How will you react when you are punched in the mouth?

Mike Tyson is an unlikely poet. His claim that ‘everyone has a plan until they get punched in the mouth,’ will live long in the memory as it captures an important universal truth. Things go wrong and we need to deal with them. Founders must learn the art of operational agility, of being able to roll with the punches and come out with a few of their own. You will find a lot of blogs on the need for such agility. You will find considerably fewer on the subject of strategic sensitivity, which is equally important for founder success.

Strategic sensitivity is about developing real-time situational awareness. It involves detecting small signals in the marketplace and feeding them into the strategic brain driving your business, enabling rapid reassessment and adaptation.

I know what you are thinking, it sounds a lot like William Boyd’s OODA (Observe-Orient-Decide-Act) loop. His system enables fighter pilots, marketers or product managers to rapidly assimilate information and make real-time decisions. There are parallels but there is an important distinction to be made. OODA loops are operational: they shape operational decision making. The vast majority of decisions fit this mould and to accelerate or even automate this process is clearly a good thing. Right up until one of those decisions has negative strategic consequences.

Strategic sensitivity is about spotting these and adjusting your decision making structures, your aims and policy, and your resource allocation accordingly. It is needed to direct and calibrate your operational machines. If you allow operations to rule strategy you are in danger of winning your battles but losing the war. Other, less able rivals will target and secure your biggest commercial prizes.

One of the best ever examples of strategic sensitivity was the Allied aerial reconnaissance programme in World War 2. RAF Medmenham became the nerve centre of a historic intelligence effort. A squadron of specially adapted Spitfires systematically photographed Western Europe day-by-day, taking hundreds of millions of photographs. These were analysed for anything that could have immediate operational impact (for example the movement of enemy troops or ships) and then passed to subject experts to consider their strategic importance. It was this team that famously located Peenemunde as the development centre of the V2 rockets, even though no one knew that rockets were possible or what they looked like.

Few founders have a fleet of Spitfires to hand, or thousands of WRENs to process the intelligence. But they do have ready access to data and tools that can deliver similar benefit. The trick is to get a system in place. This is how you do it:

Firstly, document your strategy. Just before you blow the dust off your Business Model Canvas, remember that is a business plan rather than a strategy. The BMC will map the various dynamics in your business, but it will not tell you the commercial opportunity that exists at any given moment or provide direction as to how you can capitalise on it in the face of competition. This is the essence of strategy. What is your goal? How can you win with the least effort? What do you need to do to achieve it?

Once you have these answers, consider what information and assumptions your strategy is predicated upon. Is it based on market data? The presence of certain trends or customer behaviours? An analysis of the weaknesses of competitors? An assessment of the utility or value of certain technology? These must all be documented because they will all change, and sooner than you think. Are there any major initiatives you would look to progress if circumstances were different? What would trigger change? It is also a good idea to create a risk register as soon as possible. This will force you to document the various scenarios where your business will be materially affected. At the very least these will be less of a surprise if they come to pass.

The next phase is to work out how you will know when strategically relevant change occurs. What information or market signal will communicate possible change? For example, you may want to keep a wary eye on new start-ups offering new technology or solutions, or the partnerships signed by rivals, or the M&A activity of major players. Markets are full of signals. You have to be clear which matter most to you.

This shapes the intelligence activities that you need to set up. They may be as simple as creating some daily Google alerts, weekly social media monitoring reports or monthly management checks. Or they may be as complex as flying unarmed Spitfires over hostile territory. The key thing is to establish the feedback channels and analytical frequency that are needed for your business and the strategy it is pursuing. Sharing these with staff and encouraging them to be your eyes and ears will multiply your effective reach and overall sensitivity. Too often strategies remain locked in secure management folders. They need to be shared and socialised so everyone can enrich the process.

Finally, you need to be ready to act. Strategy is about acting and making big decisions. What are you trying to achieve? How are you going to achieve it? How are you going to resource the effort? How are people going to be organised and empowered to achieve results? There is no point in developing strategic sensitivity if it then takes months to plot a new path. You need agreement at leadership and board level about acting quickly in certain, foreseeable circumstances. Changing targets and reallocating resources sounds simple, but in practice is difficult because every strategy and course of action has a momentum of its own.

Don’t expect your new strategic sensitivity to work in the same way as your OODA loops. It is unlikely you will have daily decisions to consider. Many of the signals will be false or unimportant. The system is there to detect those that are significant. A good strategy supported by such a system should stop you from doing the equivalent of an ‘Evander Holyfield’ and stop you from ever getting into the ring with a Mike Tyson.

UP AND TO THE RIGHT.