A Fresh Look at Organizational Strategy

As I mentioned in the last article an understanding of the triadic nature of things offers much; however, in order to garner the most from this understanding, a three-tiered balanced perspective must be combined with a future-oriented perspective. This perspective must incorporate more than traditional strategy and planning as the external environment changes too quickly for strategy alone to keep up. Traditional strategy cannot keep up because, somewhat ironically perhaps, much of the early literature discussing strategy, around 1960 to the mid-1980s, dealt with planning aspects as opposed to defining how to strategize. This is not to suggest that thinking was not a part of the planning concepts brought forth. It was, however, based on a different kind of thinking, that of linear models and stable environments.

This is to be expected as the primary source of strategic planning, at least early in its development, came from military. Sun Tzu and Clausewitz provided an understanding of what it is to be a strategist and to use strategy. It worked for many years. Of course, things have changed, and while we can still learn much from the military perspective, one thing is clear: wars do end and, therefore, are planned in that fashion. Interpreting old planning processes of the past makes strategy look somewhat easy, but this rests on a mistaken assumption that planning has something to do with strategy making. Of course, strategy appears easy when the planning process narrowly limits the scope of discovery, the breadth of involvement, and the amount of intellectual effort extended, and the goal is something far short of revolution.[1] Planning with a known end is like reading the last chapter of a crime novel before starting chapter 1. Of course, we see all the clues and warning signals. How could we not?

Those that currently plan and strategize in our organizations are not seeking an end to something. Rather, the idea of planning is now just the opposite: seeking sustained competitive advantage, growth, and a thriving entity in the global environment. The idea that an organization can find one best solution to the complex multilayered problems of today is folly, yet organizations still attempt to find that one perfect strategy to set them apart from their competition. There are two problems with this approach. The first is that the search for perfection is prescriptive in nature and does not allow for the inevitable changes that occur in the global environment and the stakeholders therein. Second, most efforts at strategy revert to the linear either-or debate: cost leadership vs. differentiation, explore vs. exploit, and even global vs. regional. The primary issue with this approach is not that the strategy cannot work. In fact, it may work superbly; but most likely only for a short time before the organization is forced to explore yet another strategy, most likely the opposite one chosen just a short time ago. In these scenarios, the growth of global markets is either too dynamic to provide superior industry position, or the competition is too intense for an organizational resource to provide anything more than a temporary advantage.[2] Therefore, benefits gained through traditional sources of advantage such as speed to market are being eroded; thus, firms must find alternative ways of competing in international business.[3]

But what are these alternative ways? It all has to do with replication. How easy is it for one organization to copy whatever it is another organization considers their competitive advantage to be? One thing is clear, attempting to rationally plan in often chaotic and irrational environments is a contradiction[4] and cannot be achieved. Organizational leaders must be comfortable with the fact that things happen. The world changes often in very disruptive ways—a CEO retires; a disruptive technology is created; a new competitor enters the market, making the current strategy irrelevant; or the company receives a bad set of quarterly returns.[5] So how does an organization cope?  

Organizations and the people that lead them will not survive if they continue to rely on over simplistic notions of strategy as being the preserve of a single elite group of individuals.[6] The alternative is not to rely on formal prescriptive systems to develop and implement strategy but rather to develop an integrated approach that will increase the organization’s chance of success.  More on what that might look like next time.

[1]. Hamel, Gary. Leading the revolution: How to thrive in turbulent times by making innovation a way of life. Boston: Harvard Business School Press, 2002.

[2]. Cooper, R. “When lean organizations collide.” Harvard Business School Press, Boston, MA (1995).

[3] Massingham, Peter. “Linking business level strategy with activities and knowledge resources.” Journal of Knowledge Management 8, no. 6 (2004): 50–62.

[4] McCullagh, Kevin. “Strategy for the real world.” Design Management Review 17, no. 4 (2006): 48–55.

[5] McCullagh, K. (2006).

[6] Clark, Timothy. Controversies and Continuities in Management Studies: Essays in Honour of Karen Legge. Blackwell Publishing, 2004.