The adage, "If it ain't broke, don't fix it" reveals our general dislike of anything that upsets the status quo. Yet the only constant of business is change.
What's more, the average business strategy cycle, like the average product life-cycle, is shortening.
Strategic planning has had a chequered history. It reached its peak in the 1970s before falling from grace. As has been the case with many management techniques and philosophies, it wasn't the concept itself that was at fault; it was the way in which organisations went about it.
A team of MBAs, cloistered in the company's ivory tower, drew up grandiose strategies that were then imposed upon line management for implementation. Often the strategy was misunderstood, often it was impractical and always there was a lack of ownership on the part of those whose job it was to make it happen.
So the belief arose that the key to business success lay with implementation, a belief fuelled by the writings of people such as management guru, Tom Peters.
In his book Thriving on Chaos, Peters states that: "If we've all learned one thing in the last decade, it's that brilliant execution is more important than a brilliant strategy. And the sine qua non of brilliant execution is that (1) everyone knows which way the boat is heading, (2) the course is being consistently steered, and (3) the route is an exciting one, worthy of enlistment."
The key word is "brilliant". Peters applies it to both execution and strategy.
When both are of a very high calibre, few would disagree with his conclusion. Yet as his own observations have shown, of all those companies which were cited as role models of excellence in In Search of Excellence only one had, in his opinion, withstood the test of time.
Others have fallen on hard times. And for misfortune to strike such icons of business excellence suggests that it was not the manner of their doing things that had caused the problem, it was simply that they failed to appreciate that the strategy that took them to the top had run its course.
It was no longer "brilliant", and no amount of "brilliant execution" could make up for its flaws. The strategy had entered the decline stage of its life-cycle.
The starting point to an understanding of both the strategy life-cycle and the reasons for its compression lies in determining what is meant by strategic planning as opposed to other forms of planning.
Professor Robert Cope drew up a table that juxtaposed the characteristics of both. The key point of difference between strategic and other forms of planning is that with the former, "the enterprise's environment and context are primary determinants of strategy / choices / direction, rather than the enterprise's "strengths and weaknesses".
Looked at in this context, it is easier to see firstly why strategy remains the foundation stone of performance and why all strategies have a life-cycle. A strategy will always have a life cycle because it must reflect the environment in which the organisation operates, and that environment is constantly changing.
As our economy becomes ever more global, there will be even more events, trends, competitors and technological developments that we will need to take into account.
However, just as factors outside the enterprise indicate the necessity for change, so do factors internal to the enterprise support the maintenance of the status quo. And the reality is that the more successful the company, the more reluctant it is to look critically at the strategies that brought it success to assess their currency in the light of a changing environment.
So the current business strategies are caught between two opposing forces, one set promoting change and the other set resisting it.
Management has an in-built bias towards focusing its attention on the internal environment. If things are not going well, there is a hierarchy of response that starts with trying to do better what the enterprise has always done.
If focusing on the execution of the present strategies doesn't work, the next step is often a revamp of the organisational structure. These are always disruptive and rarely result in any worthwhile gains.
There is one further internal factor' affecting an enterprise's ability to maintain the currency of its corporate strategy: management ability.
How frequently have companies been rescued from potential oblivion by strong-willed and highly focused CEOs only to falter as their survival becomes assured.
As for the necessity for change, factors such as globalisation, the market and industry life-cycle, competition and those other aspects of the external environment will all play their part in determining the length of the strategic life-cycle.
If an enterprise operates in international markets, it needs to have a suite of strategies - a strategic program - which marries products and markets together, each with their own strategy. Then strategies can be more easily adjusted to the external environment. It is a good argument for decentralisation of strategy making.
The market or the industry's own life-cycle will cause strategies to be re-evaluated. When markets are in the growth stage, many firms will enter the industry and there will be a variety of strategies that might meet with success.
At this stage "brilliant execution" is more important than a "brilliant strategy". As the market matures and profitability declines, there will be fewer strategic options and making the wrong decisions will have a serious impact on company performance, "brilliant execution" notwithstanding.
The intensity of competition, particularly in high technology industries and those that exhibit a high degree of product differentiation, will also compress the strategic life cycle.
The shorter the strategic life cycle, the more important strategy becomes in relation to execution.
Conversely, if one operates in a rather sleepy market, mature, geographically limited with a constant number of competitors, "doing the right thing" is still fundamental to performance. And the strategy will remain viable for a longer period with the key to winning against the competition being the "doing things right" component.
The inevitable conclusion to be drawn from the foregoing is that present and past success is the major cause of future failure.
Enterprises become complacent and as the strategies that brought them success start to enter decline, management's response is to look internally - how can we do better what we already do - and if that doesn't work, let's have an organisational restructure. Whereas what management should be doing is asking itself - what are the factors in the external environment that are impacting on the company's performance and how can we adapt to them?
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