How to fix the misunderstandings of strategy

Every company, government and investor has a strategy. Every organisation will have hundreds of strategies, but many of these guiding documents are not strategies. Instead, they are tactical roadmaps that do not have a vision or destination.

Strategy is a high-level, long-term plan designed to help an organisation achieve specific objectives and goals by leveraging resources, identifying opportunities, and navigating risks. McKinsey describes strategy as a dynamic process that involves aligning resources, understanding industry dynamics, and making deliberate choices on where to compete and how to create long-term value. Their definition emphasises issue orientation, external planning, and strategic management, where strategy is important and integrated into daily and tactical operations. In essence, it is having and never forgetting the vision and the destination.

All this seems simple enough, but in my 25 years to date, I have far too often come across strategies that are more tactical than strategic and have been written without a strategic vision or focus on the outcome, the opportunity that needs to be captured and delivered.

Whether it’s for a company or a nation, a strategy only delivers if there is strategic vision and oversight in place and if there is culture or collaboration that gets a machine to work for each other. Create a strategy without a culture of collaboration, and you are at greater risk of failure.

According to research published by McKinsey, 70 percent of executives surveyed did not like their company’s strategy process and 70 percent of board members didn’t trust the results of that process .

Strategic plans developed at lower organisational levels are overly focused on short-term operational objectives rather than articulating a coherent and differentiated pathway to achieve long-term aspirations.

A genuine strategy is not simply a tactical roadmap but an integrated framework that positions the long-term objective as the destination and provides a structured approach to navigate uncertainties to that destination. When strategies are developed at an operational level without alignment with overarching organisational goals, it results in fragmented efforts, suboptimal performance, and a widening gap between aspiration and execution. Furthermore, this lack of cohesion can create organisational silos, impede cross-functional collaboration, and ultimately weaken the competitive positioning of an organisation in its market.

The Consequences of Misguided Strategies

The disconnect between strategy formulation and execution often stems from the failure to incorporate meaningful and detailed data and varied behavioural insights into the external environment or an understanding of fundamental growth drivers. The outcome is a proliferation of activity with minimal advancement towards significant organisational goals. This affects the organisation's ability to compete effectively and leads to wasted resources and missed opportunities for innovation.

Moreover, when strategies are not genuinely strategic, they lack the depth required to address the complexities of the external environment.

Whether you are in business or political strategy or reputational development, in today's global and hyper-connected environment, characterised by rapid technological change, shifting geopolitical dynamics, and evolving consumer preferences, methods must be robust enough to anticipate and respond to these challenges. These require people with a strategic vision who can drive an organisation forward towards the set goal in a proactive manner. If you are reacting, then you are following.

This issue is particularly pronounced in the public sector, where government initiatives labelled as 'strategic' frequently lack the foresight necessary to deliver sustained societal impact, instead prioritising short-term political gains.

A report from the Institute for Government in 2022 found that many public policies are inherently reactive, addressing immediate crises rather than fostering a proactive strategic stance that could secure future national competitiveness. This reactive approach often results in disjointed policies that fail to address the root causes of systemic issues, thereby limiting their long-term effectiveness and societal benefits.

How To Develop a Strategy that Delivers Growth

To realise genuine value and growth, whether in the public or private sector, strategies must be developed with foresight, coherence, and active engagement across the highest levels of leadership. These must be agile and include an investment in establishing the right culture and a collaborative approach to delivering growth.

Below are some best practice guidelines for crafting a truly strategic approach:

Start with a Clear Vision

Establish a compelling vision that articulates what long-term success looks like. Be ambitious and make sure that your vision for the future is your and your team’s guiding star. What does success look like, and what do you need, internally and externally, to realise your vision and strategy?

Research by Harvard Business Review asserts that organisations with a clear vision outperform their competitors by 20%.

A well-defined vision also provides a sense of purpose, motivating employees and stakeholders to align their efforts with the broader organisational goals.

Engage Senior Leadership Early

Strategy development must be led by senior leadership and experts who possess a holistic over-the-horizon understanding of not just the organisation but, more importantly, the ecosystem it sits in and its external context.

Engaging these leaders from the outset - not merely for endorsement - ensures strategic alignment, ownership, and the cultivation of a unified organisational direction.

Senior leaders play a critical role in setting the tone for strategic initiatives, fostering a culture of accountability, and ensuring that vision and strategic priorities are communicated effectively across the organisation.

Employ Data and Foresight to Identify Key Drivers

The development of a strategy, whether for a new business, a reputation, service or product, or a country’s industrial strategy, should be grounded in a rigorous analysis of the external environment, market dynamics, and emerging trends.

Utilising data-driven insights allows organisations to identify key drivers of change, anticipate market shifts, and make informed decisions that position them for long-term success. Foresight tools like trend analysis and scenario planning can also help organisations navigate uncertainty and build resilience against potential disruptions.

Never underinvest in research and insight gathering.

Your data and insight can also help in how you engage with your internal and external stakeholders to ensure that you are all working together to realise the value of the strategic vision.

Stakeholder Mapping and Engagement

Stakeholder mapping and engagement are critical components in developing any strategy because your stakeholders can help you achieve your vision.

It is critical to understand every stakeholder and current or prospective partner, their likes and dislikes, what influences their business development, who their leadership is and the aims they wish to secure.

Understanding who the key influencers, decision-makers, and potential partners are - and the interests they represent - ensures that strategies are aligned with broader economic, political, and social contexts.

Effective stakeholder engagement fosters collaboration, builds trust, and mitigates risks by addressing concerns early on. It also allows for co-creating value and shared objectives, essential for gaining support, securing investment, and driving sustainable growth.

Ultimately, strategies that actively engage stakeholders are more resilient, better informed, and positioned for long-term success.

Prioritise Flexibility and Adaptability

In an era of rapid change, rigid strategies are prone to obsolescence. Flexibility must be embedded into any strategy and strategic framework, allowing organisations to pivot effectively in response to emerging opportunities or threats.

Scenario planning is a critical tool that supports strategic adaptability and resilience. By considering multiple possible futures, organisations can develop contingency plans that enable them to respond swiftly and effectively to unforeseen challenges, competitors or changing political or economic situations.

This adaptability is particularly important in industries characterised by high innovation and disruption, where the ability to pivot can be the difference between success and failure.

Bridge the Gap Between Strategy and Execution

Strategies must translate into actionable initiatives at all levels of the organisation. Each action and tactic must be measured against the journey towards achieving the vision.

Establishing clear performance metrics and ensuring alignment between strategic objectives and operational activities are essential.

Effective execution requires clear communication of strategic goals and the empowerment of teams to take ownership of their roles in achieving these goals. This involves aligning incentives, providing the necessary resources, and fostering a culture of continuous improvement.

Engage and Communicate with Stakeholders

Effective strategy cannot be developed in isolation; it must be a collaborative process. Successful strategies involve a dialogue, tactical or strategic, public or private, with internal and external stakeholders, fostering mutual understanding, commitment, and trust.

Engaging investors, partners, employees, and customers during the planning process provides valuable insights that enhance strategic relevance and viability.

Transparent communication is also critical for building credibility and securing buy-in from stakeholders. When stakeholders understand the strategic rationale and see their interests reflected in the plan, they are more likely to support and actively contribute to its success.

The journey towards a vision is a story that needs to be carefully managed to ensure that your partners, stakeholders and colleagues know the value they will generate, deliver and gain from. In this journey, there is risk, which, from a human perspective, needs to be understood and mitigated.

Strategic communications counsel needs to work alongside leadership in order to steer the organisation towards the identified opportunities and success.

Conclusion

What’s important to consider is the distinction between authentic strategy and operational-level tactics, which is critical for any organisation’s success.

Without the active engagement of senior leadership or a sophisticated understanding of market dynamics, strategies formulated at lower hierarchical levels are often at risk of holding an organisation back from growth.

To realise opportunities and sustainable value, public or private organisations must re-evaluate their strategic development approach. This involves articulating a long-term vision, involving the right leadership, leveraging data-driven insights, identifying and engaging with partners and stakeholders, maintaining adaptability, and aligning efforts across all levels towards shared objectives.

The strategic development process must be iterative, reflective and agile, allowing organisations to learn from past experiences and refine their approach over time.

Integrating feedback loops and regular strategic reviews ensures the strategy remains relevant and responsive to changing conditions.

In this way, strategic success becomes not merely a buzzword academic exercise in planning but a deliberate and disciplined effort to ensure that every action undertaken supports the broader journey towards resilience, growth, and sustained leadership amidst a current ever-uncertain global landscape.

Strategic excellence is more than achieving short-term wins; it is about positioning the organisation or country to thrive over the long term, navigating complexities with agility, and continuously aligning actions with the overarching vision.

By embracing a strategic approach, organisations can transform challenges into opportunities, foster innovation, and build a foundation for enduring success.

*This post was originally published on my blog: www.twofourseven.co.uk/blog/8/10/2024/how-to-fix-the-misunderstandings-of-strategy