It’s Time To Take Strategy Out of The Box

by Jay Deragon on 07/22/2013

strategy

I love to study strategy as well as to help organizations define and execute strategies whether they are incremental improvements or blue ocean leap frog initiatives. I simply love strategic thinking and related practices and have been studying them for most of my adult life. Then after doing it for too many years I discovered, and observed, that strategic thinking has been in a box and the related practices  are no longer relevant for today’s marketplace dynamics. Let me explain.

During the 20th century the practice of strategy evolved through several phases including basic financial planning, long range planning, strategic planning, strategic management and complex systems strategy. With each phase new tools and advanced analytics created an obsession with measuring and analyzing everything with the aim of finding SWOT’s which provided insights into competitive advantages that enabled squeezing more out of people and processes. Advantages were considered in terms of products, territory, size, market share, price, quality, and service and customer satisfaction.

As the 21st century begins it is clear that we have entered an Age of Disruption. Entire economies are being disrupted. Markets are being changed by technological shifts that appear without warning and disrupt old business models with established players loosing billions of dollars in commerce to new players. Markets are shifting faster than suppliers can change.

Countries, states and cities are declaring or on the verge of bankruptcy (Spain, California, Detroit to name a few). Corporations are being challenged to become more eco-friendly, more transparent and accountable to the wishes of all stakeholders not just the few stockholders. Business as usual is not even close to market realities so strategic development, as we’ve known it, no longer fits into its nice orderly box of steps, tools and thoughts. When everything, including the economy, is in disorder old strategic theories do not apply.

In the Age of Disruption purpose trumps strategy as the only guide needed for a map of social value creation for an emerging future.

Don’t Put “Social” Strategies Back In the Old Box

The Age of Disruption is being fueled by an informed, connected and empowered human network expecting a better future than the previous results produced from old patterns of thinking. The strategies of the past aimed at optimizing people, processes, products and the planet for financial return. Poor stewardship of the planet, the people and the financial system created results for the few at the cost of the many.  Simply put the strategies produced the wrong results for the wrong reasons because they were grounded in the wrong purposes.

As more and more businesses rush to leverage social technology for strategic advantages they are being misguided by most of today’s strategic consultants.  Many of the popular consulting firms are publishing articles outlining steps for a successful Social Business Strategy. I’ve read them all and they are all out of the playbook of strategic management practices of the 20th century.

The purpose of strategy for the 21st century needs to change as does its context and construct for organizations.  The box it came in doesn’t fit today’s reality and social is a philosophy more than it is a tool to extend old strategic realities in the age of disruption.

A social strategy is really more about learning and embracing new realities that disrupt the purpose of old strategies. 

 

{ 3 comments }

Andrew Lloyde July 23, 2013 at 6:37 pm

Strategy is about choices. The organisation must choose the direction it wishes to take, what it wants to be remembered for and what success, for them, looks like. I would be surpirsed if most organisations these days do not want to be seen as good corporate citizens as this is just good business sense.

You don’t simply develop a strategy and blindly go forth to deliver said strategy. It is only as good as the information you have available at a point in time and you must be regularly and systematically, searching for those things – lets call them ‘disruptions’ – that may impact your strategy in a negative manner. The world has been constantly changing for centuries and will not stop now. It may appear faster however this is only as a result of the improvements in communications, technology and ever increasing customer expectations.

Do some scenario planning around your strategy but be out there with your scenarios. Don’t just think small, think disruptive!!

Aron Hausler July 23, 2013 at 2:25 am

Hi – I agree that some of the more traditional types of linear / evidence-based strategy development approaches are less reliable in disruptive markets. i.e. there may be very little data (historic or otherwise) to draw on in developing the as-is and to-be state(s) and resultant approaches.

However, strategy is still fundamentally about making choices. And those choices have impacts. There is still room for those impacts to be a determinate in the choices being made (eg environmental impact) – i.e. a more systemic view.

I reckon our techniques and approaches need to evolve, but I’m not sure I’d throw strategy thinking or strategies out with the bathwater just yet.

Cheers

Paul Klausmann July 22, 2013 at 8:25 am

Jay,
do you really believe what you write ?
Paul

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