What happened to strategy
In the 1980s most large corporations kept strategy groups of fifty or more talented people who reported close to the CEO. By the early 1990s they had mostly gone. They were expensive, mergers and cost-cutting made them an easy saving, and some of their forecasts were unwelcome. Climate change was one example. Management consultancies then offered ready-made frameworks and took over the work. Senior managers lost the habit of doing strategy themselves, and the shocks since then (2001, 2008, 2015, the pandemic) have found many companies unprepared.
Strategy is not planning
Planning asks what we will do, with what resources, to hit which target. Strategy asks what we are assuming, what happens if we are wrong, and whether we are still solving the right problem. Planning looks for certainty and strategy looks for understanding. A company can execute very well and still be heading the wrong way. Systems thinkers add that strategy starts outside the organization: what environment are we in, how is it moving, and only then, where do we sit in it?
Vision comes first
Without a long-term aim there is nothing for a strategy to serve. A good vision is short and clear enough to remember. The strategy beneath it should change as conditions and results change, while the vision stays put. Many organizations have strategies but no clear mission, and that is a large part of why their strategies drift.
Silos and thin teams
Functions often write their own strategies, and nobody checks whether they fit together or fit the vision. A city can plan car parks on its edge for commuters and forget that most of them now drive electric cars that need charging points. Corporate strategy teams can be three people working from a narrow view and never consulting engineering about cost. Military planning, by contrast, puts logistics, communications, artillery and the other services in the same room. People in procurement and supply chain see the outside world earlier than most and are rarely invited.
Short-term pressure and borrowed accountability
Leadership attention has narrowed to today, which makes longer-range thinking hard to justify inside a function. Hiring consultants and lawyers to set strategy also protects the people who commission it, since responsibility moves elsewhere. In the army a failed strategy costs lives. In a company, nobody pays much when it fails.
Scenarios and contingencies
Scenario planning is about 50 years old and little used. A pharmaceutical company that expected generics to arrive slowly watched a billion-dollar product collapse within months. A dialysis manufacturer never asked what would happen if dialysis became unnecessary. Armed forces keep contingency plans for likely trouble spots and review them every few months against current capability.
One scenario method builds a matrix from two independent uncertainties, which produces four different futures. These are written as vivid pictures that anyone can follow, not as probabilities or return-on-investment tables. The strategy is then tested against each one and should at least survive in all of them. Done properly it takes three or four days.
Signals and curiosity
Strategy depends on noticing weak signals that the world is changing, and on being willing to question accepted wisdom. That needs curiosity, which organisations ask for but seldom protect, because curiosity takes time and produces awkward questions.
Conversation and execution
One strategy program at a large company worked because the CEO sponsored open conversation, ran it without laptops, and sent the team round the world to talk to customers and engineers. Its output was still in use twenty years later. It faded when the CEO changed, and the execution phase passed to people who had not been in the discussions, who watered down the disruptive parts.
Strategy has to be explained in plain words, with the reasons given, and tied to each person’s goals and reviews. Leaders cannot hand it to consultants and expect it to arrive on its own.
The main point
Management, process and execution matter, but they are not strategy. Strategy is the organization’s capacity to understand change, test its assumptions and decide whether it is still fit for purpose. It is a continuing conversation with reality and cannot be done once and filed.
