Dynamic Steering As a Tool for Strategic Decision-Making

We began our journey exploring the terrain of self-management by looking at Purpose, defined broadly as a “reason for being.” Purpose is like a compass, providing critical orientation for leading organizations 🧭 It’s no longer a luxury, but essential in today’s business landscape. If you missed the introduction or are a new subscriber, you can learn more here.

This week we are exploring Strategy, the how behind purpose. In pyramid hierarchies, strategy is a top-down process and directive 📣 The executive team sets forth a grand plan, through a series of decisions and prescriptive actions, to achieve the organization’s mission and purpose. There is a whole body of management literature written from this perspective. But it has real limitations — especially in highly dynamic environments.

Covid turned that cherished approach on its head. Overnight, companies had to re-evaluate entire lines of business to stay relevant 📈 Human “sensors” on the frontlines, who hold critical data around customer needs and preferences, became far more important. Companies that embraced adaptive strategy processes raced ahead of the rest 🏃🏽‍♀️

At HolacracyOne, we responded by retooling our social technology and upgrading the Holacracy Constitution to v5.0 to support a broader range of companies on the path to self-management 💡 When clients asked for more incremental, customized solutions, our in-house Agile expert Michael DeAngelo led this transformation in partnership with The Athena Group and other early beta testers. (Learn more about the upgrade to v5.0 here or attend an in-person training event to experience it yourself!)

What is adaptive strategy, aka dynamic steering?

Dynamic steering, a term sometimes associated with Agile management methodologies, refers to a decision-making process that emphasizes continuous adjustment and real-time adaptation ⌚️ Instead of making decisions based on static, long-term plans, organizations using dynamic steering make smaller-scale decisions more frequently, continually adjusting course based on the current situation and the most up-to-date information. For example, Spotify is often celebrated for the way its cross-functional, autonomous teams apply similar principles to fuel innovation.

This approach enables organizations to respond rapidly to changes, whether those are shifts in the market, technological advances, internal developments, or other factors. Dynamic steering requires a culture of trust, openness, and fluidity 🌊 where team members feel safe to share information, voice their perspectives, and make decisions.

Honing the practice of sensing-and-responding 🔁

Holacracy founder Brian Robertson often uses the analogy of operating a plane to convey the difference between collectively “sensing & responding” to the environment vs. relying on a top-down “command & control” approach to strategy. Every organizational sensor holds critical information necessary to safely operate the metaphorical ✈️. At worst, ignoring a lone flashing engine light — i.e., failing to listen to fresh and diverse perspectives — can lead to catastrophe. At best, unique insights steer the organization in service of its purpose.

A healthy culture of sensing-and-responding means that every individual is equipped with the tools needed to identify and act on any felt tension — in this context, defined neutrally as “awareness of any gap between reality and what’s possible” ↗️

Mature self-managed organizations encourage the development of intuitive intelligence as much as rational observation through sensing-and-responding to tensions. This is a wholly different approach than being asked to adhere to a rigid, top-down strategy — and with far more generative results. To effectively act on these tensions and intuitive insights, you need:

👥 Distributed decision-making power

Authentic P2P (peer-to-peer) dynamics, in contrast with the P2C (parent-to-child) dynamics that are prevalent in pyramid hierarchies. In self-managed systems, sovereign individuals are expected to seek the advice of peers who may be impacted by their decisions or have a relevant zone of expertise.

📊 Information and data transparency

In healthy P2P environments, members share information freely, so everyone has the scope of data required to energize their roles and operate entrepreneurially.

🗣 Cross-functional collaboration

Access to data also means enjoying open lines of communication. The role-based structure that underpins self-managed organizations is design to facilitate this.

🤝🏾 Healthy conflict resolution processes

When everyone is encouraged to act as a sensor and process their tensions, conflict is inevitable. But with the right tools, it can be healthy. Frameworks like NVC (Non-Violent Communication) and IDM (Integrated Decision-Making) give participants pathways to resolve tensions and strengthen relationships with their peers in the process.

Zooming out: Dynamic steering involves continuously facing and responding to reality. It’s designed to present guardrails around the negative cascading effects of groupthink, which is often propelled by shared delusion, denial, and attachment to decisions-by-consensus.

Sensing-and-responding honors everyone’s individual and collective reality. It’s a collaborative practice honed over time.