There is a tendency in many organizations to call things ‘strategic’. It makes them sound more important. But how do you know just how ‘strategic’ a project or initiative really is?
‘Strategy’ means different things to different people. However, there is a surprisingly simple test of how strategic a project or initiative is. It is the extent to which a project is ‘business as usual’ or ‘business unusual’. That is the CEO’s definition of strategic – one that denotes not just importance but also a focus beyond the short and medium term.
‘Same as last year?’ asked the butler in the TV classic programme. ‘Same as every year!’ replied the elegant lady at the top of the empty table. But it wasn’t the same as last year – the elderly lady (having reached 90) has outlived all her guests from previous years. As the English Butler filled the glasses at each empty place, he also had to drink them – getting drunker and stumbling more precariously with each round.
In grainy black and white, this is a staple television favorite shown every Christmas in countries from Estonia to Norway. It is simple humor, but also a powerful allegory communicating a deeper message about the constancy of change.
Now imagine asking your colleagues both up and down the organization that question: ‘Same as last year?’ If they answer: ‘Same as every year!’ Then, perhaps you had better watch out!
The business way of saying ‘same as last year’ is ‘business as usual’. Here the focus is on the short to medium term, with the smooth and efficient operation of the business on a daily basis. The objective is to ‘run a tight ship’, leveraging existing processes, systems/technologies in support of existing customers, products and channels. It is quite literally business as usual, with performance being measured in terms of predictability, visibility and control.
Business As Usual initiatives are relatively low risk and easy to run. In the hustle and bustle of the day-to-day, leaders could easily spend all their time focused on the everyday running of the business and meeting short-term performance targets.
Business As Usual is typically focused on this quarter and the next. Just like the lady in the TV sketch, the risk is that the organization will be overtaken by change.
“Managers minimize risk and experimentation to increase predictability; leaders monitor risk and accelerate experimentation to foster breakthrough.”
Many strategic projects and priorities are far removed from the everyday run of business. They involve something new – a new process or system, perhaps a new product, channel or business model. This novelty is what makes them strategic – they are about shaping the future.
Just how strategic an initiative is depends on whether the initiative falls into the category ‘business as usual’ or ‘business unusual’:
Business As Usual – The goal might be to improve efficiencies or profitability by 3%, 5% or even 10%. Such ‘business as usual’ initiatives aim to improve the everyday running of the business by sustaining and enhancing its core – that is its existing processes, products, markets and technologies. They build on the past sustaining its performance into the short and medium term.
Business Unusual – Major or Massive gains tend to derive from doing something very new and very different. This involves working back from a future vision of success, seeking to transform the business through new products, technologies, business models, etc. ‘Business Unusual’ levels of ambition might be 35% of revenue will come from new products and technologies within 3-5 years. The goal might even be 10x in the case of a moon-shot. In either case, Business Unusual typically takes a longer term view – something that can be difficult for busy managers when they are under pressure to meet the quarterly target.
Some will argue that all Strategic projects or initiatives are by definition business unusual. In reality, however a strategic initiative is rarely completely ‘business as usual’ or ‘business unusual’, but can be found somewhere on the scale between the two. It may combine some elements of the past with some elements of the future (e.g. extension to an existing product range or expansion into a new but adjacent market segment).
Business Unusual is a proxy for complexity, as well as for ambition. The closer an initiative is to ‘business unusual’ the more it is likely to stretch and challenge the organization. Also, the more sophisticated its execution must be – let’s explore why next.
If a strategic project is simply a continuation of what has gone before, then it is probably not ambitious or innovative enough. However, the greater the ambition the more risk, uncertainty and disruption a project or initiative may bring.
Business Unusual means that your strategic projects are likely to challenge the way that your organization presently works and perhaps even thinks. By definition, it means a leap into the unknown – doing something which is novel, perhaps even untried and untested.
Because strategic projects are ‘business unusual’ they cannot be delivered using the normal every day ways of working – the typical working methods and processes2.
Strategic projects that are managed as ‘business as usual’ will inevitably struggle when it comes to speed and agility (what we call project velocity), collaboration and innovation. So, a new way of working is required. Also, a new approach to project management.
“…approaching highly uncertain projects as though they were business as usual was a trap.”
Rita McGrath & Clayton Christensen3.
Here is a quick test of whether your initiative is ‘business as usual’ or ‘business unusual’. Using the table or matrix below, find the number that key people feel best reflects your project or initiative. Here is how it works:
Got a balanced portfolio of projects and initiatives – one that balances risk and return, short term and longer term? Use the Business As Usual Test to find out. Map each project or initiative on the grid and find its corresponding number. Then find the average of all the numbers for your portfolio. A balanced portfolio will be close to ‘5’.
If this grid was an early map of the world, then the 9th box is where the text ‘here be dragons’ might be added6. If it was a map of 19th century North America it would be the ‘Wild West’ – it is dangerous or unexplored territory.
Projects here are the most unusual, of ‘business unusual’. They entail high levels of risk and uncertainty and are laden with hypothesis and assumptions. However, it is here that the most ambitious strategies are likely to emerge. It is here that the potential for hockey stick7 or 10x levels of growth exists8.
Depending on the result of the Business Unusual Test, you may need a new way of working on your project or initiative. If your project or initiative was a 5, 6, 7, 8 or 9 on the grid, then it will likely require new levels of:
All this presents challenges for hierarchical organizations, with multi-year planning cycles, bureaucratic procedures and departmental silos. Indeed, when you add up the requirements for agility, innovation, teamwork and collaboration, it all amounts to new ways of working on projects and teams.
‘With speed low enough and predictability high enough, certain methods work just fine in organizations. But these methods cannot possibly work when speed goes up significantly and predictability (predictably) goes down.’
John P. Kotter9
The extent to which any project or initiative is ‘business as usual’ or ‘business unusual’ and the implications for how it is managed is systematically explored via Pitstop Analytics™.