Do we need to reclaim ‘strategy’?
There was a very interesting article in yesterday’s Globe and Mail that essentially suggests that the words ‘strategy’ and ‘strategic’ are overused, hype-filled and meaningless buzzwords. Not the only ones mind you, but these seemed to come up for particular vitriol. In today’s modern business usage, it would seem that ‘strategic’ is pretty much synonymous with ‘senior’ and interchangeable as a concept.
Elsewhere in the article, an ‘MBA consultant’ (and I’m not entirely sure what one of those are—a consultant to MBAs? a consultant on getting an MBA? a consultant with an MBA?) suggested that any time a company says they are “changing their strategic direction” it is in their opinion the death knell for that particular enterprise.
Sweeping statements, both of them. The question is, are either of them supportable?
I certainly get where the critique around the word ‘strategy’, and the largely criticism of buzzwords implied in the article, come from. As a society, we are increasingly imprecise in our use of language. Strategy, in particular, is a word that we are imprecise about. It is used to reflect problems that are ‘big and complex’. Or issues that are ‘conceptual’. We say “that’s a strategic problem” when we want to kick the metaphorical can further down the road without actually solving it. The term ‘strategic’ is often the label of choice when describing the executive team in an organization, many of whom don’t actually have strategic responsibilities.
The idea of strategic planning isn’t entirely regarded with favour either. Criticisms of its relevance and usefulness abound. Strategic plans are seen as meaningless documents that result in no action. Strategic planning sessions are viewed as thinly disguised reasons to stay in nice hotels and go golfing. The competitive environment is viewed as sufficiently competitive and uncertain that planning is impossible, and that organizations need to be ‘reactive’, ‘lean’ and ‘nimble’. Well, yes, they do. In my view, however, they can also be strategic.
While I get the fact that ‘strategy’ is over-used and imprecisely understood as a word, that doesn’t mean that there isn’t an underlying idea that is useful. Rather than dismissing it as meaningless or inadvisably used, perhaps we need to reclaim it for the purpose it was intended. This is it’s own challenge, as ‘strategy’ is defined as a synonym to ‘plan’. A quick check of Merriam-Webster on line requires the third possible definition before we get something close to what ‘strategy’ purports to represent: “an adaptation or complex adaptations that serves or appear to serve an important function in achieving evolutionary success.”
What strategy *should* do is define how they need to change and differentiate in order to achieve long term success. It is about thinking differently about the future, and thinking differently about the organization; in particular, it is about thinking about how the organization needs to be different in the future in order to adapt, survive, grow and thrive. Defining strategy is not a constant, every-waking-moment kind of thing. It also isn’t (ideally) something that just happens once a year when an organization’s executive team abandons the office for a planning retreat. It should be a process of deliberate thinking and planning in response to anticipated changes, threats and opportunities in the marketplace. Doing it well is hard. Evaluating its success takes time. The end result is pretty intangible, but the impact of strategy (particularly when done right, but also sadly when doing wrong) is strongly identifiable.
As for whether changing strategic direction is a sign that the end is nigh, history says otherwise. Steve Jobs famously realigned the direction of Apple to focus on two laptops and two desktops, one for consumers and one for professionals, when he returned to Apple. IBM significantly realigned on services, getting out of the hardware business, to enormous profitability and success. RBC got out of the US marketplace, and avoided the worst exposure to the sub-prime meltdown of 2008. Deliberately changing strategic direction – and being clear about doing so – was fundamental to all of these moves.
For all my criticism of Barbara Moses’ article, I do agree with one observation she makes: those who most often use the term ‘strategy’ incorrectly are least likely to understand what it means, and least likely to be involved in doing it (or doing it well). That doesn’t make the word irrelevant or meaningless, just overused and misunderstood.