The concept of strategy was borrowed from the military and adapted for use in business. In his book, Strategy, Liddell Hart examined wars and battles from the time of the ancient Greeks through World War II. In doing so he arrived at this definition of strategy: “the art of distributing and applying military means to fulfill the ends of policy.” Strategy is the framework that provides guidance for the tactical actions to be taken.
In the military, when strategy becomes stagnant and tactics fail, the consequences are dire. The same might be said in business. What the authors here are essentially saying is that companies allowed their strategies to become stale. They stopped checking and re-checking assumptions. They failed to adjust strategy based on the results generated by the tactics employed.
In large and small companies alike, strategy and strategic planning are more vital and more relevant, not less. However, as in the military, an element of adaptability and flexibility must be measured in. No longer can plans be revisited annually. No longer can budgets be set annually and forgotten. The battle in the market place is too fluid. Customers, products, and markets are all capable of shifting in the blink of an eye.
Each organization must find the right balance of planning and execution, and they must be willing to shift that balance based upon the conditions “on the ground” in the market place. The (very) old saying used to be: “It is the big that eat the small.” That shifted in the late 1990s to: “It is the fast that eat the slow.” The new model incorporates both of those but adds: “It will be the agile that eat the lumbering.”
Strategy was never meant to be a static endeavor. It is dynamic, adaptive, and flexible. These forgotten elements of strategy are essential weapons in achieving desired ends.
“During the recession, as business forecasts based on seemingly plausible swings in sales smacked up against reality, executives discovered that strategic planning doesn’t always work.
Some business leaders came away convinced that the new priority was to be able to shift course on the fly. Office Depot Inc., for example, began updating its annual budget every month, starting in early 2009. Other companies started to factor more extreme scenarios into their thinking. A few even set up “situation rooms,” where staffers glued to computer screens monitored developments affecting sales and finances.
Now, even though the economy is slowly picking up, those fresh habits aren’t fading. “This downturn has changed the way we will think about our business for many years to come,” says Steve Odland, Office Depot’s chairman and chief executive.” Source: Strategic Plans Lose Favor – WSJ.com
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