Economical
Sciencies/6. Marketing and Management
B. Poperechnyy
National University of Food Technology
Nonprofit management
Take a moment and read these
two words: strategic plan. Now close your eyes and picture one. If what comes
up is a thick binder, gathering dust on a shelf next to other thick binders
from five and ten years past, you’re not alone. A better understanding of the
history of strategy and what caused the demise of binder-bound strategic
planning can point the way to re-inventing strategy for the world we live in
today. It is important to remember that strategy’s roots are military. Military
strategy focuses on setting objectives, collecting intelligence, and then using
that intelligence to make informed decisions about how to achieve your objectives—take
that hill, cut this supply line.
Historically, the battlefield
was a place where you could count on a few constants:
§
The past was a good predictor of the future. There were years or decades
between meaningful shifts in the basic variables, such as the power of a
soldier’s weapons or the range of aircraft.
§
Good data was scarce and hard to come by. Scouts and spies had to risk
their lives to find and relay information, and had to be ever on the lookout
for enemy deception.
§
Lines of communication were unreliable at best. Small numbers of clear
directives were a tactical imperative.
Not surprisingly, after a couple of millennia,
military strategy became well adapted to these constraints.
After World War II, when
military strategy came into the business world as strategic planning, so did
these constraints. As a result, strategic planners focused on predicting the
future based on historic trend lines; invested heavily in gathering all
available data; and produced a small number of directives issued from the top,
for the rest of the organization to execute.
This approach to strategic
planning was a reasonably good fit for much of the business world from the
fifties through the eighties. But with the rise of high-tech tools and
increased globalization in the nineties, the world began to change, and now it
looks quite different indeed. The future is no longer reasonably predictable
based on the past—in fact, it is liable to be startlingly different. Good data
is easy to access and cheap to acquire. Communication is rapid, indiscriminate,
and constant.
The world has become a more
turbulent place, where anyone with a new idea can put it into action before you
can say “startup” and launch widespread movements with a single Tweet. This has
left organizational leaders with a real problem, since the trusted, traditional
approach to strategic planning is based on assumptions that no longer hold. The
static strategic plan is dead.
This has led to increasingly
polarized attitudes about the value of having a strategy at all. Some leaders
are valiantly trying to save strategic planning by urging us to focus even more
on rigorous data analysis. Others deny the value of strategy, arguing that
organizations need agility above all else (an attitude that famed strategist Roger Martin reports
hearing with increasing frequency).
What is necessary today is a
strategy that breaks free of static plans to be adaptive and directive, that
emphasizes learning and control, and that reclaims the value of strategic
thinking for the world that now surrounds us. This point was acknowledged at
the Skoll World Forum in 2010 when it was said: “Every model is wrong and every
strategy is wrong. Strategy in a way helps you learn what is ‘righter’. People
think you can prove a strategy in advance. You can’t.”
The approach which developed
in working with clients at Monitor Institute is what is called adaptive strategy. Some companies
create a roadmap of the terrain that lies before an organization and develop a
set of navigational tools, realizing that there will be many different options
for reaching the destination. If necessary, the destination itself may shift
based on what they learn along the way.
Creating strategies that are
truly adaptive requires that you give up on many long-held assumptions. As the
complexity of our physical and social systems make the world more
unpredictable, you have to abandon your focus on predictions and shift into
rapid prototyping and experimentation so that you may learn quickly about what
actually works. With data now ubiquitous, you have to give up our claim to
expertise in data collection and move into pattern recognition so that you know
what data is worth our attention. You also must know that simple directives
from the top are frequently neither necessary nor helpful. It was instead find
ways to delegate authority, get information directly from the front lines, and
make decisions based on a real-time understanding of what’s happening on the
ground. Instead of the old approach of “making a plan and sticking to it,”
which led to centralized strategic planning around fixed time horizons, must
believe in “setting a direction and testing to it,” treating the whole
organization as a team that is experimenting its way to success.
This approach wouldn’t
surprise anyone in the world of current military strategy. Recent generations
of military thinkers have long since moved beyond the traditional approach,
most notably famed fighter pilot John Boyd. He saw strategy as a continuous mental
loop that ran from observe to orient to decide and finally to act,
returning immediately to further observation. By adopting his mindset (with a
particular emphasis on the two O’s, given our turbulent context), it can get
much better at making strategy a self-correcting series of intentional
experiments.
To provide structure to this fluid approach,
everybody must focus on answering a series of four interrelated questions about
the organization’s strategic direction: what vision you want to pursue, how you
will make a difference, how you will succeed, and what capabilities it will
take to get there.
Literature:
1.
Social Innovations in a Post Crisis World // http://www.weforum.org/pdf/schwabfound/INNOVATIONS-Davos-2009_Dees.pdf
2. Wendel Clark, Problems with Strategic Planning and Management // EHow Money [Electronic resource].
– Access mode: http://www.ehow.com/info_7934944_problems-strategic-planning-management.html