It’s April 2018. Ralf van Vegten takes on the role of managing director at NEP in the Netherlands, the media-technology company that facilitates numerous well-known television broadcasts. Op1, RTL Nieuws, Veronica Inside and I love Holland, just to name a few. A tough job awaits Van Vegten. Their market is changing faster and faster, driven by rapidly evolving technology and new ways of media consumption. These developments are endangering NEP’s existing business models. Action needs to be taken.
He is also concerned about the enormous turnover of employees. The distance between the shop floor and MT feels like going to the moon and back and in the annual staff survey employees are downright crushing the companies top on how it communicates its strategy. Van Vegten realizes that something has to be done. It is time for change, as soon as possible.
“At this rate, part of the turnover will evaporate in the coming years.”
Communicating your strategy.
For Patrick van der Pijl, founder of Business Models Inc. (BMI•), the situation at NEP from two years ago is not an isolated case. He sees it happening all around him. “Being able to adapt to changes in the market, successfully developing new business models and increasing the involvement of employees. All these ambitions have the same start point: your strategy. And that is exactly where many organizations fail.”
“They present their annual strategy with a big bang, a large and usually expensive event where everyone is brought together and will be up to date in one go. But it really cannot be that strategy is a surprise for employees. Something they hear once a year and that they have to translate into their own department. To the daily practice in the workplace. In this way, strategy remains a kind of paper reality and it never becomes a real conversation.”
BMI approaches this as a design process.
Spreadsheets sent back and forth between departments. Filled with forecasts about customers, turnover and profit. And an MT which packs all this information into an extensive strategic document. It is the way in which many corporate organizations still draw up their long-term plans. We think this method is quite outdated now. Consider this. Market developments, new technology, other business models and changing customer needs; they receive little attention in this traditional approach. And that while these factors largely shape the future of your organization.
A TV format.
We prefer to see strategy development as a design process. Similar to a TV format where you follow a fixed pattern to stimulate various strategic discussions in the organization. Let’s take the market as an example. The process begins with a thorough analysis of that market, where a preliminary design rolls out.
A context map, for example, in which matters such as customer needs, legislation and regulations, new technology and uncertainties are clearly presented in a diagram. All relevant features of that market are visible at a glance.
What follows is a one and a half to two-hour strategic discussion with members of the MT and a handful of product specialists. Facilitated by a moderator who continues to ask the right questions during this part of the process. Do these uncertainties match our perception? Is there perhaps a technology that we overlook? And do we take sufficient account of new developments in society? After the strategic discussion about the market, topics such as the customer and the business model will follow. This way all important aspects are discussed one by one.
Roadmap for the future.
With this approach your organization will develop a roadmap for the future within two days. One that forms the basis for the strategy. You validate the results by entering into discussions with customers and other partners. In this way, a strategy does not remain a collection of spreadsheets, full of untested assumptions, but becomes a vision based on current circumstances.
Expensive strategy events.
Business Models Inc. worked as a strategy partner for a large international financial institution for five years. Every year, some 250 top executives of the company gathered in a conference room, where they were immersed by the board for two days in the strategic plans for the following year. No expense has been spared. Preparation time? At least six months. A period in which everything had to be prepared to perfection. “What theme are we doing this time? Who will speak on stage? Where will all those people spend the night? What will we do with the catering? I always noticed how big those events were set up. Megalomaniac almost”, says Van der Pijl.
Message quickly out of date.
Rolling out your strategy in this traditional way has another major drawback. And that’s the speed. Or rather, the lack of it. “Preparing for such an event takes at least half a year. Then the senior managers have to share everything they have heard on stage again with their team. But not before the head of the communications department took four weeks first to work on a text. By the time the strategy reaches the shop floor, the story is actually outdated. To present your strategy this way is not only extremely expensive, but also totally inflexible.”
“Presenting your strategy in this way is in addition to being extremely expensive, also totally inflexible.”– Patrick van der Pijl
People make the difference.
Back to the spring of 2018. Back to Ralf van Vegten. The brand new managing director wants to know how sustainable NEP’s current business models are, researching which new value propositions stand a chance and clarifying which core values the company can move forward in the next ten years. He calls on the help of the Business Designers of Business Models Inc. (See part ‘BMI• approaches this as a design process’). “After the design phase, our challenge was to get the strategy to every corner of the workplace. I wanted to organize it in a different way than we were used to, so the employees would get a lot more feeling with it. That it would really be a conversation. This was in line with my ambition to put people at the center of NEP. After all, equipment, hardware and software are for sale everywhere. It is the knowledge and experience of about our 800 employees that make the difference.”
Your company as a journalistic format.
Bring as many people as possible into one room and then inform them about the strategy. A story that the CEO himself has already played 30 times over in his or her head. For most employees, this approach still remains a vague attempt, Van Vegten notes. So, he comes up with a new approach for the 2019 annual plan. “Presenting complicated stories in a way that everyone understands, while also continuously facilitating fruitful interactions. Where does that happen almost every day? During talk shows of course! We then asked the editors of Jinek and – at the time – De Wereld Draait Door to make an episode about NEP, with the entire management team. We gave them all our information and they got to work. Including preliminary discussions with us, the employees and a number of customers.”
“Being interviewed by a journalist is a real different story, I can tell you that.” – Ralf van Vegten
At the table with a journalist.
Communicate your strategy by a journalist. As the cameras rotate, every word, every smile, as well as every moment of hesitation, is captured sharply. Although the questions are prepared, they are certainly not pre-chewed. That gives a complete different dynamic than a staccato stage conversation where everything is written from A to Z. “Being interviewed by a journalist is a real different story, I can tell you that. Employees feel that it is not pre-cooked and that you are telling a real story. This leads to a more authentic message that creates stronger buy-in with the audience.
Diversity as a core value.
During the NEP talk show with Eva Jinek as host, the diversity policy of the company is also discussed. It is a subject that Van Vegten wants to promote in the coming years. “It was good that she brought it up, I thought. Because we had already developed a whole plan on this. But then it came: “How can you say this? I am sitting here with all white men of about 45 years old at this table?’ Well, I hadn’t seen that one coming”, says the managing director. “But it immediately puts you on edge. I had to expose myself, but of course I had the opportunity to explain how we want to make our company more diverse in the coming years. With more women and people from different backgrounds, also in the MT.”
“Employees see the changes with their own eyes and understand better where we want to go with our organization.” – Ralf van Vegten
But it doesn’t stop at the talk shows alone. NEP now launches a new video update every month, in which Van Vegten always shares one part of the strategy with its people. About plans for centralized production, for example, where all of the company’s resources move to data centers. “That sounds vague, of course”, Van Vegten admits. “But we always show very concrete steps in those video updates, such as the construction of data hubs in England and Norway in this example. Then the matter suddenly becomes tangible. Employees see the changes with their own eyes and better understand where we want to go with our organization. Embedded in each type of communication, is the option to open the channels for conversation with the audience.
Strategy, communication and conversation.
According to Patrick van der Pijl, this approach shows that activating a strategy can also be done differently. Not in the form of a one-off event, by the end of the year, but more as a daily rhythm, a heartbeat. “This is what we mean by Strategy as a Service (SaaS). Your strategy as a continuous process that you design, communicate and converse. In this way, a vision is no longer reserved for the MT and a handful of consultants, but becomes something everyone in the organization feels”, says Van der Pijl.
Strategy as a Service in 3 parts.
Developing a clear vision, preferably in the form of a design process.
Not through one offsite, but throughout the year in various forms of communication that fit the culture and size of the organization.
Continuously fine-tuning the strategy by remaining in dialogue with all internal and external stakeholders of the organization. In this way you always collect sufficient input for updating the strategy.
You can communicate – as NEP does – with a talk show, video updates, and interactive video sessions. But of course, there are also other forms imaginable, which need to cost less money. Webinars, interactive workshops and small-scale sessions per department, just to name a few examples. “Choose a way of communication that suits the organization and the person which sends the message”, says Van der Pijl. “That is crucial to appear authentic and to ensure that the strategy is actually supported. Also share things that need improvement, because only then you are really credible.”
But as said, you are not there as an organization yet. Processes in a company are constantly changing. Just like markets and clients wishes. Moreover, not everything designed at the drawing board proves to be equally workable in practice. A strategy is therefore never finished, it remains a document in development. “This is about the third part of SaaS, conversing. Actually, that is the starting point of the whole process. It means that you have a continuous conversation about strategy. Especially with your own employees, but also with customers, suppliers and other stakeholders. In this way you continue to adjust the strategy and changes automatically become part of your communication again”, says Van der Pijl.
“It means that you continuously having a conversation about strategy.” – Patrick van der Pijl
As a pacemaker of the heartbeat.
Design, communicate and converse. Together they form Strategy as a Service. It is an approach that fits in this spirit of the time, in which changes follow each other quickly and employees are much more vocal than before. Organizations that succeed in getting the 3 components to work together optimally, have proven to be more successful. Yet it is precisely that aspect that proves it to be difficult. “Conversation about a strategy is not enough developed in most organizations. We are the pacemaker for the heartbeat and can facilitate that part from A to Z”, says Van der Pijl.
“However, many companies already have a strategy and communication department. BMI• is not there to replace the people, we are there to support them. We do this in co-creation and by adding the missing capabilities for each part. See our role as driver of the whole process and the cement between the different departments. As external parties we are not focused on the issues of the day and often manage to break through existing walls faster in an organization.”
Organizations are becoming more agile.
This is how Business Models Inc. and NEP make Strategy as a Service accessible to other brands. Business Models Inc. as the specialist in strategy design and facilitator of the heartbeat, NEP as the creative partner and production party that translates and communicates strategic messages through a wide variety of channels. From talk show to webinar, one-on-one interview and video update. Strategy as a Service makes organizations more agile. In this way, they turn the strategy story into the daily practice of the workplace and help employees point the right direction. Van der Pijl: “Strategy then becomes what it should be: a conversation of everyone in the organization. Many companies aspire to do this, but can’t seem to manage to do it themselves. We make sure that all puzzle pieces fit together. ”
“Strategy then becomes what it should be: a conversation of everyone in the organization.” – Patrick van der Pijl
Strategy as A Service, try it yourself.
Would you like to experience how SaaS works in practice? In co-creation we make an initial custom design and then test it on a small scale. This way we keep it very accessible. Based on this experiment you will discover how it works and what it can mean for your organization. We only extend SaaS further with proven results.
Staff turnover spectacularly declined.
It is now more than two years ago that Ralf van Vegten was put at the helm of NEP. Two years in which a lot has happened. The high-performance benchmark shows strongly increased employee engagement, reduced employee turnover and a much more agile organization with employees that understand the strategic direction and what their respective role is in the bigger picture. A result that Van Vegten had not dreamed of in 2018. The employees survey also shows that the vast majority of employees now better understand where the company wants to go.
“It becomes even more concrete if you look at the turnover rate of our organization”, says Van Vegten. “That has been halved compared to two years ago(!). That means savings of at least 1.5 million euros in productivity, recruitment costs and training hours. The impact we have been able to realize with Strategy as a Service has really surprised me. NEP employees now much better understand what we would like to achieve and why we are working hard every day, which I consider to be the biggest gain we have achieved in the past two years.”