Crafting Corporate Narratives: Zoom Out, Zoom In

I’ve been writing a lot about the significant missed opportunity to craft a compelling corporate narrative here and here. Done right, this corporate narrative can mobilize a large number of third parties to provide growing leverage, learning and loyalty for the company offering the narrative.

While this is appealing to many executives, they stumble over the process of crafting a compelling narrative. How do they identify a powerful opportunity out in the future that’s both credible and motivating to a large number of third parties? After all, the future is so uncertain that it can feel very intimidating to peer out over the horizon and look for these kinds of opportunities.

The zoom out, zoom in strategy approach

It definitely will take executives out of their comfort zone, but it’s a comfort zone that they need to escape if they’re going to continue to create value in a rapidly changing world. It turns out that “zoom out, zoom in,” an approach to strategy that I have been championing, can be a powerful tool to help craft corporate narratives.

The zoom out, zoom in approach emerged first among a number of successful Silicon Valley companies, but it can be applied by any company that wants to avoid the risk of falling into incremental, reactive strategies. It challenges the conventional strategic planning horizon of one to five years (we’re all familiar with the five year strategic plan). Instead, this approach to strategy focuses on two very different horizons – 10 – 20 years (zoom out) and 6-12 months (zoom in). Companies pursuing this kind of strategy actually spend very limited time on the one to five year horizon – their view is that, if they get the other two horizons right, everything else will take care of itself.

On the 10 – 20 year horizon, they focus on two questions: First, what will our relevant market or industry look like 10 – 20 years from now? Second, what kind of company will we need to be in order to be successful in that market or industry?

To be clear, they’re not seeking a detailed blueprint of the future 10 – 20 years but instead are focused on the most powerful and predictable trends that will significantly affect industry structure. One successful pioneer in the personal computer business back in the early 1980s had a zoom out view that could be summarized in two sentences: “Computing is inexorably moving from centralized mainframes to desktop computers. If you want to be a leader in the computer industry, you will need to be a leader on the desktop.”

That’s certainly not a detailed view of the future, but it was clear enough that it enabled the company to make the right choices in the short-term. This leads to the zoom in part of the strategy.

On the 6-12 month horizon, the focus shifts to identifying 2-3 business initiatives (no more, only 2-3) that could have the greatest impact in accelerating the movement of the company towards its zoom out destination over the next 6-12 months. For each of these business initiatives, the two key questions are: Do we have a critical mass of resources deployed against this initiative? What are the metrics that we can use during the 6-12 month period to assess our progress towards achieving the impact that we are seeking?

If you sit in a leadership meeting of a company pursuing this approach to strategy, you’ll find that the executives shift quickly and seamlessly across these two horizons as they continually seek to refine their zoom out view based on the progress (or lack thereof) of their zoom in initiatives while at the same time evolving their zoom in initiatives to more effectively target the zoom out opportunity.

The zoom out, zoom in approach to strategy is a powerful way to overcome two related challenges for large, existing companies. First, it pulls executives out a short-term mindset regarding the business and helps them to build alignment around a shared long-term view of relevant markets or industries. Second, it helps them to develop tighter focus and overcome a natural tendency to spread themselves too thinly across too many business initiatives, none of which receive a critical mass of support. Most importantly, the focus that they develop is related to a longer-term opportunity, not just prioritizing among the multitude of short-term events that command their attention on a daily basis.

This approach to strategy employs a broad range of scenario development tools and approaches to draw executives out of their comfort zone, but it differs from scenario development as commonly practiced on multiple levels. First, it forces the executives to pick not just the most probable scenario, but the scenario that they will commit to pursuing. Second, it explicitly addresses the potential to shape scenarios and the probability of their playing out. Most scenario exercises treat the future as an external given and therefore it’s only necessary to assess the likelihood of various outcomes. Third, and most important, the zoom out, zoom in approach requires the participants to commit significant resources to several short-term initiatives that are driven by the longer-term zoom out view of the market. This is not just an abstract, conceptual exercise – it has real impact on near-term resource allocation.

Crafting a corporate narrative

So, how does this all contribute to the development of a compelling corporate narrative? The zoom out, zoom in strategy approach can provide a very useful context to craft a corporate narrative. And the focus on crafting a narrative that is a call to action to others outside the company can help to overcome some of the common pitfalls in developing a powerful zoom out view of the business.

The zoom out view can provide a structured way to identify and focus on promising opportunities that are emerging from long-term forces playing out over decades. The narrative framework provides an important filter for prioritizing opportunities. Too often, executives of companies understandably tend to focus on opportunities exclusively through the lens of their own company. They take an inside-out view of the future.

The most effective zoom out, zoom in approach is one that starts by zooming out to anticipate how customers are likely to evolve and what their most significant emerging unmet needs are likely to be. Seen through this lens, we are likely to see emerging opportunities from a customer perspective. Of course, there will always be a need to bring this back to the company to confirm that there’s a significant opportunity for the company in addressing these unmet needs.

But, if we do this right, we now have the makings of a long-term opportunity that could be a powerful call to action to many others outside the company, ranging from customers to third parties that have the ability to offer complementary products and services to augment whatever the company can offer to customers.

The key is to make it clear that the opportunity out in the future is not inevitable, that there are challenges and obstacles that stand in the way, and that achieving the opportunity will require action from many parties. But the motivation to move forward will come from a clear view of why many parties can benefit from pursuing the opportunity, not just the company crafting the narrative. Ideally, the opportunity is one that will in fact expand as the number of participants grows, unleashing network effects that will draw more and more participants in over time.

The zoom in part of the approach also can play a critical role in crafting a credible narrative. The most powerful narratives are ones where relatively modest actions in the near-term can yield tangible impact in advancing participants towards the longer-term opportunity. These are much more motivating than narratives that require millions of dollars of investment and years of development before any impact can be achieved.

By pursuing zoom in initiatives, the company crafting the narrative can start to build credibility for the broader narrative by showing near-term impact in accelerating movement towards the longer-term opportunity. This can inspire those being called to action to focus on near-term impact as well.

Shaping strategies

Those of you who have been following me for a while will start to see several threads in my writing start to weave together into a tapestry. In this blog post, I’ve focused on how my concept of corporate narrative can be enhanced by pursuing a zoom out, zoom in approach to strategy.

But there’s another thread worth mentioning. I wrote an article for Harvard Business Review many years ago on the power of shaping strategies. Rather than falling into a reactive mindset, sensing and responding to whatever is happening around us, I argued that there’s a growing opportunity to pursue shaping strategies that seek to restructure entire markets and industries by mobilizing a growing number of third parties to invest in a new industry structure.

Hopefully, one can see how corporate narratives can provide incentives to mobilize third parties to act in pursuing the opportunity to restructure the market or industry. And, one might be able to see how a zoom out, zoom in strategy approach can help to generate a compelling corporate narrative and provide the foundation for a shaping strategy designed to mobilize others.

Bottom line

There’s another thread underneath all of this. We need to harness the power of pull so that small moves, if they’re smartly made, can set big things in motion. Corporate narratives pull a growing number of third parties together to pursue a long-term opportunity. If framed in the context of a zoom out zoom in strategy, these narratives can help to provide growing leverage, learning and loyalty for the company crafting the narrative.

To harness the power of pull more effectively, ask yourself the following questions about the company or organization you are involved with:

• Do we have a shared view of what the most significant unmet needs of relevant customers will be 10 – 20 years from now?
• Do we have a shared view of what kind of company we’ll need to be 10 – 20 years from now?
• Have we framed a corporate narrative that is a powerful call to action for others outside our company to address a long-term opportunity?
• Are we pursuing a small number of short-term initiatives aggressively enough to demonstrate significant near-term impact?
• Are we reflecting regularly on all of the above to ensure that we are evolving and refining these approaches to generate even more impact?

Comments

[ASHITLUTHRA]

Mr. Hagel,

For me this is an unusual way of thinking. Thank you for writing this post for it has planted a few seeds on how we can get better with our planning for the longer term.

[Tobinw]

John - this post really hit home based on what I have observed and learned over the last three years of designing narratives for corporations. What started out as a 10 - 20 year view was scaled back to 3 - 5 because the leap was too large in our immersion based approach. That said, the "vision" or "futurecasting" module of our approach really helped to drive home a "leap" is necessary to get out of incremental thinking trap that I see consistently. I find it helpful to supplement immersions with subject matter experts and futurists who can help "pull" the executive teams into a place that is uncomfortable, yet purposeful. Thanks for adding more clarity to the world of corporate narratives.

[Leonard Lane]

A powerful message for leaders in an exponentialy changing world. Combines the best of the qualitative and quantitative aspects of the strategic process