A Strategic Way to Enter New Era of Strategy

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Google the term “strategy” and you get hundreds of millions of hits on the topic, not to mention plenty of pithy quotes about how essential it is to business success.

In the words of Michael Porter, the essence of strategy is “choosing what not to do.” Porter, of course, also argues that a sound strategy “starts with having the right goal.” These are not just nice quotes. After all, without the right goal, an organization’s strategy is not actually strategic. And as Peter Drucker nicely stated: “There is nothing so useless as doing efficiently that which should not be done at all.”

Why am I going on about strategy when it is one of the most-taught aspects of business? Simple. Most organizations have extensive management discussions on the topic. But that’s not enough anymore.

The business world has changed and we are entering a new era for strategy. Indeed, we went from strategic planning to strategic management and now we are transitioning from strategic management to strategic prototyping.

And in the new era, strategy isn’t something to think about only when someone calls a gathering of senior executives to discuss it. It needs to be on the minds of all concerned all the time. And even that’s only a good thing if everyone across all levels of the organization shares the same view about what strategy actually means. Unfortunately, that is not always the case.

If truth be told, too many things are being labelled strategic today. As a result, the meaning of the term is often blurred in people’s minds, not to mention during planning meetings, escalating the amount of time and energy wasted by organizations. As Sun Tzu noted, “strategy without tactics is the slowest route to victory.” But confusing the two is just as bad.

The good news is, to avoid developing a non-strategic strategy, all you have to do is develop a shared understanding.

Simply put, strategy is not about how to achieve operational excellence or enhancing the marketing plan. It is what dictates how everything within an organization is put in motion by defining what you want to achieve as a business, while tactics are tools deployed to achieve the objectives identified by your strategy. In other words, strategy is about making choices and setting limits on both the demand side and supply side of the business so your limited resources can be focused on offering valued products or services in a clearly-targeted market.

To get the ball rolling in the right direction, think about addressing the following questions:

  • What does success look like for us and how does that translate into objectives?
  • What business or businesses are we in and what ones are we not in?
  • What value proposition sets us apart from our competitors?
  • What activities do we perform internally and what activities do we outsource to beat our competitors, and how do we conduct these activities differently?

After these questions are answered, of course, the job is not done.

Indeed, given that the nature of strategy is becoming more and more transient every day, strategy development is a never-ending process—one that needs to be managed and adjusted as market conditions shift and the competition landscape changes (due to technological innovations, new entrants, alternative products, etc.).

And keep in mind that one can’t manage a flexible, rapidly evolving strategy with traditional tools and linear thinking. So when the solutions needed to ensure future survival can’t be sufficiently scoped out quickly enough, managers must adopt an act-learn-adapt approach. Strategy change also often requires finding a more appropriate alternative to the existing organization structure.

Furthermore, when it comes to strategic renewal, senior management must avoid being blindsided by the confidence and complacency that often stems from strong performance. Indeed, as environments become more turbulent (more terrorism, more natural disasters, more competition from emerging market firms, etc.), competitive advantage relies more than ever before on the ability to be faster with developing/testing/validating new ideas and bringing them to market. So strategic renewal is directly tied to an organization’s ability to successfully integrate project activities into its operational activities, while keeping a watch on how full or empty the project activity pipeline is.

Finally, while management is responsible for strategy development, it is important to understand that strategy is not owned by an organization’s managers—at least not by managers alone. For a strategy to work, it must be “owned” and supported by the daily decisions and actions of all employees at all levels across an organization.

As a result, managers and supervisors need to understand how every single one of their actions and decisions will impact the organization’s ability to execute its strategy and they must make sure that every member on their team understands this as well. This is also a never-ending job. After all, when your strategy changes, understanding of it across the organization must all change or your chances of achieving the new goals will be greatly diminished.

Following the above isn’t a strategy, but it is a good tactic to help you enter the new era of strategy.

About the Author

Jean-Louis Schaan is Professor and Faculty Director of the Ivey Executive Program at Ivey Business School at Western University in London, Ontario. He can be reached at jlschaan@ivey.uwo.ca

5 responses on “A Strategic Way to Enter New Era of Strategy

  1. Rosaire M. Couturier Ph.D.

    Prof Schaan,
    This is one of the few times I reply to an article. I am a Western graduate. I am now etired after 20+years as a CEO and 10+ years as a Consultant. Like you I came to understand the dead-end strategic planning led to. I developed a different approach which I called “strategic thinking” to emphacise that it was an ongoing process. I also developped a systematic approach to use with executive teams to get the ball roling. There is a set-up period and cost before the whole organisation thinks strategically as a matter of course.

    I certainly agree with your take on the subject and I wanted to let you know. I just hope that your approach finds its way into the teaching /learning programs at the school.

    Rosaire

  2. Leigh Bailey

    Thanks Jean-Louis. Your four questions are useful thought and discussion prompts and the act/learn/adopt approach is consistent with thinking about strategy in loops vs. as a linear process.

  3. Ivan Steenkamp

    Dear Prof Schaan, how does a non profit organization develop and implement strategy? Does strategy differ per continent or industry? Is there a cultural difference on the development and implementation of strategy, e.g. African versus Western culture? Looking forward to your response. Thanks, Ivan Steenkamp.

  4. Thomas Watson, Editor IBJ

    Dear Readers,
    Jean-Louis Schaan thanks you for commenting on his article. He is offline at this time and has requested that I post the following response to the question posted by Ivan Steenkamp.
    All organizations have a strategy, which may be explicit or implicit, deliberate or built incrementally. The substance varies, reflecting the different circumstances and environments in which organizations operate as well as leadership preferences and differences in the resources and capabilities they can muster. Culture also has an impact on choices made, with differences most evident in the implementation of strategy, meaning the approaches, tools, systems and processes that managers choose (and how they apply them) to help their organization execute.
    And like leaders at any private sector company, senior management at a non-profit can be blindsided by the confidence and complacency that comes with achieving a strategy defined yesterday. So non-profits should also continually think about what success means to the organization, making adjustments as conditions (economic, environmental, political, technological, etc.) change while also ensuring everyone concerned across all levels remains on the same page. And since non-profits also operate in changing environments, strategy change at these organizations also often requires finding a more appropriate alternative to the existing organization structure.
    Thanks for reading,
    JLS

  5. James Kyeremeh

    Excellent Post. You’ve brilliantly explained the often misunderstood concept of tactics and strategy and given us the big picture – tactics wins battles – strategies win the war, as well as addressing organizational goals.

    I’ve had the opportunity of seeing first hand, from an external view the importance of corporate strategy in-line with and supported by the daily decisions and actions of all employees through the organization. When CEO’s and management have differing views, then competitive battles are lost. One needs not in looking further to cases such as Microsoft, AMD and Blackberry – with all three failing from lack of innovation, direction, optimization and efficiency.

    As a Professor and Faculty Director of Ivey’s Executive Program, does your work consider new prototype frameworks such as (Cynefin Frameworks) – simple, complicated, complex, chaotic and disorder. (Dave Snowden).

    Is it possible to use 3 or more process management tools – Six Sigma, Kaizen, Lean and TPM(leading to TQM) in a single organization cohesively, without creating elements of chaos. Are implementation costs feasible?

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