Key Success Factors for recovery
How do I improve the resiliency of my recovery plan?
Across the first couple months of the shutdown, arts organizations around the world rightfully began making plan and after plan for potential reopening options, primarily as budgeting exercises to figure out what was feasible on what timelines and with what level of audience. That planning coupled with determining how to adhere to new safety precautions for their halls took up a significant amount of time and energy. However, with no end in sight for a return to “normal”, arts organizations must shift from building short-term plans to survive the shutdown period to a longer-term strategy that will ensure the success of their organizations during closure and beyond.
Winners Behave Differently in Crises
We have been reminded again and again across the past few months that we are living in unprecedented times, but there are plenty of lessons to be learned from organizations that emerged successfully from past crises. Following the global financial crisis in 2008, two of the world’s leading consulting firms examined companies who not only emerged more quickly out of the downturn but also had enduring success long after the recovery. While the two consulting firms (McKinsey & BCG) completed the analysis in slightly different ways, they came to similar conclusions about what differentiated those companies from everyone else.
First, and not surprising, these companies were in a better cash position going into the crisis. They could make strategic acquisitions and invest in R&D to capitalize on changing customer needs. Second, these resilient companies built agile organizations, meaning they pushed down responsibility to the front lines and encouraged innovation and testing and learning. (Note: if learning more about organizational agility is of interest to you click here to send us an email. This is an area we can provide support in the form of a virtual workshop). Third, and where we see the greatest opportunity for arts organizations at this moment in the crisis, resilient companies had strategic intent. These companies created a positive, proactive vision for the way forward.
4 Steps to Building a Strategy for the Shutdown Period
To achieve strategic intent, we recommend arts organizations take the following four steps:
1. Start with your mission. This likely goes without saying, but given that your mission is the bedrock change you want to make in the world and what your stakeholders agree to and believe in, your mission should be the guiding light for your strategy during closure.
2. Use scenario thinking to expand your solution set. To build a strategic plan for the shutdown period, it is important to start by imposing some structure on the kinds of futures your organization might face. To do this, we recommend going through the exercise of scenario thinking, not to be confused with the process of scenario planning.
Scenario planning, while a very worthy exercise in the right situation, is typically very time-consuming and best completed before a crisis to plan for what could possibly occur. Scenario thinking, on the other hand, offers a quicker, lighter way to make plans for the situations you are most likely to face. It allows you to simplify the possible futures and consider shorter-term risks you may face and what to do about them. It also offers a way to get out of crisis mode and into more creative thinking about what it would make sense to do in a variety of different outcomes.
To complete the process of scenario thinking, it is recommended that you consider the two most uncertain and important elements. In the pandemic environment, it is actually quite simple to determine those two elements for arts organizations: 1) the virus and 2) the economy. You can see how we’ve plotted these two elements and the potential scenarios they lead to below:
The specifics of our example are less important than understanding what this exercise allows you to do. The process of scenario thinking relieves you of the pressure of trying to figure out which scenario is going to come true. Instead it helps you see four future possible scenarios in very real terms, enabling you to think more concretely about what you should do in response. Organizations can come up with ideas that would work in any of the possible scenarios and use those to guide their strategy. More specifically, scenario thinking helps organizations with three key things:
Raise new challenges. It’s easier to imagine what might go wrong if you put your head in a future scenario.
Question your current plans. It forces you to take a hard look at your plans and ask if you’re only thinking about the best-case scenario.
Get creative with your solutions. With new constraints come new ideas. Scenario thinking should ultimately be a creative exercise that allows you to come up with less traditional solutions.
To make this more concrete, click here to see an example of how scenario thinking can help organizations reconsider their current practices and come up with new ideas that could become solutions.
3. Use scenarios to prioritize ideas. Once organizations have gone through the exercise of scenario thinking and come up with an expansive list of solutions, the next step is prioritizing those ideas. To do so, you should focus on the actions that would work in most scenarios. This allows you to build a stable strategy despite not knowing which scenario the future may in fact hold.
4. Build a compelling strategy statement. While scenario thinking is a great tool to identify actions to take across a range of uncertain futures, arts organizations cannot stop there. They should turn those actions into a clear strategy capable of providing a north star for staff and other stakeholders. It is important to note that we are not talking about a contingency plan for this period of closure until you can get back to your previously defined strategy – we are talking about a strategy specific to this time period, and one that can be boiled down to a form that provides direction and inspiration for staff.
Let’s first consider where strategy sits among other forms of organizational direction. An organization’s mission is its reason for being – the good they hope to do in the world. An organization’s values are the principles and behaviors it will live by to help realize its mission. An organization’s vision is the role it sees itself playing in achieving that vision. And then there’s strategy. While the previous three directives are fairly stable, a strategy defines the next leg of the journey – it lays out the plan for creating value in the world for the foreseeable future to bring an organization closer to achieving its mission.
In 2008 Harvard Business School Professors David Collis and Michael Ruckstad asked Fortune 1000 CEOs two questions: 1) Can you describe your strategy in 35 words or less? and 2) If so, would your colleagues describe it the same way? This work led them to define the components of a compelling strategy statement:
Objectives—what are you trying to do? There are three dimensions to a good objective:
It is specific
It is measurable
It is time bound
Scope—what is the domain where you are trying to make a difference? There are also three dimensions to scope:
There is a named customer
There is a stated geographic focus
There is a defined discipline
Differentiation—How are you going to do this differently or better than their alternatives? There are two critical parts to differentiation:
Value proposition—what is a customer’s reason for choosing you over alternatives?
Core competencies—what are your unique capabilities that enable you to deliver?
Click below to see a diagram of the components of a quality strategy statement, as well as an example statement from Edward Jones.
By defining a strategy for this period that is clear enough to offer direction and inspiration to stakeholders and that is crafted with different possible futures in mind so that its not a constant rewriting of plans, arts leaders enable their organizations to engage in more meaningful work that will lead to a successful future.
If you would like ABA to help you and your team through the process of scenario thinking or writing a strategy statement in the form of a virtual workshop, click here to reach out to our team.
To access our full presentation on improving the resiliency of your recovery plan, click here.