|
Searches on the Internet reveal
thousands of responses to ongoing debates regarding two key
strategy questions: 'What is strategy' and 'Does strategy matter?'
The
root is the Greek word strategos, meaning ‘a general’. (Source
note 1)
The Greek word stratego means to ‘plan the destruction of
ones enemies through effective use of resources’ or the art of a
general. (Source
note 2)
The following is one of many
alternative definitions. Strategy is:
..the
pattern or plan that integrates an organization's major goals,
policies, and actions into a cohesive whole. A well formulated
strategy helps to marshal and allocate an organization’s
resources into a unique and viable posture based on its relative
internal competences and shortcomings, anticipated changes in the
environment, and contingent moves by intelligent opponents.’ (Source
note 3)
Why
strategy matters
At best, an organization without a strategy is directionless. At worst it is
dangerous. A good strategy communicates not
just a sense of direction, but a sense of values that must
be adhered to and that ideally take precedence when conflicts over money
and values arise.
With the wrong strategy, organizations operate at best, sub-optimally and at worst, at
great risk to themselves and others (For more on this
see Seedgen's Efficiency - Effectiveness page).
Good strategies motivate and moderate
appropriate organizational behavior, ideally for the benefit of
all stakeholders.
In this type of discussion, the words 'stakeholders' and
'values' should never be discounted as just more management
jargon. Instead an understanding of what these terms mean to any
business should be at the heart of its strategy.
This is because 'stakeholders' include everybody
impacted directly or indirectly by the business; typically
suppliers, customers,
investors, employees and community members. Values impact how
stakeholders are treated. High integrity businesses attach the
highest priority to respecting the interests of all stakeholders.
A page explores the concepts of
stakeholders and values further.
A practical strategy should
ideally provide an organization with a collective sense of some
kind of ambitious, but credible and measurable long term goal that
it is striving to achieve (Its vision)
In commercial settings such
goals are often stated primarily in monetary terms. In not
for profit settings such goals are often stated in terms of
measurable changes in stakeholder opinions, lifestyles, or behaviors.
A practical strategy should also engage with an
organization's stakeholders to generate
understanding and ideally approval, of both the reason for
business' existence and its core social values (Its mission). A
dynamic strategy should then help an organization develop a deeper understanding of itself.
If this seems a bit odd, remember that an organization comprises
multiple, sometimes thousands of individuals.
Strategies should be 'alive',
rather than simply set out on a piece of paper, in that they
should both adapt to changes in the environment and the organization
over time. A strategy should also ideally be
understood, 'owned' and applied by everybody within an organization
and not just seen as the preserve of senior
management.
Knowledge of a wider organization's
strategy; its evolving
strengths and weaknesses (Internal Factors) and its opportunities
and threats (External Factors) empowers. Armed
with such knowledge, employees are able to identify relevant
'actionable information' and then to act autonomously upon this in
the wider organization's interest.
Strategy
versus tactics
A simplistic view is that
strategy sets direction, whilst tactics are the efforts and
ingenuity employed to overcome the obstacles in the path of the
set direction. However there may be times when either obstacles
that are too big, or alternative directions that look much
better, are discovered. A strategy should therefore never be unchangeable.
From a definitional
standpoint, the terms 'strategic' and 'tactical' could be said to
exist toward either end of a continuum of meaning, stretching from
'Profound' at one end, to 'Irrelevant' at the other.
In this sense, decisions
impacting organizations that may stretch beyond strategic, to be
described as 'profound' include those that involve the creation,
destruction and trading of organizations. Public policy can be
profound, so can the work of a corporate raider. In both cases,
outcomes can be either profoundly good, or bad.
In the other direction, beyond
tactical are the minutiae of everyday organizational life that has
zero impact on the efficient or effective deployment of assets.
Whereas who to award the coffee contract to and when to allow
coffee breaks are ultimately tactical decisions, as they impact
the employment of assets, the color of the vending machine would
generally be regarded as irrelevant.
Note that for a firm of
interior designers, even the color and make of such a machine, could be seen as strategic if they take its styling cues (Say, for
example, from a chrome and steel Gaggia model) as the basis for
agreeing their shared vision of the type of client they wish to
target.
In terms of application,
'Strategy' is best described at two levels.
At an individual or closed group
level, such as a management team, a strategy can be a collective understanding of what these people want to achieve by when,
along with an appreciation of some key milestone achievements they
will strive for, en route to the ultimate vision.
At a wider level, strategy
is better described as a high-order, learning and response
mechanism that drives an organization to develop itself, as best as possible, towards visions of what various
outcomes should be like at fixed points in the future, whilst
acknowledging: values; strengths; weaknesses; opportunities and
threats.
Do businesses really operate
cohesive strategies?
This wider definition is
similar to the notion of strategy being seen as, 'A set of
simple guiding principles that permeate and shape the behavior of
the organization' as often described by others, but
presents strategy as more complex and less accessible. This is
because real-world organizations are complex and, even though some
employees may appear clone-like, humans are humans and uniformly
perceived and applied strategies are more myth than reality.
Truly cohesive strategies where
everybody within an organization is pulling in exactly the same
direction are rare, except in very small, very dictatorial,
single-crisis-focused and exceptionally managed settings.
Source
notes - click on them to get back to relevant text
1. From: Lindren M. and Bandhold H. (2003) Scenario
Planning: the link between future and strategy. Palgrave
Macmillan. ISBN 0-333-99317-9
2. From:
Bracker J. (1980) The historical development of strategic
management concept. in Academy of Management Review 5: 219-24,
cited in Lindgen and Bandhold (above)
3. Quinn J.B.
(1995) Strategies for Change. In Mitzberg et. al. The Strategy
Process. Prentice Hall., cited in Lindren and Bandhold (above)
|
