Time for a Lean Strategy Rethink

Time and constant change are a pair of troublesome disruptors in the Kenyan business scene. Stories abound of yesterday’s market leaders, who are now on life support systems, gasping for oxygen, because they refused to adapt. Many of the leading companies of today did not exist in their present form 20 years ago.

Given the only constant is change itself, how do companies respond strategically? How do they answer to the need to constantly adapt, to be flexible to consumer and marketplace requirements that can change in a matter of days, or weeks?  If Kenyan business scene has changed,  have  strategic planning techniques kept pace ?  

Time to apply lean start-up and design thinking approaches, lose the old school fat, and work out a distinctive profitable strategic focus.  Easier said than done.

Old school

Business strategy has changed significantly since the days when Michael Porter, Harvard business strategy guru wrote about competitive advantage in 1985, stating that there were only three possible choices. Focus on a niche market, differentiate, or be the least cost provider.

In practice, very few companies and organisations in Kenya have a real strategy.  What they have is more an operational plan, which sets out what they hope to do for the coming 12 months, setting out the tasks required.  Origins of strategy, like Sun Tzu’s The Art of War written in 490 BC have military roots. One of the best examples of a brilliant strategy, goes back to 331 BC, when a 22 year old Alexander the Great defeated Darius’s one million man army, with just 50,000 men by understanding the key leverage point factors.

True strategy requires an insightful diagnosis, on all the dimensions of the business, setting a guiding policy, and then describing the ‘nitty gritty’ details of how and when the distinctive approach is going to be rolled out.

Not easy

Creating a strategy that works is tough. It is tough because one has to make choices, what to focus on, what to bet on. [And, what to leave out.]  Paradoxically, despite the need for solid number crunching analysis, blended with a dash of creative thinking in the diagnosis phase, end result is that good strategy is fundamentally simple.  Typically, based on a clear focus of doing:  a, b and c.

While thinking about strategy has changed radically, there are a few, with medieval Middle Age thinking who equate strategy with doing a SWOT [looking at strengths, weaknesses, opportunities and threats].    A SWOT more resembles the friendly ‘break the ice’ questions your physician asks you at your annual check up.  “How have your been sleeping?  Do you find your work stressful?”   A SWOT more resembles doing delicate neurosurgery with a rusty screwdriver.

Changed radically

Models of successful businesses have changed radically in Kenya, since 2000, with the wider introduction of the internet and now smart phone technology.  Gone is the need for an often expensive cumbersome reliance on  bricks and mortar.  Some of the most successful companies like Google, Uber and Amazon are simply ICT platforms, local  bringing together a number of partners to quickly fulfil customer needs.  Not to be left behind, applications like, for instance, retail site Jumia and several Kenyan taxi apps have stepped in to fill market demands.  

Learning from the experience of firms in  Silicon Valley and Toyota, the lean business start up approach stresses beginning a business on a  small scale [with low start up costs]  experimenting, quickly changing, adapting all the time, focusing on constantly asking “what does the customer really want?”

Hand in hand with the lean business start–up method is the design thinking approach, which stresses action over planning, and gets the entrepreneur to look at problems through the eyes of customers.   

Lean wins

While the lean start approach and design thinking are standard operating procedure in business incubation centres, and in global leaders with a track record for innovation like GE, Google and Microsoft it takes time for ideas to trickle down.  In contrast, it has taken some time for this mindset, way of working, to filter down to businesses in Kenya. 

Though applicable in the NGO community, these ideas have not taken hold.  Perhaps because NGOs rely on multi year donor funding and are less impacted by the competitive changes in client demands, that change in weeks.  

In business, five years plans [generally] don’t work.  As the economist Tim Hartford notes: 5 year plans originated in the time of Russian autocrat, Joseph Stalin in the 1920’s, they did not work then, and don’t work now.  Reason is that in a business, its competitive situation can change in hours. 

Simple call to action

However, in the longer term macro level, in national planning, the demands, like the need to develop geothermal energy sources, tend to stay more constant over time.  Best example of setting out broad areas of direction, meeting Kenya’s needs is the Vision 2030 plan, published in 2007, created by McKinsey & Co for the Kenyan government.  It served as a call to action, based on three pillars that took complex [socio economic] problems, broke them down and made understandable, by setting out turnkey project initiatives, in each of the areas, many of which are being acted on.

Imagine you are [a gender sensitive] Alexander the Great.  What are the strategic levers you can pull to transform your business?  Only way to find out is learn from the best, focus on asking, what does the customer really want?  Introduce a test experimental low cost, product or service, and with little risk, put it through the build, measure, learn and adapt loop, done in a matter of weeks.

These lean start up and design thinking ideas are not new. More than a century ago, Charles Darwin wrote:  “It is not the strongest of species that survives, not the most intelligent. It is the one most adaptable to change.” 

Stella is a former project leader at aCatalyst Consulting excel@acatalyst.co.ke

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