This is the second post in a series – start here.
Definition of Strategy (as a skill or activity):
Strategy is the dynamic process of making big-picture plans (strategies) with the intention of increasing the chances or speed at which you’ll achieve your major goals.
Strategy in a changing world
Because strategies are made and executed in a changing world using imperfect and incomplete information, any strategy is necessarily imperfect, and even the best strategy must be subject to revision in order to remain relevant.
A strategy might need to be changed in response to:
Changes in the world outside (the strategic context)
These are changes that take place outside your organisation that may render your strategy less effective or entirely ineffective, or may open up new strategic possibilities:
- Changes in the preferences and behaviour of users or customers
- Changes in the general availability of key resources (funding, raw materials, information, people and other inputs)
- Changes in technology (tools) available may make new things possible or render old strategies ineffective (this is a variation on “key resources”)
- Changes in what competitors do may require you to respond
- Changes to many of these at once – as when trying to apply a strategy that’s worked in one place or organisation in different one.
Changes in internal resources or capacity
Strategy may also need to be adapted when the resources inside the organisation change – perhaps as a result of a successfully executing a good strategy, or of failing to do so. For example:
- Changes in personnel
- Changes in financial resources
- Changes in skills and expertise available
- Changes in information – new knowledge internal to the organisation about internal or external matters may open up new possibilities or suggest the need for adjustments to strategic plans.
When strategy must change
All of the above demand that strategy should be reviewed, but none of them necessarily require that it be changed. The only time a strategic plan must be changed is when it has been proven to be flawed.
Strategy as a dynamic process
Which brings us to understanding strategy as a dynamic process: rather than thinking of strategy as something that is created once-and-for-all then implemented (“this is our strategy”), strategy should be understood as a mix of theory-and-plan that is necessarily contingent and iterative* : “This is our current strategy.” Adaptability (in tension with the need for stability) is key, although as we’ll see tomorrow, higher-level strategy should change more slowly than low-level strategy.
Key steps in the strategic process
The elements of strategy (as strategic process) are:
- Information gathering with regard to: the effectiveness of the current strategy; the external context; internal capacities; knowledge about strategy**;
- Evaluation and analysis (filtering and sorting information and drawing conclusions);
- Decision making and prioritisation (making a strategic plan);
- Communication of strategy;
- Delegation of execution;
- Monitoring context and results (leading back to Information Gathering).
The fundamental resources of the strategic process are:
- People with the relevant expertise to run the strategic process, and who have the will and authority to do it;
- Regular time for strategy to ensure that strategy remains dynamic and relevant;
- The people (possibly the same people as above) and resources necessary to execute the strategic plan.
*See Build, measure, learn
**That is, strategy as process should include ongoing learning about how to do strategy well (meta-strategy***)
***This series is an example of meta-strategy