STRATEGY: WHAT IT IS, AND WHY YOU SHOULD BE DOING IT

It’s the beginning of 2007 – 13 years ago, just before the global financial crisis hit – and I just got back from the doctor. Over the past months, I had been stuck in strategic planning meetings with the rest of the strategy and management team. Our ambitious approach, turning every stone, had lead to many long days in meetings and by the computer. On the way, I had obviously developed Olecranon Bursitis or so-called ‘student’s elbow’. That is a painful condition characterized by redness and swelling around the tip of the elbow (olecranon), caused by inflammation of the elbow’s bursa. The bursa is obviously small fluid sack helping to reduce friction between the bones and allows free movement. The condition can, as in my case, be caused by repeated leaning on the point of the elbow on a hard surface. And I can tell you that it hurts. Also, the doctor actually told me to find a different way of doing strategy.

If you work on a senior level in a larger company, you have probably been caught up in, or led, quite a few time consuming and sometimes even painful strategic planning processes. You are not alone. Bain & Company’s bi-yearly Management Tools & Trends survey shows that strategic planning is ranked as one of the most popular and used tools by business leaders across the globe. Unfortunately, other studies show that only 14 percent of employees understand their company’s strategic direction.

For many reasons, scholars and practitioners have questioned the benefits of strategic planning the way it’s been practiced over the last decades. Since the lows of the last recession, it even seems like the winds of change have been blowing away from strategy into the wilds of increasing agility. Maybe that’s not so strange.

Most people think of strategy as strategic planning, and as an important, time-consuming task, sometimes so complex and daunting that it is outsourced to large consultancy firms with hoards of strategy specialists. With a detailed strategic plan, organizations then hope to reach their long term goals and financial plans successfully.

The strategic plan coming out from the intense strategy workshops of 2007 was indeed rather immediately hit by the recession, and the initiatives very quickly became irrelevant in spite of the most rigorous preparations. A development, that we just like most other companies in those days, hadn’t predicted. We, however, didn’t give up on our vision and overall direction and managed to navigate the turbulent environments fairly well after all. Since then, the company strategy has been refined and adjusted many times, and is both alive and well, and actually very successful.

The world hasn’t become more predictable though. On the contrary. The world seems to be changing faster and faster. Technical development, digitalization, and disruptive forces are today all over the place, and the world is being Uberized, cutting out middlemen, and creating new value chains at a high speed. On a macro level, several global megatrends can already be seen in motion, such as the unfolding of the digital society, the aging population, urbanization, and an increased need for and focus on sustainability. Also, the fact that less than half of all strategies seemingly succeed to reach their goals can seem discouraging to most people. Is strategy even relevant any more?

Where does this leave you as a leader aspiring to run a successful business? Will you simply just tell your board of directors that strategy is not relevant and that you won’t be doing it anymore?

WHAT IS STRATEGY?

Oxford Dictionaries define strategy as ”a plan of action designed to achieve a long-term or overall aim: time to develop a coherent economic strategy” or as ” the art of planning and directing overall military operations and movements in a war or battle.”

Merriam-Webster’s short definition of strategy is: ”a careful plan or method for achieving a particular goal usually over a long period of time”, or ”the skill of making or carrying out plans to achieve a goal.”

My experience is also that most managers think of strategy as a strategic plan. A strategic plan normally has three different parts: a vision and mission statement, a list of initiatives and conversion of those initiatives into financials, typically supported by detailed spreadsheets, and very often capturing a period of three years.

But is a strategic plan really the same as a strategy?

Strategy of today is often thought of as a collection of frameworks, models, and tools for analysis, structured thinking, and long term business planning. Asking a management strategist to define strategy is however said to be like asking a philosopher to define the truth. Some even claim that nobody really knows what strategy is. At least as to the Economist...

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