Strategy is such a misused, misunderstood, and arcane term. Nevertheless, if you work in private enterprise or a government department you will probably use the term every day, tossing it around with gay abandon among colleagues who are as equally clueless as you.
In some quarters strategy has become something of a status symbol, distinguishing the 'macho' responsibilities of MBA-armed executives from numerous hapless troops who, buried in the bowels of the organization, juggle the dual imperatives of serving customers with a range of conflicting instructions from those who are presumed to know far more than them.
Originally a military term defining predetermined offensive and defensive moves and countermoves deployed by armed forces in the heat of battle, the orthodox approach to strategy arises out of the cause and effect hypothesis of game theory. The intention of strategy in this context was to capture territory or to inflict casualties on a scale that would convince the enemy to surrender.
Incidentally, a central idea in this regard, which happens to be an elementary flaw in today's context, is that there must always, ipso facto, be winners and losers. In theory, of course, it is expedient to portray the outcome of a game in such well-ordered terms, particularly as it disregards any distracting factors, such as the social value inherent in team-based activities, for example.
In the hurly-burly reality of today’s volatile and unpredictable world, however, where new and unholy alliances form and dissolve so rapidly, such a crude concept is bound to cause confusion as much as it creates impossible expectations. In spite of this, the militaristic notion of strategy, deliberately embraced by business schools and enthusiastically pursued by the majority of business leaders, has been hard to erase.
The most common use to which strategy of this kind is invariably put is the pursuit of growth in all its forms - brand and market size, shareholder value and profits in the private sector, and gross domestic profit and employment, in the public domain.
Sometimes it seems that getting bigger is the only thing that matters. Growth equates to progress, we are constantly told by economists who are supposed to know about these things. So a lack of growth must mean failure. And we all know what that means!
In private enterprise the treadmill of unremitting merger and acquisition activity, aided by pressure from the Board and amplified by intensely competitive rivals, spawns ever larger corporations that often become obsessed by this one pursuit - unaware of the harm they might be doing to themselves and others, the economy in general and, subject to the industry, the biosphere. When growth becomes a cancer eating away at the moral wellbeing of the enterprise, nobody wins.
Our unending obsession with growth at any cost ignores the possibility that growth could mean getting better rather than bigger, a fact lost on more aggressive company directors, shareholders and investors - high priests in the cathedral of capitalism.
Such simplistic, linear thinking has given rise to huge, potentially catastrophic, socio-economic problems in society - such as the accumulation of power by a new class of billionaires, for example, as well as excessive remuneration for CEOs, and the issue of talent retention within individual enterprises.
Originally, in corporate life at least, planning was not in the least bit strategic in nature. On the contrary, it was a sensible response to the increasing complexity of production, an attempt to coordinate people, equipment and resources to become more efficient.
Eventually, as methods became more reliable, planning took a long-term view. By and by, as managers realized they could increase turnover by calculating which, out of their stable of products, would sell, and to whom - thereby optimizing the capacity of their production plants - various kinds of forecasting and budgeting were factored into the planning process.
Planning only really became strategic though, in the true militaristic sense of that term, following World War II when the global business environment began showing signs of such competitiveness that each corporation was required to out manoeuvre the other if they wished to survive. At that stage the knives came out.
Initially, relatively primitive strategies were implemented, mainly around branding and market positioning. Eventually, new technologies coupled with sophisticated strategic management systems, and enterprise planning software, enabled firms to change the rules of competition in the blink of an eye. The game had become so complicated that entire departments devoted to strategic planning were set up.
Some of these, like that of Royal Dutch-Shell for example, deservedly became leaders in the fields of scenario planning, strategic conversation, futures search, and applied game theory, which expanded the field of strategy considerably.
At some point, coinciding with intense competition arising from globalism, the effort and imagination channelled into formulating strategy became such a crucial element in a corporation's performance and financial success, that ideas hatched at the top levels of the enterprise, with or without direct input from the Board, meant senior executives were compelled to go to great lengths to safeguard their plans from preying eyes. Any information of a sensitive nature, like proposals to downsize the workforce, or acquire another business, was restricted to an inner circle. With leaks considered an existential threat to operations, strategic intentions were considered far too risky to circulate to anyone other than a small, trusted, caucus.
Today, more often than not, strategy has become a top-down linear process where confidential plans, goals and targets are determined by an elite group of company directors, senior executives, and their advisers, who may or may not be in touch with the real world, and instructions, along with targets and performance measures, are delivered to discrete parts of the business by edict.
Because the sense-making and design components of strategic planning have become neglected, in many instances confined to annual events undertaken by senior people in the company, irrespective of their ability to think or act with foresight, any plans tend to lock the business into a narrowly-defined path, typically within an event-horizon of from two to five years. With few resources devoted to the actual execution of strategy, and most of that devoted to conducting business-as-usual, especially in sales-oriented companies, it is hardly surprising that even the best intentions frequently stall.
We are all too familiar with this approach. But the unavoidable consequence is that the hard work and robust thinking that went into the development of the strategy is hardly ever realized.
For one thing, while even the most subtle changes in contextual conditions demand constant recalibration, senior managers rarely have the time to spend making changes to, or refining, their original ideas, seeing such 'navigational' and iterative tactics as a waste of time when they could be busy doing something. For another, bureaucratic habits and systems that, with a minimal amount of re-engineering, could facilitate the optimal deployment of any new strategies, often remain untouched due to a lack of adequate appreciation, resources, or motivation, as well as an unwillingness to come to terms with flaws in their design. Admittedly the digitalization of work is at long last helping to shift this mindset, although in many corporations, ingrained habits remain intact while the new technologies go untapped for their true potential.
Even when the strategy is sufficiently robust to withstand the test of time, people may continue to do what they have always done. Ask them why, and they will respond with a million good reasons. Yet invariably the root of the problem results from weak overt communication and alignment across the organization, in addition to undervaluing the power of more implicit and informal cultural interactions.
Indeed, much of the research into social organization carried out over the past twenty years points to the importance of implicit messaging embedded within group culture. Up to 80 per cent of actual performance may be directly reliant upon embedded data of one kind or another – habits, gossip, assumptions, and tacit knowledge. Conversely, less than 20 per cent will be directly attributable to explicit plans or goals – however well conveyed using various media these may be.
The lesson here has to do with the significance of culture in determining what is done as well as how it is done. Although it was not always the case, today the multifaceted nature of the communal cafe will always trump the power of cardinals in the pulpits of the corporate cathedral.
Explicit formal communication of strategic plans and goals, therefore, often has very little effect on the business performance or productivity of an enterprise. Perhaps some people are not convinced the new strategy can work and so continue to do what they have always done. Perhaps they are turned off or bored by the seemingly relentless mantra of financial and growth targets. Possibly their personal values clash with what they are being asked to do, or what the business stands for. Or perhaps they simply do not fully comprehend how a new strategy affects them in their role. In some cases they may not have heard about some significant new plan, so secretive is it. And, in a few rare cases, where there is some kind of a grudge against the enterprise, an individual might even try to sabotage the implementation of anything new or different.
Whatever the reason, results often betray the inevitability of a self-fulfilling prophecy. Managers spend indiscriminate amounts of their time attempting to get ‘buy-in’ from employees, industrial relations problems abound, and although there is a fixation on implementation, issues of responsibility and accountability never quite seem to get resolved. Arguably of more consequence, the strategic responses and initiatives intended by the leadership team remain ever only partially realized, while a critical mass of the workforce continue to do what they have always done – thus limiting pivotal change and transformation.
In this day and age, it is simply unforgivable to fall into the pitfall of orthodoxy. This is one of the reasons I pedantically redefine strategy in terms more appropriate for the volatile and uncertain conditions organizations are encountering today.
Apart from the artifact of the documented plan, together with any slide decks, strategy does not actually exist – at least not as a tangible object. It is partial and ephemeral - at best the imaginative construct of a few minds who were once in agreement for a brief moment - a symphony where the manuscript is only the starting point for a longer, more meaningful, journey.
Moreover the most brilliantly conceived and appropriate strategies can only ever be temporary. Like so many words in the management lexicon which we take for granted strategy, even in its more conventional sense, is a metaphor, a mental map that we use to help us make sense of our changing reality.
Ideally then, strategy is perhaps most aptly described as a distributed consciousness - an alignment of differing memes where understanding is both implicit and explicit. A seed that remains dormant until it is watered, and will only grow if it is cared for on a daily basis.
Effective strategy is dynamic and transparent - constantly present in the making. It is manifested in every moment of an organization’s reactions to the market, to internal circumstances, and to innumerable other unpredictable factors.
When viewed this way it makes better sense to perceive strategy not merely as a set of programmed responses to changing environmental conditions, but as a characteristic mode of thinking from which a rich repertoire of varied responses can be distilled and actioned by individuals, groups, and the community.
In this mode strategy will normally be defined by explicit intentions, such as a salient driving force and overarching ambitions, for example, while being characterized by distinct ethical or moral qualities. It uses different time frames to make sense of what appear to be unrelated patterns of events for creating intelligence and, over time, results in the distribution of context-aligned responses and initiatives throughout the enterprise. These responses and initiatives are invariably most effective when they integrate and align business and social factors.
In conclusion, contemporary strategy when suitably imagined and creatively applied is not so much a plan as a navigational literacy. It is best defined as a characteristic mode of thinking that accesses ambient intelligence to align an array of responses, patterns and initiatives across the organization in order to realize sensible, beneficial, profitable and ethical business intentions.