In the increasingly fast paced world we live in, it seems more and more difficult to make plans for the future. There are all sorts of ways of thinking about strategy; what it is, how it’s formed, and what it does (a favourite book of mine is Strategy Safari by Mintzberg), but a common view is that it’s a game plan. A way to compete and win.
The problem, as I see it, is that these days, game plans need to change, and change fast. Clients change, their needs change, competitors change, technology changes, everything changes. Yesterday’s plans can hinder not help. Yet at the same time, if an organisation changes its strategy in real-time, will it lose its identity? Cause confusion? Allocate resources effectively?
There’s no single answer for this; every business needs to develop and adapt a model that works for their circumstances. What I do believe, is that those companies that go through a charade of an annual strategy process, and spend months working on long term plans with the intent of sticking rigidly to them over the coming years, face more and more challenges from agile, more relevant competition.
Often with these sorts of annual processes, the market information used is far removed from the market by the time it gets to the strategic decision makers; it is distilled, analysed and sanitised before it is used (not to mention often months out of date and/or originally prepared for a different purpose). Competitive information is often paper thin and much of it speculative. Thinking about the future is often incremental and conservative, constrained by the process itself. The process itself often takes weeks (if not months); how can this be right for today’s marketplace?
Thinking time; strategic and practical?
One school of thought might be to say that strategy of this type is simply not relevant any more, but I think that’s over simplistic. Somebody (everybody?) needs to be thinking about how to win (or how to collaborate?). The underlying principles of competition, industry analysis (Porter et al) remain valid and helpful frameworks; they just need adapting and using differently.
In a changing world, the way organisations think about strategy also needs to change, but in this period of transition it’s critical that organisations and people don’t stop thinking all together. Consider who is thinking, why they are thinking, and what they are thinking about. But don’t stop thinking (or doing, but that’s another post).
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My working definition of ‘strategy’ is where you deploy your resources (‘tactics’ is then how you use them.)
I think the need for instant, fast-response strategy is a myth. Despite the wishes of the weberati, markets don’t change THAT fast.
Tactically, we might need instant response. But in the majority of cases the 5/3/1 Planning Cycle still holds.
Interesting points Paul; appreciate the comments. While markets may not yet be moving at the speed the weberati wish, there’s no question they are changing more and more quickly, and yet the strategic planning processes of many businesses haven’t moved on much from the 80s.
It maybe I’m being overly critical, but it seems to me the need to be more agile is very real and I think the 1/3 components of the planning cycle have value, but I think planning on a 5 year horizon serves a very different purpose these days and unless you are in an industry that moves at a much slower scale (possibly because of the capital intensity and longer term nature of its projects eg the oil industry) then I think its more akin to scenario planning than actionable strategy.
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