Business model developer, corporate entrepreneur and transformation manager – how the role of strategists will change

Friday, 09. June 2017

A guest article by Prof. Dr. Julian Kawohl
 

Outside perspective of an insider


I have always dealt with theories, concepts and instruments of strategic management. When I studied business, I learnt essential approaches, which I later practically applied as a chief strategy officer. Now, as a professor for management, I pass them on to my students and in my scientific work to the public. Today, when I meet up with my former chief strategy officer colleagues in interbranch networks, this change of perspective makes me see big and fundamental changes coming up, which will affect the work of strategists.

Digitalization and the redefinition of business models, agile and first of all quickly scaling (start-up) players emerging on the markets as well as the war for rare entrepreneur and tech talents: Digital transformation makes the wheel of change in all markets turn ever faster. This doesn’t stop at the strategy department’s front door, of course. On the contrary: This leads towards new scopes of activities and role definitions for strategists. In the past, the pressure to change onto strategists’ working environment and role definitions has been rather low. Now it’s on the rise due to the markets’ development.

Three new objectives for strategists


But which are the lessons strategists need to learn deriving from those examples and current developments? I see a redefinition of the range of roles and responsibilities, which becomes manifest in three objectives: 1) business model developer, 2) corporate entrepreneur and 3) transformation manager.

1) From the corporate ivory tower to business model developer

Strategists have always faced other departments’ prejudices. Others may find them detached from reality and far away from operational business bringing in the money after all. Due to fast paced markets in the digital age, continuous and long-term top-down strategy plans are becoming less and less helpful since reality often teaches another lesson on short notice. As a consequence, companies need to establish more agile and flexible business model development processes in order to be able to respond quickly. Let’s have a closer look at some examples.

Setup of an innovation unit to shift into start-up mode

lupe webThere is no doubt about a certain trend of setting up special innovation units out of the headquarters of big corporate players. Nearly every week, renowned companies announce the opening of a new location, Berlin being one of the favorites. Lufthansa, the German carrier looking back onto a long history, now opened a new office in Berlin near the tourism hotspot Hackesche Höfe. A group of internal lateral thinkers works together with external start-up entrepreneurs to develop new business and service models, which are supposed to compensate for the shrinking revenues of the core business on day. Besides a hip start-up environment, this offers access to the know-how and resources of Lufthansa’s organizations. DAX-listed companies (e. g. Bayer, Deutsche Bank, Henkel or Telekom etc.) as well as big family-run concerns (like the conglomerate Haniel or the heating specialist Viessmann) and ambitioned medium-sized enterprises (such as steel merchant Klöckner and plastic manufacturer Rehau) seek to get in touch with the scene to invent new ideas and business models. A CEO’s trip to the Silicon Valley often leads to the decision to setup such a format.

Within such a protected space, to be cross-linked to the strategists of the enterprise is essential to create targeted topics corresponding to the priorities of the company. So the classic scope of strategy is expanded by an aspect of innovation and business development becoming increasingly important. The first and foremost task of a strategist is to discern new business models to make up for decreasing core businesses. Similar needs can be found within numerous traditional key industries (e. g. telecommunications, automotive). Already today, software and platform providers are holding the customer interfaces and are competing for new lucrative digital and service business models with traditional players. Evidently, this makes it more difficult for strategists to rate future market settings and the usual cascade-like strategy processes can adapt to this only inadequately.

2) From strategy analyst to corporate entrepreneur

Approaches towards the content of strategies change in the same way as the strategist’s tools. Up until now, the vast use of programs to analyze spreadsheets and visualize content was basic for strategists. However, an increasing number of established companies makes use of start-up tools such as business modeling, design thinking, rapid prototyping, sandbox or scrum for their strategic process. This includes being open-minded to failure and a trial & error mentality when it comes to developing digital strategic innovations. Classic strategy tools like SWOT analyses don’t become obsolete right away. However, a totally new approach towards strategic tasks is promoted by the methods of the start-up scene’s focus on quickly ready-for-use solutions and measurable output. This represents at least a reasonable supplement to traditional strategic instruments.

Digital board room to increase strategy’s focus on application
innovation webIn their innovation center in Potsdam, the software provider SAP created a so called “digital board room”. There, strategists and deciders can access any KIPs relevant to success and set up profound interactive simulations and forecasts of future scenarios in real time and virtually automatedly. Thus, strategy becomes more agile and focused on its application simultaneously getting away from a continuous and long-term high level perspective.

Primarily, these two approaches highlight the interactive way to operate as well as direct customers’ feedback, which have become so popular and well-known under the buzzword lean start-up. The transfer of this concept of a lean strategy approach is now a must according to a great deal of my former chief strategy officer colleagues.

3) From portfolio to transformation management 

In the past the concern’s strategist’s main job consisted in analyzing future scenarios for his or her CEO, preparing them for decision-making and then practically managing projects within the context of project portfolios. Today, the CEO’s and his or her strategy team’s role in the digital transformation of the whole organization is much more active. However, CEOs don’t always take up this role voluntarily. Therefore, a strategist’s motto has to be “manage your boss” more than ever.

Change and communications as new scopes of activities
chance webThe moving spirit and the management of the necessary cultural change within the transformational process has to be guaranteed by the strategy department hand in hand with the CEO. In big international companies I personally watched the responsibility for this change process being passed on from the HR department to the strategy department. In those cases the strategists are seen as a Praetorian Guard for the CEO and they are trusted to manage this hard and challenging transformation well.

For this, strategic conceptual objectives and new business models should be discussed and developed further across the hierarchies via activating forms of communication and interaction (such as pitches, TED-style conferences and world cafés with live votings for presented solutions). This comprises a profound set of operative communication tasks. The department for internal corporate communications used to take care for this. Now, numerous companies shift this kind of tasks to the strategy department. Their primary goal is to plant the coming up transformational tasks across their whole team.

Upshort: Change becomes a constant


Establishing agile and flexible business model development processes in order to be able to react quickly to changes, employing start-up tools for iterative strategy development and driving and managing digital transformation and a change of culture are approaching everyone responsible for strategies and organizing them.

We strategists want to play an exposed role in businesses. Therefore, we need to keep up to this development. Continuously. To put it in a nutshell with a Heraclitean bon mot: “Nothing is as constant as change.” This is also and especially true for strategists.



About the Autor

Prof. Julian M. KawohlProf. Dr. Julian Kawohl is a professor for strategic management at the technical and economic university for applied sciences in Berlin, Germany. He used to work as a strategist and manager for an international provider of financial services before. His scientific work mainly deals with the question, which strategies, approaches and concepts there are especially for established companies to develop business models and structures  sustainable for innovative and agile organizations. As an expert for digital innovation and corporate entrepreneurship, he is a consultant for companies of various branches and, on a regular basis, a key note speaker at national and international conferences. Find further information on www.juliankawohl.de.


More SOLYP blog articles by Prof. Dr. Julian Kawohl: Strategie in disruptiven Zeiten - wohin geht die Reise? (available in German only)