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Execution

The VUCA Strategic Planning Framework

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“In preparing for battle I have always found that plans are useless, but planning is indispensable.” – General Dwight D. Eisenhower

The last six months have proven the traditional approach to strategic planning is no longer effective.

We do not live in a static or predictable world. If a VUCA environment – with all its disruption and unpredictability – is the new normal, then organizations need to adopt a strategic planning process that is more robust and agile.

Organizations today need strategic plans designed to handle the accelerating pace of change, extreme unpredictability, and widespread VUCA disruptions across the global economy.

The VUCA Strategic Planning framework helps leaders and their teams develop comprehensive, yet flexible, plans that help determine the future of their organization.

The Need for Flexibility and Agility

To succeed in this new era, organizations need to be flexible and agile. Leaders and their teams must get out of the building and maintain the discipline of a bias to action!

As a result, organizations must also be flexible in their strategic planning and agile in their execution.

Yes, it still requires that we define why the organization exists and what we do. However, it also demands that we constantly question every assumption about the business, the market, and the environment, and make quick decisions based on what we find.

Leaders and their teams must constantly ask the question: “What if?…”

Instead of driving the bus by looking through the rear-view mirror, this agile approach to strategic planning demands that we steer by looking through the front windshield. We need to focus – gazing not just at the road ahead, but also far into the horizon, to an unknown future – so that we can better anticipate what might be coming up and react appropriately to any disruptive forces or changes that might hit us.

This flexible approach to strategy is a key ingredient to successful execution.

VUCA Strategic Planning Framework – Overview

The graphic below provides a visual overview of the VUCA Strategic Planning Framework.

There are four core phases in the process:

  • Planning Foundation – Where we define the Core Ideology (Mission, Values, Purpose) of the organization, the Envisioned Future (Vision, Long-term goals), and the Strategic Gap that separates them.
  • Strategy Development – Where we formulate the go-forward Strategy, and make a go/no-go Strategy Decision.
  • Plan Creation – Where we develop the VUCA Plan, and do Scenario Planning.
  • Management Cycle – Where we add in the Strategy Portfolio, and leverage the Management Cycle for effective execution.

The foundation to every effective VUCA Plan is robust Situational Awareness. This continuous process happens throughout the four phases of strategic plan development and execution, and represented by the parallel work stream running the length of the process.

There are also four phases to situational awareness, matching each of the strategic planning phases:

  • Perceiving – This phase is all about gaining clarity on the “as is” status of the organization through internal analysis and an external analysis of the marketplace or economy.
  • Understanding –By taking information from the first phase and interpreting it through a new or existing mental model, or strategic framework, we can be begin to make sense of the connections between the elements and stress-test possible approaches to reach “future state”.
  • Predicting – After reviewing the information and insights from the first two phases, we can leverage this knowledge to project forward and begin to predict potential future impacts or outcomes. This is an important element for Scenario Planning.
  • Reacting – During the execution phase leaders and their teams in the field must observe, interpret, and react to all the inputs they receive from the market. This is where we must react to VUCA forces and make decisions about whether to proceed, pivot, or stop!

VUCA Strategic Planning Framework – Details

In the VUCA Strategic Planning framework, Core Ideology and Envisioned Future, combined with robust Situational Awareness detailing the current state of the organization and its operating environment, create the springboard for strategy development:

  • Core Ideology – Defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for today. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA strategic plan.
  • Envisioned Future – Defining a clear vision of what the organization aspires to become or achieve and its long-term goals. These elements explain the desired “future state” and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – A thorough analysis of the environment in which the organization operates is vital. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment (internal and external perspective) to understand how information, external events, and one’s own actions might affect both immediate and future outcomes.

Once this planning foundation is in place, leaders should consider strategic options that will enable the organization to bridge the “gap” between the current state and the desired future state while factoring in the operating environment as revealed by the situational analysis. Strategy is the mechanism to do this:

  • Strategy – Defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals. Strategy plays a vital role in VUCA strategic planning.
  • Strategy Decision – Once formulated, leaders must then decide if the strategy is the best one to help the organization achieve its long-term goals. If the decision is to move ahead with executing a chosen strategy then it is time to commit, and proceed with creating a complete Strategic Plan around that strategy.

The strategic planning process culminates in the creation of a VUCA Strategic Plan:

  • VUCA Strategic Plan – A clear time and resource based plan, that details the strategy and actions by which the organization intends to reach its Envisioned Future. Clarity on objectives, owners, and timelines will help ensure successful execution.

In addition to their primary VUCA Strategic Plan, leadership teams should also take several additional steps to help mitigate the potential risk of disruption or failure:

  • Scenario Planning – Identify the potential VUCA impacts that could derail your primary strategy or impede your ability to achieve the defined objectives, and action plan your response to them. Because almost no plan goes as expected, by answering “what if” across a comprehensive set of possible future scenarios your team will be better prepared to quickly react and make decisions when/if a disruption happens.
  • Strategy Portfolio– Viable alternative, complementary, or even competing strategies that your organization will resource and your team will execute in addition to the primary strategy. Your Strategy Portfolio will develop from the strategy formulation phase, additional insights gained from situational awareness, and scenario planning that went into creating your VUCA Plan. This element mitigates risk and maximizes future opportunity for the organization.

In the final stage of the VUCA strategic planning process the focus shifts from planning to execution. It is now time for leaders to delegate the responsibility for taking action and manage the outcomes.

  • Management Cycle – A circular workflow, where individuals or teams do the work of executing the strategic plan, review progress, and make course-correction decisions. The leaders of the organization manage this on a regular cadence until the objectives are either achieved, changed, or deleted.

To Your Continued Success

So, there you have it – the VUCA Strategic Planning framework – a comprehensive and integrated approach to strategic planning in times of change and disruption. It was  expressly designed to help leaders and their teams deal with a VUCA environment, effectively plan the future of their organization, and take action.

This agile and flexible approach to strategic planning, and execution, is the key to success for any organization.

I am looking forward to sharing additional tools, techniques, and best practices for each stage of the process. I would also welcome any feedback or suggestions on the framework as you work with it. If you would like to talk about how best to create a VUCA Plan for your organization, please feel free to reach out.

To your continued success.

-Onward

Getting From Vision to Results

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“A vision and strategy aren’t enough. The long-term key to success is execution. Each day. Every day.” – Richard M Kovacevich

After developing a VUCA Strategic Plan for their organization, many leaders and their teams think the hard work is over.

Unfortunately, this is not the case. This is when the real work begins!

It is now time to transition the focus from planning to execution. This is when the work of accomplishing the objectives defined in the plan happens. This is where winning organizations demonstrate a bias to action and MFGSD, and begin to execute their plans.

The Management Cycle is the final, and arguably most important, element in the VUCA Strategic Planning framework. For leaders, this is the vital process whereby they effectively manage the execution of the VUCA Strategic Plan for their organization. For individuals and teams, this is when they execute strategy and tactics all the way through to the achievement of defined objectives.

The VUCA Strategic Planning Management Cycle

A comprehensive VUCA Strategic Plan will have clearly articulated details on three important elements:

  1. Long-term goals for the organization.
  2. The strategy for reaching them.
  3. Tactical objectives to achieve along the way.

Furthermore, these objectives (hopefully designed using the SMARTER framework!) will specify assigned resources (people and financial), timelines, and metrics.

The tactical objectives are the work outcomes which are delegated to individuals and teams, and help to define the success or failure of their roles in the organization.

Leaders of the organizations (who are the fiduciary “owners” of the strategic plan) must now do what they do best: lead their teams and manage the plan to successful completion! This element, called the Management Cycle in the VUCA Strategic Planning framework, is where the work of the organization happens.

The Management Cycle is not a static step in the planning process, but actually an on-going management activity. Rather than a linear path from beginning to end, it is better to think of it as a circular loop structured very much like the traditional PDCA total quality productivity loop (plan-do-check-act), as follows:

  • Start/Continue – Think of this as a stage-gate at the top of the loop. It is where the work effort towards achieving the objective begins. It is also where leaders make the decision to continue the effort during a regular progress update…
  • Action/Execution – This is the stage where the actual work or activity happens. At some pre-defined, or ad hoc, point in time the activity is reviewed…
  • Evaluation – In this stage, individuals or teams review their progress with leadership. Specific metrics (defined in the VUCA Plan) are evaluated, which leads to…
  • React/Pivot/Stop – Following evaluation, leaders must guide the individual or team in making any necessary course corrections. This can include reacting to things like market feedback, experiment results, sales success, etc. The decision could be to continue for another execution cycle, pivoting to a different approach, or stopping the activity.

This iterative pattern of activity continues until the objective is either successfully achieved, or the objective is modified, or the objective is removed from the plan.

The cadence of the Management Cycle is heavily dependent on the nature of the actual activity. Singular events, or short-duration tactical activities, might not allow time for anything other than a completion/failure evaluation at the end. Whereas, longer-term or more complex activities might have a series of regularly scheduled reviews on some calendar basis (daily, weekly, monthly, quarterly, etc.)

Many leading organizations (including Intel, Google, and LinkedIn) have enjoyed great success using a methodology called Objectives and Key Results (sometimes referred to as OKR) to manage the execution of their strategic plans. Future blog articles will go into greater depth on the OKR framework for managing the achievement of objectives.

Where Does the Management Cycle Fit into the VUCA Strategic Planning Framework?

In the VUCA Strategic Planning framework, Core Ideology and Envisioned Future, combined with robust Situational Awareness detailing the current state of the organization and its operating environment, create the springboard for strategy development:

  • Core Ideology – Defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for today. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA plan.
  • Envisioned Future – Defining a clear vision of what the organization aspires to become or achieve and its long-term goals. These elements explain the desired “future state” and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – A thorough analysis of the environment in which the organization operates. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment (internal and external perspective) to better understand how information, events, and one’s own actions might affect both immediate and future outcomes.

With this planning foundation in place, leaders should consider strategic options that will enable the organization to bridge the gap between the current state and the desired future state while factoring in the operating environment as revealed by the situational analysis. Strategy is the mechanism to do this:

  • Strategy – Defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals. Strategy plays a vital role in VUCA strategic planning. It bridges the “gap” between where the organization is today and where it wants to be in the future.
  • Strategy Decision – Once formulated, leaders must then decide if the strategy is the best one to help the organization achieve its long-term goals. If the decision is to move ahead with executing a chosen strategy then it is time to commit, and proceed with creating a complete Strategic Plan around that strategy designed to ensure successful execution.

The strategic planning process culminates in the creation of a VUCA Strategic Plan:

  • VUCA Strategic Plan – A clear time and resource based plan, that details the strategy and actions by which the organization intends to reach its Envisioned Future.

In addition to their primary VUCA Strategic Plan, leadership teams should also take several additional steps to help mitigate the potential risk of disruption or failure:

  • Scenario Planning – Identify the potential VUCA impacts that could derail your primary strategy or impede your ability to achieve the defined objectives, and action plan your response to them. Because almost no plan goes as expected, by answering “what if” across a comprehensive set of possible future scenarios your team will be better prepared to quickly react and make decisions when a disruption happens.
  • Strategy Portfolio – A list of viable alternative, complementary, or even competing strategies that your organization will resource and your team will execute in addition to the primary strategy. Your Strategy Portfolio will develop from the strategy formulation phase, additional insights gained from situational awareness, and scenario planning that went into creating your VUCA Plan. This element mitigates risk and maximizes future opportunity for the organization.

In the final stage of the VUCA strategic planning process the focus shifts from planning to execution. It is now time for leaders to delegate the responsibility for taking action and manage the outcomes.

  • Management Cycle – A circular workflow, where individuals or teams do the work of executing the strategic plan, review progress, and make course-correction decisions. The leaders of the organization manage this on a regular cadence until the objectives are either achieved, changed, or deleted.

Conclusion – Time to Execute

“Without strategy, execution is aimless. Without execution, strategy is useless.” – Morris Chang

In the world of business, having great ideas is much like having a strategic plan – many leaders and organizations have them, yet very few successfully get them done.

This failure to execute is what the Management Cycle element of the VUCA Strategic Planning framework prevents. By clearly defining expectations and ownership, and actively managing the work, leaders can make sure good outcomes happen.

Moving the organization from vision to results…

-Onward

A Bias to Action (MFGSD!)

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“Plans are only good intentions unless they immediately degenerate into hard work” —Peter Drucker

For much of my career I have focused on helping organizations grow. This focus on growth has allowed me to sit at the interesting intersection of strategy, innovation, marketing, sales, and customer success in a number of leadership roles across a few industries.

With the benefit of this experience and perspective, I can clearly see that there are two consistent ingredients required for success: Strategy and execution.

I have written extensively about how important it is for organizations to develop agile and flexible strategic plans designed to achieve long-term goals in a hostile VUCA business environment.

However, a plan by itself is useless. There is something even more important to success than having a plan. What could that ingredient be?

A bias to action.

Most Plans Just Gather Dust

Despite the enormous investment of time and resources that leaders of organizations put into developing their strategic plans for the future, most fail. Why?

There are many common reasons why organizations don’t achieve the results they define in their strategic plans. These can include a bad strategy, flawed situational awareness, unrealistic goals, unforeseen (VUCA!) scenarios, weak teams, and even poor leadership. However, by far the biggest culprit is bad or non-existent execution.

Strategy without execution is a complete waste of time.

Business leaders know that nothing good happens in business until someone does something. The alternative to this proactive approach is simply to wait for the universe (or your competitors) to take action. In my experience, this reactive approach never ends up well. Unfortunately, too many people wait for things to happen instead of proactively making them happen. With this approach, you don’t make forward progress. You don’t learn anything.

Mary Kay Ash, they dynamic founder of Mary Kay Cosmetics said it best: “There are four kinds of people in this world: Those who make things happen, those who watch things happen, those who wonder what happened, and those who don’t know that anything happened!”

A bias to action is what makes things happen.

Focus on Execution

A common ingredient to every successful startup or highly functioning executive team that I’ve been involved with in my career has been a simple operating philosophy that I like to call “Move Fast and Get S#!T Done.” Over the years I’ve shortened it and made it a little more politically correct by referring to it by the acronym: “MFGSD”.

It boils down to a laser-like focus on execution.

Effective leaders make sure their teams know the vision and strategy of the strategic plan, ensure they have the support and resources they need to execute, and then get out of the way.

MFGSD!

How do you create this bias for action? It starts with effective leadership and developing your team. The goal is to move your people up what I call the “action ladder”:

  • Level 0 – Ignorant of opportunity or threat, therefore no action
  • Level 1 – Can identify there is an opportunity or threat
  • Level 2 – Proposes a viable solution for opportunity or threat
  • Level 3 – Can develop a plan of action to address opportunity or threat
  • Level 4 – Can develop a plan of action for opportunity or threat, and it is feasible
  • Level 5 – Solving the opportunity or threat by executing the plan of action

If you have ever had a “star” employee on your team, you will recognize how valuable (and rare!) Level 5 players are. They make sure important things get done.

Most execution problems are easy to fix. Start with your people. You have two basic options: Get the people in your organization motivated to perform at a higher level than they are today, or get higher-level people into your organization.

Go Forth, MFGSD!

The late Herb Kelleher, co-founder and former CEO of Southwest Airlines, said something that in my opinion perfectly sums up the concept of being strategic, having a bias to action and the MFGSD ethos: “We have a strategic plan. It’s called doing things.”

The important lesson for leaders – there is a very long list of things in the world you cannot control. Execution is not one of them. You can control your actions.

Pick a direction. Create a plan. Execute. React to what you learn. Keep going.

MFGSD!

That’s it. A very simple concept, and extremely powerful if you (and your team) practice it.

-Onward

Do You Want to Be a Frogman?

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“Everybody wants to be a frogman on a sunny day.” – US Navy SEALs

The US Navy Sea, Air, and Land Forces (SEALs) are arguably the most elite, and revered, fighting force in the world. This saying originated within the SEAL training program, where they take volunteer candidates and run them through an intense multi-phase training program called Basic Underwater Demolition/SEAL training, or BUD/S for short. Only 20-25% of candidates make it through the entire process to become Navy SEALs, or “frogmen”.

Note: I have also heard the alternative phrase, “everybody wants to be a SEAL on a Friday” attributed to the same training program. I’m not sure which one is used today, but in my mind they have the same meaning: becoming a SEAL is much harder, and less glorious, than it looks to an outsider. And no matter how challenging, they are committed to achieving success.

I believe same observation applies to being the leader of an organization.

Leadership is Hard Work

By all accounts, US Navy SEAL training is brutal. Moreover, once they reach the end, newly minted SEAL operators discover the hard work has only begun. Their lives are a constant swirl of training mixed in with life-threatening and uncomfortable field operations in crisis hot spots around the world.

Despite being physically intense and exhausting, the real purpose of SEAL training is not physical fitness, it is to test the willpower and mental stability of the participants. You see, becoming a special forces operator is a high stakes and high stress profession, with danger lurking around every corner. They cannot risk having SEALs who break down at the first sign of trouble or hardship. The SEALs will not tolerate quitters; they want those who are willing to suffer while focused exclusively on achieving their goal with their team.

This is the Navy SEAL mission: “When there’s nowhere else to turn, Navy SEALs achieve the impossible through critical thinking, sheer willpower and absolute dedication to their training, their missions and their fellow Special Operations team members.”

In fact, the Navy SEALs have another saying that sums all of this up perfectly – “the only easy day was yesterday.”

Perseverance in the Face of VUCA

The trainers want to make sure that prospective SEALs are in it for the right reasons and weed out those who are in it just for the prestige or glory. The purpose of the training is to grind it out, to endure, to stay focused on the mission of finishing the training. They are looking for those who can absorb all the awful things thrown at them and still maintain a positive and focused mindset.

This is not too different from leading an organization in times of great uncertainty, like the VUCA (volatile, uncertain, complex, and ambiguous) environment we find ourselves in today.

Leadership is not about basking in the perks or glory of the role, or the title, or your team’s accomplishments. Leadership, is about evaluating risk, making decisions, aligning team resources, and inspiring action to work towards a common goal. It is hard, tiring, sometimes ungratifying work.

Having the ability to coach and lead others to victory, through extreme levels of chaos, is probably the single most valuable skill in this new VUCA world we are all facing. 

Now, more than ever, people are looking for strong leaders to help guide them through this crisis.

Leadership is Voluntary

Every SEAL trainee volunteers to be there, and every single one of them can volunteer to leave at any time during the training – you may have read about the mythical “bell” in the center of their training complex where a defeated trainee can “ring out” signaling their intent to quit the program immediately.

As the leader of an organization you volunteered to do the job, and every day you volunteer to keep doing it. If you get tired of it, you can always revert to being a follower.

If you choose leadership, it is a commitment you make to yourself, your team, and your organization to affect change and achieve the long-term goals of the organization. You must constantly motivate and inspire your team in their pursuit of success.

Becoming a leader is a journey, not a destination. It is by slogging through the hard times that you come to appreciate the good times, and become a better leader in the process.

Lead, Follow, or Get Out of the Way!

When the seas are smooth, the sun is shining, and there is a steady breeze it is relatively easy to steer the ship. However, what happens when all hell breaks loose and you cannot see a clear path to victory?

This is when some leaders shut down and become paralyzed by fear, uncertainty, and doubt…they make rash, shortsighted, or illogical decisions, or even worse, no decision at all.

This is also when true leaders emerge and find ways to win, no matter how difficult the circumstances, or uncertain the path forward. 

Everyone wants to be a hero until you have to step up and do heroic things! True leaders have the critical mindset of being able to move beyond fear, to confront whatever VUCA situation they are handed, and make sure their organization and team not only survives but thrives. 

It is not easy, but this is what the best leaders do.

Everybody wants to be a frogman on a sunny day, but real leaders also step up when it is dark, wet, scary, and the path is not clear.

-Onward

Great Strategy Requires Situational Awareness

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“The difference between being a victim and a survivor is often a low level of situational awareness.” – Barry Eisler

With the amount of change and disruption in the world and in our current business climate, it has never been more important for leaders to be aware of their surroundings, and thoroughly understand the internal and external forces that can have an impact on their organization.

Effective strategic planning requires an honest appraisal of your starting point and operating environment. This is called “situational awareness,” and it is vital to have it before creating a VUCA strategic plan. A thorough and honest assessment of your current reality will not only help inform your strategy, but it will also help to identify potential pitfalls and alternative scenarios to consider and prepare for.

The Foundation for VUCA Strategic Planning

Before geting into the details of situational awareness, here’s a quick review of the two foundational elements that should be in place for effective VUCA strategic planning to take place:

  • Core Ideology – defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They create a “true North” guidepost for making strategic decisions and are the foundation for any VUCA plan. With this foundational framework you will have greater clarity when making critical business decisions that impact the future of your organization.
  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. Together, these elements explain the desired future state of the organization, and the long-term goals you and your team are working towards achieving in order to get there.

With this solid planning foundation, leaders are ready to begin thinking about their strategic options. This requires the identification and understanding of their current environment, and the ability to project that into the future.

First, Put It All on the Table

To craft an effective VUCA plan, we have to know exactly where the starting position is. You need to know your current reality. Because if you don’t know where you are, then how will you know when you get there?!

Much like sailing a ship, in order to plot a course forward we have to know where we are, where we are going, but also what the environment around us looks like.

Warning: This stage of the strategic planning process is difficult for many organizations. Not because it is inherently “hard” to do, but rather because it requires honesty and deep inquiry, something that many leaders (and their leadership teams) are just not willing or able to do.

Why do they resist? Oftentimes it is because the truth hurts. Or, because challenging sacrosanct beliefs is difficult, and may bring into question prior executive decisions. Or, because they just may not know how to go about gaining market clarity.

Please pardon the expression, but for this reason I often refer to this stage of the strategic planning process as finding and putting all the crap on the table.

It is not easy. Nor is it always fun. However, it is very necessary…and by giving it “heat and light” you can drive productive outcomes.

Gaining situational awareness helps to inform strategy, clarify your direction, and leads naturally to developing a plan.

What is Situational Awareness?

The phrase “situational awareness” comes from military aviation and is defined as “the perception of environmental elements and events with respect to time and space, the comprehension of their meaning, and the projection of their future status.” The ability to gain situational awareness quickly is essential for combat pilots if they are to survive an encounter with enemy aircraft.

Here is a strategic planning definition: Situational awareness involves knowing where you are and being aware of what is happening in your environment, in order to better understand how information, events, and one’s own actions will impact both immediate and future outcomes.

Put another way, situational awareness is the ability to identify, process, and comprehend the critical elements of information about what is occurring or is about to occur. Every leader has the responsibility to know what is happening within their organization and the world it operates in.

While gaining situational awareness sounds fairly easy in a stable and simple situation, it becomes significantly more challenging in a rapidly changing and disruptive environment because it is not a static snapshot, but rather a real-time capture of a dynamic environment. This makes situational awareness especially relevant for situations or environments characterized by a high level of volatility, uncertainty, complexity and ambiguity (VUCA).

That sure sounds like today’s business environment!

The Three Levels of Situational Awareness

In strategic planning, there are three levels of situational awareness to consider. They build on one another sequentially, and there are important elements of VUCA planning that take place in each so we need to consider them all:

  • Level 1 – Perceiving
  • Level 2 – Understanding
  • Level 3 – Predicting

Following is a quick overview of each:

Level 1 – Perceiving: Perceptions of data and the elements in the environment

The first step in gaining situational awareness is to be able to identify the state, characteristics and dynamics of all the relevant elements in your current operating environment. This is sometimes called the “as is” view.

There are two important implications. First, the individual or organization must have access to the relevant information. Second, once this access is in place, the individual or organization has to recognize it. Consequently, one of the key requirements for Level 1 situational awareness is the communication and proper visualization of data.

Gaining situational awareness for organizations often involves internal analysis of the company and an external analysis of the marketplace or economy. There are many proven analytical tools and techniques to accomplish this, such as SWOTER and PESTLE analyses, which will be covered in future articles.

However, it is not enough to be able to perceive all the factors in certain situations. One needs to learn to make sense of the connections between these elements, hence the second level of situation awareness: understanding.

Level 2 – Understanding: Comprehension of the meaning and significance of the current situation

Understanding goes beyond simple awareness of the elements that are presented. The second level of situational awareness refers to the requirement that we must properly comprehend the relevant information. Comprehension of the current situation is based on thorough analyses of all Level 1 elements. As a decision maker, one not only needs to draw a holistic picture of the situation with sufficient knowledge first level elements — but also have the ability to understand the significance of those elements in relation to each other, and to the achievement of the goal.

Depending on the specific situation, Level 2 understanding requires the right knowledge to deal with the acquired information. This is where mental models and strategic frameworks can play an important role. By taking the Level 1 information and interpreting it through a new or existing mental model, or strategic framework, we can be begin to stress-test possible approaches based on what we know.

This works because when we create a new model or update an existing one based on how we’ve interpreted the information, if something important is missing, the information is incorrect, or the information doesn’t make sense, the model fails to work. It either means we don’t have all the information we need, or the approach is not the right one.

For business planning there are many well-known strategic frameworks that can be considered depending on the situation, including internal/external considerations, vision, long-term goals, VUCA environmental factors, etc.

After this analysis, and initial consideration/formulation of strategic frameworks, we will then come to our next level of situation awareness: the ability to predict the future status based on our understanding of the current situation.

Level 3 – Predicting: Projection of future status and events

You achieve the third level of situational awareness by applying the information and insights perceived and comprehended in the first two levels. This knowledge is then used to project forward and begin to predict potential future actions or outcomes of the elements in the environment.

This level is especially important in dynamic VUCA environments, because the ultimate goal of building situational awareness is to utilize the information collected to predict the most likely potential outcomes as a result of these elements, and to then use this information for decision making.

For strategic planning we do can accomplish this through the development and consideration of scenarios. This “what if” level of planning is crucial for dynamic VUCA environments because it allows leaders and their teams to consider a range of possibilities and then think through how they will react ahead of time. This has obvious decision making and execution benefits. Much more on this in future articles.

It becomes even more important in complex systems or environments, which are characterized by many interdependencies, because it is much more difficult to predict how changes in one variable might influence those around it and the whole. As a result, we must constantly re-evaluate and adjust our mental models or strategic frameworks as we gain new information.

Situational Awareness Connects the Person (and Team) to the Environment

A key foundational concept behind situational awareness is the distinction between an individual (or a team, or an organization) and the environment they operate in. The environment refers to everything that is going on around the individual, team, or organization. The reason we focus on important elements of the environment is to emphasize that situational awareness is ultimately about enabling an individual, team, or organization to get something done. This can be a task, a project, an initiative, or anything else that requires interaction with, and reaction to, relevant elements of the environment.

Ultimately, no strategic plan ever survives contact with the market without some change.

But the true value is not in having an ironclad plan that doesn’t change, but rather in having thought through potential challenges to achieving the long-term goals of the organization, so that individuals, teams, and the organization can react quickly and decisively. This leads to the final stage of strategic planning, where a decision is made and the plan is broken down and delegated to those responsible for achieving it.

In the end, strategic planning is completely useless unless some action is taken by an individual or team.

Conclusion

There are three levels of situational awareness:

  • Level 1 – Perception of data and the elements of the current environment, ideally taking an internal and external perspective on the starting point.
  • Level 2 – Comprehension of the meaning and significance of the current situation, including some consideration/formulation of a strategy framework or mental model.
  • Level 3 – Projection of future status and events, including some prediction of potential scenarios and consideration of their likelihood and potential response.

Situational awareness is the starting point for strategic planning – Simply, it is knowing where you are, what is going on around you, and how you might react to any impacts that might prevent you from achieving your objective.

For business success you need internal perspective on your organization’s strengths and weaknesses, and external perspective on your market position and strength, how customers view you, competitive landscape, etc. It is far too common to see leadership teams developing comprehensive strategic plans without looking at what is happening outside of their organization. Furthermore, many organizations never consider potential threats or destabilizing forces, or their potential response to them.

Investing in gaining situational awareness is the solution.

Hopefully you can see that these situational awareness steps — perceiving the elements in the environment to know your starting point, understanding how the environment might impact your goal, and being able to use this information to predict future events and possible strategic responses — can help you, your team, and your organization achieve success.

Stay tuned; in an upcoming article I will discuss the value of setting “SMARTER objectives” when creating a VUCA strategic plan. This is a key ingredient to getting results.

-Onward