Developing and adopting the right strategy has never been a more essential than it is now – it’s THE key to competing with advantage amidst the chaos of COVID, AI, Automation, Cloud, Subscription, new ways of working, and a host of other fundamental shifts changing how, where, and when companies compete.
In practice, most strategy development is mired in a decades-old mindset – it’s generally treated as an hypothesis-driven event or project: should we enter this market? How about this acquisition? Where should we apply GBS or ZBB, and how quickly? Can we consolidate operations to improve performance? It’s an event, it’s slow, it’s at a single point in time, it’s expensive, and it’s static – a lethal combination in this dynamic, evergreen world. Enter the concept of a ‘Strategy Twin’….
Companies have adopted, as of late, they concept of a ‘Digital Twin’ – per Bernard Marr, ‘an exact digital replica of something in the physical world’. Digital twins allows an enterprise to model new products, facilities, processes, policies and other corporate constructs without the messy business of actually making the changes in the real world. Bernard Marr’s article outlines 7 real-world uses of digital twins, bringing the concept to life – it’s worth noting that the majority of applications related to Supply Chain / IoT, Engineering, Product Development, and Plant / Equipment Design and Maintenance. For additional perspective, see how Digital Twin helps innovate via MIT / Sloan.
And it begs the question: if Digital Twins improve operational modeling, product design, performance prediction, decision making, speed of change, number of scenarios considered, and impact quantification, then where’s the digital twin for your strategy? The ‘Strategy Twin’? Could a Strategy Twin revolutionize your strategy process?
We believe the answer is a resounding Yes, and that strategy as a function, whether managed in-house or via a consultancy, must evolve to be a real-time, evergreen capability. Strategy development will models scenarios, actions, levers, impacts, and outcomes, supported by a digital representation of the enterprise, seen through a strategy and performance lens.
Going forward, companies will necessarily build, maintain, and use the Strategy Twin models and simulation capability around products, markets, competitors, costs, operations, talent, and other key variables. Key decisions and outcomes will be evaluated and optimized in hours rather than weeks. Consultancies leave behind a dynamic, interactive models rather than an instantly out-of-date, static powerpoint. Strategy becomes a process instead of an event. ‘Cost to Strategize’ is reduced.
How might this play out in practice? Picture a scenario where you’re asked to evaluate extending an existing product into a new market. What if…in hours, you can model pro-forma impacts to balance sheet, income statement, and identified key levers, risks, gaps, capabilities to build / buy, partner and customer impacts, optimal timing and critical success factors?
It’s compelling vision – and one we believe will emerge as a critical component of the successful enterprise. How might you adopt and apply the ‘Strategy Twin’ to your business?
Solera Strategies 