Be Aware of Strategy Drift and Gaps Post Covid – by Graham Kenny

Over the last three years, management practices have shifted from proactive to reactive. For example, fine-dining restaurants are now producing takeaway meals, and medical practices are providing “telehealth” to treat patients online. These innovations began in response to Covid, they filled a need, and they’ve stuck.

But not all Covid strategies have turned out so well. Post-pandemic, two strategy problems have emerged which require immediate attention. The first of these is strategy drift – the unintended widening of the scope of a business. The second is strategy gaps – the difference between what customers and other key stakeholders have come to expect from a business in the post-Covid world and what a business is providing.

If left unaddressed, these could result in serious business underperformance. Because they’ve become normalized, many managers are simply unaware of their existence. Here, I’ll explain how to identify these problems in your business and what to do about them.

Check for Drift

It’s been easy in the last few years to find yourself chasing business. Many retail operations, for example, only survived due to generous government support or by scrambling for whatever revenue they could find.

Julia heads an accounting firm. During the pandemic, her business was busy not only in dealing with normal accounting and advisory work but also in handling government grant applications for clients as well as their bookkeeping and record-keeping needs. This was all aimed at keeping her clients afloat and her business active.

Coming out of Covid, Julia and her colleagues are alarmed at strategy drift. They’ve decided that the business is now heading in the wrong direction.

The future lies in refocusing the business on the high-margin, high-value-add accounting work, thus eschewing the bookkeeping and record-keeping activities. “It’s just not right for us going forward,” she said. “While this work got us and our clients through Covid our labor costs are just too high and there’s no real profit in it. It’s not the direction we want our business to head.”

Watch for Gaps

The pandemic has caused gaps to develop between stakeholders’ expectations and a business’s delivery on them. One example is that customers now expect more services to be delivered online. Another is a major realignment between businesses and their employees.

Krystal is HR Manager in a large advertising agency. She noticed that a gap had developed between the executive team’s expectation that staff would return to in-office work, and employees’ expectations that working from anywhere would continue. She undertook a series of staff interviews to get to the bottom of the situation.

The results weren’t straightforward. She found that the workforce fell into roughly two camps. She explains, “Some employees who were established in their careers, pre-pandemic, have strong internal networks. They’ve enjoyed the flexible work arrangements as well as the lack of a daily commute. They want to retain the current arrangement.”

She describes a second group as those “who are early in their careers and new to the organization. They miss the ability to learn from others, to observe people at work, to build networks and to socialize.”

Krystal knows that closing these gaps to accommodate the needs of the business and the needs of staff will require some finesse. Lynda Gratton from the London Business School has described this as an area for “learning and experimentation.”

Learning and experimentation are terms that can be readily applied to the adjustments required to meet customers’ post-Covid expectations too.  

Bruce is Branch Manager in a large bank with a national footprint. He explains that during Covid banking transactions moved online as much as possible to avoid person-to-person contact. Consequently, the bank was able to reduce staffing levels in its branches.

But as Bruce explained “now we have a gap. As we’ve come out of Covid, customers are again seeking in-person services. The trouble is,” he said, “we’re no longer staffed to provide it.”

Time for a Strategic Review

Now is a suitable time to undertake a strategic review. Try a post-Covid reset with these two fundamental questions:

Have we allowed ourselves to drift losing focus on who our target customer, target employee and other target stakeholders are?

Focus requires the subtle alignment of your business’s strengths with a customer group’s needs. Of course, there’s no point focusing on a market segment that’s too small to sustain your business. On the other hand, you’ll unravel if you try to focus your business on a group that’s too diverse. You’ll simply fail to satisfy any of its members.

Has a gap developed between the post-Covid expectations of our key stakeholders and our performance?

Take time to talk to your stakeholders, including customers and suppliers, about their post-Covid needs. Don’t rely on superficial surveys. Instead, follow Krystal’s lead by taking a deep dive into your stakeholders’ requirements. Close any gaps as soon as possible between your understanding of stakeholder expectations and your performance on them to avoid playing a long-term game of catch-up.

Covid has rewritten the rules of how businesses operate and serve their stakeholders. However, not every Covid-imposed change is now viable. Deciding which pandemic strategies to keep and which to drop must be foremost.

Reshaping your organization along these lines is likely to see it well positioned for future growth and prosperity.

About the author

Graham Kenny is CEO of Strategic Factors and author of the book Strategy Discovery.  He is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He is a regular author in the Harvard Business Review and has been a professor of management in universities in the U.S., and Canada. You can connect to or follow him on LinkedIn.