Is Strategy Static or Variable?
In last month’s issue of AlbuonStrategy we discussed three reasons why strategy fails (3 Reasons Strategy Fails). I would like to follow up on that conversation with a question—is strategy is static or variable. From our own client experience, we believe there is both confusion and difference of opinion about the answer to this question.
Would you agree that strategy is a dynamic, continuous and adaptive process and it needs to be managed over the long term? Let’s be honest, as sound as you might feel your strategy is today, you should never stop questioning it. Strategy is simply a bet on the perceived future. No one has yet found a way to predict all that will happen in the future. Rather, we accept a forecast of the future based on our current knowledge and past experiences for our business and industry.
Think about the surprises you have encountered in your business: Technology changes, departure of key employees, competitors gaining advantages, loss of a major customer, etc., etc. These are just a few examples of disruptions that might cause a change of course at any point during the implementation of your strategy. In our experience, we have seen how effective this “variable” mindset can be. The bottom line is if you accept and operate under the concept that strategy is dynamic, continuous and adaptive, you will develop a heightened awareness of internal or external changes that might impact your strategy and be better prepared to deal with these challenges in a deliberate manner.
So are all elements of your strategy variable? No. While your strategy needs to be dynamic, continuous and adaptive, the strategy’s foundation should be static. The strategy’s foundation defines the way you play and win in the market. Think of it as the way you create value for your business and the capabilities that support your advantages. Not to say that the strategy’s foundation cannot change, because it can, but it usually takes a commitment of time and resources over the long term. This is why a client of our decided to limit the product categories they participate in, or another international business restricted itself to operate in only a few select countries.
What are the differentiating capabilities that support your strategy’s foundation? How do these capabilities define what business you are in and how you do business with your customers? If you are clear about what comprises your strengths and capabilities, you will make better strategic decisions more often and with more confidence.
Your strategy needs to be variable to deal realistically with the unpredictable and stay relevant in the fast changing business world we live in. At the same time, the foundation of your strategy needs to remain constant so that short term strategic decisions build off your value proposition and differentiating capabilities. Are you prepared to manage this paradox? We can help you navigate these challenges. Give us a call or share with us some of your experiences.