Strategic Radar

Forces of Change

Darwin’s Finches and the importance of strategic adaptation


The Galapagos Islands are a wonder of the natural world with over 19 islands surrounded by hundreds of islets that straddle the equator of the coast of Ecuador. They are famous for having an amazing range of unique animal species, giant tortoises, iguanas (or dragons), fur seals, sea-lions, sharks, rays, and nearly 30 different species of birds.

They are also famous for the influence and thought patterns of the great Charles Darwin. His discoveries in Galapagos ultimately changed our perceptions and beliefs around humankind, and they provided lessons which can still be thought about, today. On his visit to the islands, Darwin discovered several species of finches (amongst other things), that varied from island to island, and this helped him develop his theory of natural selection and evolution. He found that the finches were each fundamentally the same, but with variation in the size, beaks, claws, and song. Darwin’s conclusion, that as the islands were distant from the mainland, the birds had arrived there in the past and adapted to suit their surroundings. There need for survival drives the need for adaptation, and this improves the likelihood of surviving.

One conclusion from the Galapagos Islands is that adaptation is thus critical for survival. It is what creates the space for species to flourish and survive. When you consider how evolution and adaptation works, it does outwardly seem quite easy, (even though as a non-scientist I really have no idea).

From an organisation’s perspective, adaptation is also critical for survival. The world is constantly changing, and so fast that organisations simply need to adapt (or die). From the outside, perspective, it is effortless to critique Blockbuster or Nokia and say they didn’t adapt quick enough. However, in reality, very few organisations actually do adapt quickly enough, despite a brilliant strategic plan that no doubt sets out all the key trends such as the changing market; the impact of technology, the influence of data and the digitisation of the consumer journey.

So, my question is, why can’t organisations and their leaders adapt and survive, like the animals on Galapagos Islands?   I think there are three key reasons this can happen.

Firstly, it is a failure in the strategy process. I am quite sure most good strategy documents identify key trends and developments impacting an organisation. Indeed, the response is most often in a three-year strategy document (or similar) with detailed annual plans.

However, the failure to understand, comprehend, and adapt to the key trends creates a situation where in the end, it is too late to adapt- the end is nigh! Surely this inevitable, given that the technology cycles outpace planning cycles?

Secondly, organisations dumb down strategic problems. I think this is natural and is how organisations and leaders can rationalise their lack of response or the lack of speed to respond. It is a natural reaction to make a strategic challenge less daunting by turning it into a problem that can be solved with tried and tested tools and mindsets. You can imagine a giant strategy deck, with an investment plan underpinned by a financial budget that stretches in the future.

Given the pace of change, this is a truly terrible way to make strategy, even if it gives a sense of confidence.

Finally, in times of pressure and dramatic change, organisations look inward and look to maintain profit and margin by cutting costs and becoming more efficient. Indeed, this makes sense, not only from a maintenance of margin perspective, but from a control perspective. This is important, as cost is within an organisation’s control and can be managed with relative precision using technology or six-sigma. However, at the very time, an organisation should be looking to adapt, their actions are more inward focused, while the real conversation is outward focused.

To be successful at strategic adaptation organisation should:

  • Understand that strategy is not about perfection; it automatically comes with ambiguity. Strategy is not about expense control, it is about revenue and growth, and to achieve that organisations need to accept ambiguity.
  • Focus on the real metrics that matter which should be outward focused, looking at customer satisfaction, listening to the customer journey.
  • Understand the strategy is not a three-year PowerPoint deck; it is about having an always on strategic mindset.

The Galapagos Island’s can teach organisations a lot, because ultimately a Finch, a simple little bird, finds it easier to adapt to change, than most organisations. You would think the desire to survive, would be just as strong.


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Strategic Radar

Strategic thinking, fast and slow

Electric lighting effect, abstract techno backgrounds for your design

One of my favourite books is ‘Thinking, Fast and Slow’ by Professor Daniel Kahneman. The book has won numerous awards and discusses how decisions are made and bring to head the debate over System One or System Two thinking. It is a book that every time you read, you can get something from it, and recently I started to think about how it could be applied to an organisation and the strategy process.

I think that understanding how an organisation and its leaders think is critical, for both an organisation and the creation of its strategy. I also think if you don’t know how your organisation thinks and makes decisions, you will find a history of poor strategic decisions and a strategy that does not deliver.

What are System One and System Two decisions?

Think about how you would decide what drink to buy, what television show to watch or even whether you should mow the lawns. These are all simple decisions which you make unconsciously with very little information. You don’t need to think too hard about it- it just happens. This is known as System One thinking, described as an “automatic, fast and often unconscious way of thinking. It is autonomous and efficient, requiring little energy or attention, but is prone to biases and systematic errors”.

On the other hand, System Two thinking is an “effortful, slow and controlled way of thinking. It requires energy and can’t work without attention but, once engaged, it has the ability to filter the instincts of System One”. Now think about decisions such as house to buy, what career to choose or even what university to go to. These decisions require attention, thoughtful responses, and care. While you may have feelings about what house, career, or university to attend, you have to put some serious thought into it.

How does this work in an organisation?

It has been argued that today’s leaders will be bending their minds to the business of winning with a greater intensity than we’ve seen for generations thanks to technology, data and a greater understanding of the world.  But the simple truth is that whatever resources they might have at their disposal, the only factor that will allow their deliberations to be more meaningful and insightful than competitors and previous leadership- is the speed and accuracy of their problem solving and decision making — in short, their ability to think.

Thus, it follows that given an organisation is made up of people, it makes sense that decisions can be made which are either System One or System Two. It then becomes plausible to imagine that most leaders and managers will use ‘System One’ thinking wherever possible to minimise effort and to make decisions quickly. As we know, ‘effort’ is hard work and typically in short supply and in the fast-paced business world, decisions need to be made quickly.

This would be of little concern if we could trust our System One thinking to have the consistency, purpose, and reliability required for high-quality problem solving and decision making but as Kahneman argues, such trust would be misplaced. Here is the scary part, we cannot tell when our System One responses are based on sound judgment or when our System One is simply making things up.

On the surface, it might seem that the answer is simply to engage in more controlled, effortful, analytical System Two thinking as individuals and as an organisation. Well no, and it’s not that easy. The notion of everyone constantly questioning their own thinking would be tedious, to say the least- assuming you had the time.

In reality, our System Two minds are much too slow to act as a substitute for System One in routine decision making and anyway, as our thinking, whether System One or Two, is largely invisible, how can we be certain System Two thinking is completed with the right degree of rigor?

Each of us will have developed our own idiosyncratic approach to System Two ‘analysis’ and some of us will have developed better approaches than others. So, to optimise an organisation’s thinking, leaders and managers will need to know how to use their System Two minds, when to use them and, crucially, when to use them together. It might be as simple as providing guidelines and procedures for gathering, sorting, sharing and using the information needed to feed their System Two minds and together, produce the highest possible quality solutions.

What does this mean for strategy?

All leaders know that strategy is important, and most find it scary, because it forces them to confront a future, that they can only guess. Worse, choosing a strategic pathway is scary for an organisation as it requires decisions, that by their very nature requires possibilities and options, to be cut off. And of course, any leader will fear wrecking their career, if they get the decisions wrong.

I think it is easy to assume, that you must take a System Two approach in solving strategic problems or creating a strategy. Surely it has to be like this, where the strategic thinking is thoughtful, considered and careful. After all, a company strategy should not be made by intuition.

When a strategic problem presents itself, the natural reaction is to make the challenge less daunting by turning it into a problem that can be solved by taking an approach with tried and tested tools. You can imagine how it goes with leaders, the odd consultant, a financial analyst all working together to deliver a strategic recommendation. A strategy is formed, a plan is created supported by detailed spreadsheets that highlight costs and revenue and instant success. Everyone feels a lot less scared, and are confident in their organisations future.

But I think what happens, is leaders mistake a long drawn out process, with a beautiful PowerPoint deck as a System Two strategy. When in fact, it will be delivered using System One thinking with a strategy process, that is not solving the strategic problem, but acting as a safety blanket for those key decision makers.

Examples of this could include:

  • Not making sure you get the strategic question right, by rushing into strategy creation.
  • A key leader in an organisation saying ‘fluff’ statements such as we will have the largest market share; our brand will target the Millennials and let’s go digital. All good strategic statements, but they are based on intuition, that may not work.
  • Strategic options being discounted because they have not worked in the past. The problem is sometimes good strategic options don’t work, because of poor implementation, not because it was a poor idea. Often, this mindset prevails, and it was driven from leaders who have been in an organisation for a long time.
  • A strategy relying on a customer view, that matches the views of the leadership team or relies on outdated customer research. I have never understood how a strategy is developed without understanding the customer- it is an absolute basic.

Having a system two strategy, driven out of system one thinking, is a truly terrible way to make a strategy. Sure, it might provide some comfort, and even inspire an organization but in essence, it may very well fail. I think it happens because strategy often needs to be created to a time frame, and this can mean conversations are hurried and not thoughtful. It might happen because the strategy is left to the strategy department, and not the domain of an organisation’s leaders. It might happen because it is an excellent and natural way of removing the fear of the unknown and replaces that fear with a comfortable PowerPoint blanky!

Sure, this may be a great way to cope with the the fear of the unknown, but fear and discomfort are an essential part of strategy making. In fact, if you are entirely comfortable with your strategy, there’s a strong chance it isn’t very good. You need to be uncomfortable and apprehensive: True strategy is about placing bets and making hard choices. The objective is not to eliminate risk but to increase the odds of success.

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Forces of ChangeStrategic Radar

Breaking market cohesion


I love reading articles about how disruption has killed well-intentioned organizations. How Nokia didn’t pick the success of a touch screen phone, or how Kodak missed the onset of digital photography. What strikes me almost everytime, is that these organizations have bright successful leaders driving them, they are passionate and ambitious. In fact, if you were to talk to these leaders on a one-on-one basis about our world, they might say words such as “unprecedented”, “nationalism”, “social media”,  “globalization”, “innovation”,”i-something” or “Trump”.

Such a list would be easy to come with, as everyone understands these words, their meaning and the change they represent. They are unavoidable as we are all in our own way driving the change, as it is making our lives more connected and easier. Many of us love buying digital books, even though it puts local bookshops out of business. We may have simultaneously bought into digital music (from iTunes to Spotify) while lamenting the loss of record and CD stores. Most of us understand this world- we get it, we participate in it, we benefit from it, and we help shape it.

So why then, when you bring individuals together in an office or business environment, they think their organization, their market is somehow immune from the dramatic shifts of the twenty-first century.  Its almost as if groups of leaders believe somehow their industry is somehow vaccinated against the changing world.  They do this as a collective, while ironically, as individuals they are using their smartphones to order lunch on an online app.  How is it, they ignore the signs, get so blinkered, and get so afraid- when they are all simultaneously driving and participating in redrawing landscape?

There is no doubt many reasons for this, and they would differ from individuals to individuals,  market to market, country to country. Whether it is leadership, a focus on short-termism or even a reliance on a “wing and a prayer,” it does not negate the final, inevitable outcome.

One fundamental reason I think that is often forgotten by commentators is the impact of an organization’s view of a market; a view which is often driven by its leaders by a belief system molded by their experience and success in a market. At its most basic level,  a market is merely a social structure to exchange goods and services. Moreover, like any social structure, it has a cohesive set of beliefs and actions on how it works, and how it holds together. The seller understands how to manufacture a product, how to attract customers and how to provide a provide a level of service. The customer knows how the market works, warts and all, and they have a confidence and trust in the processes (or not).  Competitors know how to compete, you can even predict what and when they will do it. Even the government understands the market social structure, and they regulate to ensure it continues to operate efficiently and effectively, that it does no harm and that it has enough structure, to be taxed.

This is what a market is; it is not special; it does not really have a magic formula, and it just is held together by a gravity of beliefs that binds it for everyone. This is a cohesive, well-ordered, predictable market, in a cohesive well-ordered, world.

Of course, it is not all sunshine and lollipops. The world is not predictable, market order and cohesion can be broken, disrupted, ripped apart- just like that. The norms can be thrown out the window as accepted conventions, such as buying printed books from bookshops, are ignored. For the organization which didn’t respond, it is a revolution, full of death and destruction.

As a new market rises, it can be beautiful, enticing and fast- in ways that can not be imagined. It can create enormous value and for the consumer, it could mean convenience, speed, and lower prices (or all of the above).  For a government and regulators, it is confusing. Regulations that kept a market operating are now outdated, and as shown recently, they are not even sure how to tax sales or profit on the products and services of the new world.

It is not easy for any leadership team to know when the market cohesion they so love, is going to be outdated as a video store. They will seek solace in the annual strategy view with slides that will say they have done enough in their two-dimension view of the market. They will perhaps hold on to it like a ‘blanky,’ while reading the news on their iPad, riding in an Uber.




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Forces of ChangeStrategic Radar

The tension of disruption


What is disruption? Where does it come from? What drives it? Literally, these are the $64 billion questions leaders, academics, media and entrepreneurs want to know.

Often the easy answer to this (and similar over-asked questions) is to look at where digital innovation is at, and perhaps plot a similar path with an ‘old school’ product or industry. Perhaps, this approach can be seen with the ‘Internet of Things’ where product and market development can be centred on digital and developing new ‘things’ or markets to apply it to.

We need to look much harder at this subject, as it will provide insight in any organisation’s strategic management, so it needs to be understood. The problem is there is certainly no homogenous answer here- just google the question- and you will see the variety of thoughts that exist. And anyone who thinks there industry will not be disrupted, is naive.

Clayton Christensen and friends describes disruption as a “process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses…. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality—frequently at a lower price. Incumbents, chasing higher profitability in more-demanding segments, tend not to respond vigorously. Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success. When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred.”

Good description (and there are many)- Christensen et al describes the process and evolution of disruption, and perhaps gives some insight into what are the drivers of disruption. I wonder though if the concept of disruption is confused with other key management functions of an organisation. There will always be underserved segments available to be exploited- this is just a function of strategic marketing. And new products and innovations could always create new segments and markets- while it some cases it causes disruption- isn’t this the role of product development, market research and innovation?

This doesn’t explain the level of excitement that can come with the term disruption.  Sure, we quite rightly celebrate the success of disrupters such as Apple, Uber or Netflix and learn about their great insight that lead to their market changing innovation(s). We quite rightly shake our heads about Nokia, taxi companies or Blockbuster Video and wonder why they didn’t have the leadership to prevent the disruption. We love the stories, we read the many books and watch the documentaries. We forget that many organisations whose industries have been disrupted, have failed (are failing), more often terminally.

So, is disruption then more about organisational failure-; a failure in leadership, a failure of strategy, a failure in understanding the customer and a failure to get access to capital. Perhaps a disrupted organisation has all of these in place, but still failed- then for me it is a failure to be nimble and agile.

It does make you wonder, what industries are prone to be disrupted? What are the characteristics that make them a potential target. If you understood this, then maybe an organisation could be prepared and prevent the disruption. Imagine if Borders had started selling books online, before Amazon?

Again, a little research can provide the usual suspects. Industries that have not embraced the digital age, industries which have slow growth, or industries that have high profit margins. But as with the discussion on what disruption is, deeper thought must also be applied to this question. And once again, there is no homogenous answers.

One I see as important is the role of unresolved market tension whether it driven by consumers, the media, competitors, or the Government.  For any market, you can see the existence of tension (usually from the media) where it can range from simple disagreements between stakeholders, complaints about product quality or products not delivering up to expectation. Or even an out-and-out dispute with regulators or the Government. Some times its fleeting, sometimes it features on consumer television, and sometimes the media gives it a logo and makes an extended story out of it (which you most definitely don’t want).

So how does it drive market disruption. First of all it provides a signal- tension says there must be a better way; tension says solve the dissatisfaction, make it easier; tension says to those who like to disrupt, there is an opportunity here.

For example, let’s consider the success of Uber. Is it their digital offering which made them successful? Or is it the fact that Uber solved the tension of an interaction which for the consumer had so many issues from safety, reliability, to pricing or ease of use. The fantastic digital app that is needed to use Uber- is simply the vehicle which resolved the tension (pardon the pun!).

Remember all the controversy about pirating music with Napster. For those who are young, it was software which allowed sharing of MP3s from June 99 to July 2001, when it was shut down as an outcome of a complex legal dispute, centring on breach of copyright. What it did though is address the tensions which may have existed for consumers about access to music- not only how they purchased it, but also how they listened to it. While ultimately Napster did not have the legal vehicle to solve some of these tensions- it did bring the issues to the collective consciousness and arguably helped Apple in their launch of iTunes.

Unresolved market tension is not the only driver of disruption- but I think it is a key ingredient. Thus, it makes sense from a strategic planning perspective, that an organisation should look at the tension which exists in their market, now and in the future. It should look at media commentary, the direction of regulation and themes from any complaints that maybe received. These are all market signals; not just of stakeholder tensions and dis-satisfactions, but also of where potential disruptions will come from. They are signal then of change.

So, let’s get over the hype of disruption and think deeper. Disruption is just a theory about why organisations and leadership fails. It’s not more than that. It doesn’t explain change. It’s not a law of nature. It’s an artefact of history, an idea, forged in time; it’s the manufacture of a moment of upsetting and edgy uncertainty. Leaders to do their job properly, should stop being transfixed by change, and being blind to continuity- they should read the market signals.

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Strategic Radar

What is your strategic mindset?


The first question any strategic review should ask; what is the organisation’s strategic mindset?

At its basic level a mindset is a mental attitude that determines how an individual will interpret and respond to situations. Over the last ten years’ the concept of mindset has become a key focus in many areas especially education, sport, psychology and human resources. This is largely due to the work of Dr Carol Dweck and her famous book Mindset where it suggests that individuals can have one of two mindsets.  A fixed mindset is where intelligence is a fixed trait and an individual’s qualities are carved in stone. A growth mindset is where intelligence is a quality than can be changed and developed.

Dweck’s concept has been also extended to organisational behaviour and organisation culture. An organisation with a fixed mindset can be characterised by one that has few individual star employees; it has lower levels of engagement and commitment; a real obsession about not failing and taking un-necessary risks; very few (if any) innovation projects; and a culture of secrets and damaging politics.

An organisation with a growth mindset is considerably more innovative, collaborative with a real commitment to learning and growing. Innovation flourishes because risks are prepared to be taken and there is an environment where challenge is encouraged. As Dweck comments

“When an entire company embraces a growth mindset their employees report feeling far more empowered and committed. They also receive far greater organisational support for collaboration and innovation”

So given that a fixed or growth mindset can be applied to an individual and an organisation, it makes sense, that it must encompass the strategy. You could speculate then that at its basic level a strategic mindset is an organisation’s mental attitude on how it interprets and responds to different competitors, different environmental challenges and different internal changes.

I believe mindset is everything and understanding the strategic mindset is critical. Consider as an example if an organisation has stalled. Revenues are not growing, expenses are creeping up, and this is due to a strong competitor. In response to this the strategic mindset could be of a fixed nature: “let’s stop innovation, it has risk and is expensive”; “let us do what we do, really well”; “lets match competitors”. This approach will be a very short term in its focus, and perhaps create a cycle that is hard to get out of as it is driven by flawed beliefs and assumptions.

A strategic mindset which is of a growth nature could be “lets increase innovation, there is opportunity”; “let’s do activities that competitors haven’t thought of”; or “lets lead the market”. There will be a focus on leadership, both internally and externally.

As you can see each strategic mindset could lead to different outcomes in both the short term, and the long term, and may even require a different type of leader.

By the way, It is very easy to assume that a growth mindset is always the right answer, especially as it has a focus on creativity, engagement and innovation (great buzz words after all). But this is not actually the case, sometimes a strategically fixed mind set could be the right answer. It all depends on capability, an organisation’s life stage and what is important to shareholders.

So when you are starting a strategic review, the strategic mindset needs to be discussed. It should be the very first question you should ask; is our strategy mindset- fixed or growth? And, also the very last question.

(And by the way, make sure your Board and shareholders have the same mindset!)

Further learning

Dweck, Carol (2006), Mindset the new psychology of success, United States (order from Amazon it is a great book)



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Strategic Radar

Why Strategy Should Always Be On

A photo by Tony Webster.

Too often, an organisation’s strategy is defined at a point in time. All the analysis, all the workshops, all the PowerPoint decks are written as if time has frozen still. Then once complete, over the next three years an organisation will try to deliver to the strategy, perhaps hoping that once again time is frozen in this perfect world. By inference, this means competitors are frozen, the government is frozen, the digital world will not develop further, and customers will never change or age.

We have known as far back as 1928 with the failures of Stalin’s ‘five year plan’ that you cannot create plans frozen in time. Stalin’s strategy really failed to understand variables such as politics, the weather and technology can all have a bearing on the success of its strategy.
Sound ridiculous when you think about it. So why then do organisations have strategies, which are not that flexible? Why are strategies gathering dust instead of connecting to the changing world? Why do organisations do this when the speed of disruption is so fast, and the consequences are so severe?

Research (Olson et al) has suggested that 87% of Fortune 500 companies have suffered one or more growth and revenue stalls (stall points) and consequently 74% of these companies lose their market capitalisation. Deeper analysis sheds light on the most common causes of growth stalls, which turn out to be preventable for the most part. There is a common assumption that when the fortunes of organisations plunge, it must be owing to big, external forces—economic meltdowns, acts of God, or government rulings—for which management cannot be held accountable. In fact, most stalls occur for reasons that are both knowable and addressable at the time, if only management had looked.

So how do you then avoid the trap of having a dusty strategy that is disconnected from its current operating environment? How could the strategy be kept up to date without the need for giant strategy reviews every year.

One way is to understand and look out for the warning signs such as:

  • Do the organisation’s core assumptions on how a market place works, match the actual market? Often a market is working quite differently than the assumed strategy thinks it does, and this is most evident with advantages bought about by digital. Customers can search for a price point, get more information than any before and this gives them real power.
  • Has management reviewed what the definition of their market actually is? Do they understand it? Has it changed? Can an organisation translate customer insight into new product and services? One thing that Apple teaches with the launch of their iPod and iTunes is that if you understand the entire customer journey and the eco-system you are able to shape the market.
  • Does the leadership still believe that their organisation is a premium / quality brand, and are customers actually willing to pay for it? Often companies with greater insight to what is important for consumers will define what the actual proposition is for the customer.

Kaplan and Norton suggest another method through their famous Balanced Scorecard work that the use of feedback loop is required. They suggested that an organisation and its leaders should discuss its underlying strategic assumptions at least 20% of the time. For example;

  • Constant hypothesis testing with links to strategic KPIs; or
  • Using simulations to assess the impacts of disruption and also used as a tool to predict competitor behaviour; or
  • Consideration of innovative and emergent technologies.

Another tool is to create and use a strategic radar, which is a tool that measures both the impact and speed of change. As Andy Grove of Intel has commented;

“Think of the change in your environment as a blip on the radar screen. You cannot tell what the blip represents at first but you keep watching radar scan after radar scan, looking to see if the object is approaching, what its speed is and what shape it takes as it moves closer. Even if it lingers on your periphery, you still keep an eye on it because its speed and course may change.”

A strategic radar is probably the easiest tool to use as it can be simplified and used on a regular basis as suggested by Olsen et al. It lends itself to real focused discussion and deep dives, whilst maintaining the flexibility that is needed with an environment, which is constantly changing. By linking the strategic radar to key KPI’s, a real durable strategy could emerge.
However an organisation does it, they need to ensure that strategy is always on. You do not want to be the person holding a beautiful strategy document completed three years ago, saying that was not supposed to happen, as your organisation stalls. Or worse.


Learn more
Kaplan and Norton (2004), Strategic Maps
Olson, Van Berer, Verry (2008), Harvard Business Review March, “When Growth Stalls”

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Strategic Radar

Strategic Radar

The strategic radar is a toolset that helps to shape business strategy in response to a changing competitive and economic landscape.


It helps to keep your strategic aim true to long term goals while adjusting to the constant pressures of change and emerging market forces.

Through a combination of perspectives a strategic radar helps to create clarity and confidence in the organisation, and develop a strategic plan which is well-balanced and complete.  Taking on board aspects of modern theory such as Network Thinking and Lean methodology take business strategy into new territory – enabling larger businesses to keep pace and adapt in the era of the spry and rapidly evolving start-up.

Take a look at the video below which takes you through the elementary aspects of building a strategic radar for your business.  Please feel free to leave questions in the comments below – or if you’d like to engage Diffusion to help you create a radar for your own business, please get in touch via the contact form on the About Us page.

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