been seen as a sequential, binary process, largely influenced by its origins in business planning. However, today, a successful strategy involves every level of an organisation, from executives to front-line employees, fostering a unified, collaborative approach that adapts and evolves with the business landscape.
Human-Centric vs. Relational Approach to Strategy
As businesses navigate the digital age, a human-centric approach to strategy has emerged as a key pillar of success. This approach emphasises putting people at the core of strategy formation and execution, balancing technological advancements with the intrinsic value of human relationships and emotions. It involves creating strategies that resonate with employees' values and experiences, fostering reciprocal, healthy connections within the organisation.
However, this approach is not without its critics. Sabrina Meherally, a research and design strategist at Pause and Effect, challenges the human-centric model, advocating instead for Relational Design. In her 2023 LinkedIn post, Meherally argues that Relational Design integrates Indigenist philosophy into creative problem-solving, a framework that has existed since time immemorial. This perspective shifts focus from centering only humans to viewing humans as part of a broader relational web of ecosystems, where every element of life carries equal importance.
Human-Centered Design vs Relational Design. Illustration by Clementina Consens, Pause and Effect. Image retrieved from Sabrina Meherally's LinkedIn post.
Relational Design also informs how we engage with each other and our external environment, encouraging a move away from transactional relationships toward building reciprocal, healthy connections that respect the agency, dignity, and knowledge of all life forms.
The Future of Business Strategy
Despite the best intentions, many business strategies fail due to a gap between strategy formation and execution. To address this, businesses must build adaptive strategies that can evolve with changing circumstances. This involves breaking down long-term strategies into smaller, manageable components, allowing for flexibility and adaptability.
Constantly monitoring progress against objectives is crucial. This includes being vigilant about external triggers that might impact the strategy's direction. Building strategies from the bottom up, involving employees in the process, and refining the vision regularly are essential steps in closing the strategy-to-execution gap.
Effective communication across all levels of an organisation is also vital. Large-scale surveys reveal significant differences in perceptions of company culture and operations between leaders and employees. Bridging this understanding gap can unlock untapped strategic potential. Leaders need to focus on creating a culture that supports strategy execution, recognising that strategy is interconnected with the company's culture and processes.
Conclusion
As Jeroen Kraaijenbrink highlighted during our conversation, business strategy has changed since 1970s, but not nearly enough to meet the challenges of today's complex business landscape. As we refine the meaning and application of strategy, we have the opportunity to broaden its scope to include not only the people within our organisations but also the ecosystems they impact. By embracing more inclusive and adaptive approaches, businesses can ensure their strategies are not only effective but also sustainable and socially responsible.
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