Thinking differently about strategy Part 1
There are many approaches to strategy development and strategic planning. In ‘Strategy Safari’, Mintzberg characterises 10 different schools of strategy, the source for each school, and the discipline on which they are based. What’s fascinating is how many of these have their roots in the very stable economic period of the 1950s or 60s, with a few rather later in the 1980s or 90s. What’s also interesting is how many of these schools of strategy – on which so many strategies have been based – are defined by Mintzberg as having no underpinning base discipline.
Those schools of strategy, developed for the prevailing business conditions, are still in use, yet the complexities of business and organisational life today render many of them impractical, as they require a stability and a length of planning horizon that simply aren’t present any more. This isn’t just a theoretical view point: there is plenty of research and surveys which suggest that around 70% of strategies are not implemented, with some offering a figure of more than 90%. This suggests that some new ways of addressing strategy development are badly needed, to dramatically shift that 70% figure, and provide strategy development approaches which are fit for purpose in today’s environment.
We believe there is a different way of thinking about organisational strategy which is more effective in the fast-moving and disruptive ecosystems that all organisations sit within today. A different principle base, if you will. Our practical experience shows that looking differently at an organisation and its environment, or more accurately thinking differently about an organisation in its environment, yields important insights to strategists which aren’t available from other strategy approaches. A set of different ways of thinking provides different ways to notice problems and opportunities because of how it illuminates the organisation’s reality.
For us the story started over twenty years ago during a massive upheaval in supply chains in the UK automotive industry, and a client project that had a strategic dimension for an automotive sub-components company bashing out parts for car and truck makers. What became really clear was that their strategic direction was not a function of any plan, but of the strategic relationships that they were locked into. Literally locked in, the tightness of their coupling to prime manufacturers was dragging them in a direction that dictated how they would work, invest, even think, demonstrating total commitment to the prime manufacturer. The relationships had their own momentum that dictated pretty much everything. and they were getting tighter and tighter. One critical observation was that none of the prevalent strategy tools was of any real relevance.
This was no isolated incident. Once we’d got our eye in, we could spot the same sort of phenomenon everywhere we looked, of key strategic relationships driving the strategic direction, across every industry we worked in, in every country, and in organisations large and small. Relationships, the nature of the strategic fit between the organisation and other players in its environment, really matter and these relationships have their own direction and momentum and largely carry organisations along. And if you think about it like that, then suddenly of course the reported failure rate of conventional strategy starts to make sense. If the strategic fit and imperative of relationships is driving strategic direction, then is it any surprise if conventional planning fails quite so often?
In the next post we’ll look at some of those different ways of thinking differently.