Strategy for fast-changing environments
Today, strategy in business has fallen into disrepute; the expensive large-scale strategic planning exercises that were common in the late twentieth century are no longer perceived as providing commensurate returns in terms of contributing to the firm’s success. What really sealed the fate of these exercises was the fast-changing, increasingly dynamic and complex business environment, according to Johan Aurik, Martin Fabel and Gillis Jonk in their book The Future of Strategy: A Transformative Approach to Strategy for a World That Won’t Stand Still. Nonetheless strategy, when properly understood and executed, has never been more important.
If the traditional form of strategic planning is no longer relevant, what should take its place? The authors advocate an approach which they call FutureProof Strategy, which consists of three principles taken in combination:
- Draw inspiration from the future, by identifying fundamental trends that are affecting the firm now or could do so in the future
- Be organizationally inclusive, by engaging people across and up and down the firm in formulating it
- Take a portfolio approach, by identifying and managing competitive opportunities on an ongoing lifecycle basis
While this approach does not offer the neat convenience of a “blue ocean” strategy, it does provide a helpful new perspective. A firm’s strategies are no longer laboriously drawn from a detailed analytical process based on historical data, then fixed until the next strategy cycle. Instead, they are inspired by trends noticed anywhere within the organisation, and they are adopted, modified and abandoned as soon as their increasing or decreasing usefulness is perceived.
I did not find the book as easy to read as Blue Ocean Strategy, but I do think the general principles which it provides will be very useful to many organizations.