From disruptive tech innovations such as generative AI to turbulent economic data spooking businesses and requiring a retrenchment of staff, it’s a tough time to be a business leader.
A 2023 survey by The Economist, commissioned by enterprise software company Planview, lays bare business leaders’ worries: 85% of executives admit their organisations struggle to adapt to change effectively. And although nearly a third of leaders view technology as crucial for strategy implementation, there is a growing recognition that rushing into innovation investments without proper planning can lead to costly missteps.
“Everybody is punch-drunk with change, with disruption, with the whipsaw effect of market challenges and black swan events around the world,” says David Stevens, chief revenue officer for Europe, the Middle East and Africa at Planview. “Global businesses are having to respond rapidly to stay competitive while also needing to drive down costs.”
Everybody is punch-drunk with change, with disruption, with the whipsaw effect of market challenges
Narrowed horizons
In recent years, volatility has meant strategic planning has taken a back seat. Companies used to plan on a three-to-five-year horizon. “They’re struggling to stick to a three-to-five-month plan right now,” Stevens says.
The most successful businesses can respond quickly to opportunities but also ensure investments are realistic and aligned with their core strategic aims. This latter point requires a “back to basics” approach. But what does this mean in practice?
It doesn’t mean stepping back in time and slowing the business down by applying inappropriately heavy governance and control. Rather, it means being able to rapidly compare different investment mixes against benefit outcomes, cost and organisational capacity. It also means making decisions based on facts whilst providing the organisational agility needed in today’s dynamic environment.
Core decision-making chains have been eroded by the Covid-19 pandemic, working from home and the array of new tech available to businesses. “Boards of governors, boards of directors, CEOs and CFOs are all starting to demand a much more connected way of making decisions,” says Stevens.
Accountability at its core
A key aspect of this renewed focus is the shift from project-based thinking to product-oriented investment strategies. “It’s starting to think about funding products and customer outcomes, not funding projects which discretely don’t deliver value,” Stevens explains. This perspective allows for a more holistic view of how various initiatives contribute to overall business value – and a better understanding of what to prioritise.
‘Back to basics’ also means companies must adopt “a much more agile approach to funding” and not be afraid to call an end to pilot projects that fail to meet expectations, says Stevens. Iterative funding approaches allow businesses to be more responsive to market changes and customer demands, without committing vast resources to projects that may become obsolete before completion.
Leaders don’t need to decide between fostering innovation and maintaining operational efficiency. Although agile methodologies have become widespread, implementing them alone doesn’t make a business more agile in its thinking or value delivery. “The ability to innovate more quickly, but at the same time be much more efficient in how you deliver, is the perfect combination that businesses are striving for right now,” says Stevens.
A strong business framework
Strategic portfolio management (SPM) can provide the framework to prioritise initiatives while aligning them with the overarching goals of a business. It brings confidence back to decision-making. SPM provides a “single pane of glass” across a business, says Stevens, giving visibility into investments, processes and their impact on customer value. That approach allows companies to quickly identify inefficiencies and make informed decisions about where to allocate resources for maximum impact.
It’s an approach that Planview provides to its customers using its SPM technology solution. One Planview customer had to rapidly reformulate and repackage many products when its raw material supply chain collapsed due to Russia’s invasion of Ukraine. The company was able to quickly pivot resources and funding from new product development to these business-critical priorities.
While that may once have been a rare situation, such disruption has become the new norm for most businesses. As a result, firms have to learn to adapt. They can only do this if they are able to blend mature analysis with speed and agility. “Business agility is key to surviving in this new world,” Stevens says. “I don’t think any of our customers believe there’s ever going to be a return to business as usual, and transformation is an ongoing reality, not a one-time project.”
