What the heck is strategy?
If I worked for an agency or wrote for The Drum, I might ask “What the f#@k is strategy?” – this four letter word seems more apposite, given the amount of fluff written about digital strategy in particular.
Two people who are indeed asking this question are Justin Small (Chief Strategy Officer at The BIO Agency) and Eva Appelbaum (ex-Head of Digital Marketing Transformation at the BBC), as the co-founders of the Future Strategy Club, a newly formed group that meets to discuss what strategy means now.
After listening to Justin’s impassioned claim that strategy is stuck in the mud, I thought I should attempt to summarise his thoughts and frame the debate. Here goes…
Strategy has become a dirty word
Justin claims that strategy is a dirty word, that it’s difficult to sell strategy. He argues, in the copy on the Future Strategy Club’s website, that: “For most people, strategy is a mysterious thing vaguely linked to a world of competing theoretical schools from a distant time, done by very large global management consultancies to other very large global organisations.”
This view is easy to relate to when you play with the Boston Consulting Group’s interactive history of strategy (click the screenshot below).
Whether you’re talking about gap analysis, SWOT analysis, portfolio matrices, experience curves, Six Sigma, or Blue Ocean, it’s easy to glaze over slightly. Small argues the theory of strategy is complex and that the discipline has lost its ability to inspire change.
What has changed since the mid-noughties?
The timeline above is notable for a thinning out of new strategic frameworks from the mid-noughties onwards.
It’s pretty well documented what the commercial internet has done to the business landscape. Four changes in particular come to mind:
- Enabled new business models, particularly connecting consumers to providers.
- Consumers have more power to research and review, which has changed the traditional purchase funnel.
- ‘Best in class’ experiences such as Uber are raising consumer expectations (but platforms like this are difficult to develop).
- Products are evolving into services, as consumers want greater control and transparency.
In a slide from Small’s presentation, he outlines some of the biggest challenges for businesses today, faced with this disruption.
So, how does strategy need to change?
Small argues that the history of strategy is more about analysis than synthesis, and that this way of thinking is not fit for the digital age. But if that’s the case, we are entitled to ask if we need strategy at all. Doesn’t Agile and quick prototyping replace it?
This is the point at which Small draws on Mintzberg’s theory of emergent strategy, that ‘strategy emerges over time as intentions collide with and accommodate a changing reality’.
But is strategy merging with execution?
At the launching of Future Strategy Club, a straw man was proposed for strategy in the digital age. It looks like this:
Disruptive strategy delivers a disruption-proof, CX-led organisational vision through executed continual innovation.
It’s a bit of a mouthful and it reveals a paradox – is strategy merging with execution? Well, this is a paradox already well discussed. Michael Mankins and Richard Steel wrote a book called ‘Stop Making Plans: Start Making Decisions.’ The book makes the case for continuous strategic planning cycles. Ultimately, this means strategy should be less static, more willing to continually assess the landscape, and analagous to agile ways of working.
This makes perfect sense in the midst of rapid product development and service design, and fast-changing ideas of how business functions should operate (HR, R&D, Marketing, Finance etc.).
Ultimately, what we’re talking about is strategic flexibility, which may also imply a certain degree of risk taking.
Andrea Ovans offers the simplest explanation
With the Future Strategy Club’s straw man in mind, I thought I should put my own cards on the table. Personally, I find Andrea Ovans’ response to Michael Porter’s famous ‘five forces‘ analysis to be most cogent.
Porter said that strategy is about considering all the forces in your competitive environment. Ovans writes (in the Harvard Business Review) that this “was far from the final word. One could perhaps usefully divide the vast universe of subsequent strategy ideas into those that focus on:
- Doing something new.
- Building on what you already do.
- Reacting opportunistically to emerging possibilities.”
To me, these three bullet points form their own simple and elegant definition of strategy. Look up a quote about strategy and you could probably fit it to one of these three bullet points.
- Dave Trott says strategy is about “one thought that’s leaner and more efficient than the competition” (do something new)
- BP CEO John Browne said it’s important for “a business…to have a clear purpose” (build on what you do)
- Pete Yates says that “Strategy is a never ending journey where a series of evolving decisions are made to counteract an ever changing landscape” (react opportunistically)
But the Future Strategy Club is on to something…
As much as I like those three bullet points from Ovans, Justin Small and Eva Appelbaum are right. Strategy isn’t quite the same thing any more. Strategy execution is more complex, as is the measurement of strategy performance gap. Strategic flexibility is more important, and ideas about leadership and implementation are shifting.
If the discussion is in danger of plummeting into semantics, maybe we are better defining a strategist, rather than strategy.
Small puts it thus, a strategist is: “An analytical visionary creative whose knowledge of human behaviour and data allows him or her to help organisations re-orientate their strategic vision towards more agile, customer experience led products and services.”
Okay, this is a bit of a mouthful, too. But to me it’s clear that digital technology is making the task of a strategist broader and more pressing than ever.