If you're not going to follow up your long-term strategic planning with future capability planning, don't even bother starting the strategic planning work. Strategy is about the creation and allocation of resources to the right place in the right way at the right time over time. Last week's article on Practical Strategy Lessons focused on the allocation of resources over shorter-term horizons. This article focuses on creating resources over the long term.
Bosch and Seeo
Automotive industry supplier Bosch just announced its acquisition of Seeo, a developer of next-generation solid-state batteries. At least some like Lux analyst Cosmin Leslau suggest this "acquisition has some wrinkles that make it a risky bet for Bosch". In particular, Seeo's status is "fragile", it's "burning through cash" and has "technical issues".
Why pay real money for a questionable business?
Because it's not about the business.
Linda Beckmeyer, a Bosch spokeswoman, said that Bosch has acquired all of Seeo's intellectual property plus its research staff. That's what they wanted. Not the current business. Not the current customers. Not even the current technology. They wanted Seeo's capabilities.
You can imagine the conversations.
"We need to increase our footprint in battery development."
"With our people?"
"By buying a company with people that know this space so they can help everyone in our company up their game in this area fast."
And that's just what they did.
Future Capability Planning
This is future capability planning in action and an example of why succession planning and talent development are not enough.
Talent development is about helping your existing people obtain the knowledge and skills they need to build their natural talents into valuable strengths.
Succession planning is about identifying who is going to take your senior people's places in the future.
Both of these are tactical exercises in support of your current strategy. Both start with existing people. Almost by definition, these people were brought into the organization to help drive the current strategy (or perhaps even an earlier strategy.)
Future capability planning is the logical, essential next step in a strategic planning process. Once you identify the strategic options you are going to pursue to bridge the gap between your aspirational goals and current reality, you need to figure out how to bridge the operational and organizational gaps required by those strategic options.
Bosch needs battery capability much faster than it can train its current people to get there. Instead, it is filling its capability gap with the Seeo acquisition.
Strategic Planning - Future Capability Planning Linkage
Strategic planning and future capability planning need to be hard wired together. As soon as you've locked into your strategic priorities, your very next question should be what future capabilities are required for us to be able to deliver those priorities? Think in terms of these steps:
=> Strategic priorities
=> Future capabilities required by those priorities
=> Existing capabilities
=> Plans to fill the gaps (human, financial, technical and operational) including:
• Current people to develop/plan to develop them
• People to recruit early on and develop/plan to develop them
• People to recruit later
Note the three ways to fill the human gaps: 1) invest in talent development for current people, 2) recruit people now and invest in developing them, 3) recruit "fully formed" people later.
Invest in talent development
The first approach has the advantage of leveraging your existing resources and is the least disruptive culturally. It only works if your existing people have the required talent and you have enough time to develop them.
Recruit people now
This approach gives you the ability to recruit people with the talents you need, and then develop them. This still requires you to have enough time to develop them.
Recruit "fully formed" people later
The advantage here is that you don't have to invest time developing these people. On the other hand, they are going to be more expensive and have a greater risk of cultural mismatch.
Use one or more of these approaches as you see fit. Just have a plan.