We are on the verge of a revolution in strategy. While the signs may not be widely acknowledged yet, they are clear. And while these signs still mostly reveal the cracking of the old way of thinking, they also give reasons for optimism that something new is on its way. These are the eight signs:
Sign 1: We are not good at strategy and are not getting better at it either
Over the past decades a lot of research has been done on the success rates of strategy projects. The results are not good. Dependent on how exactly they measure success, studies report failure rates between 50 and 90 percent. This is an extremely high failure rate that we wouldn’t accept from any other business process. Moreover, as research indicates, the numbers don’t show any significant improvement over time and the problems stay the same. This suggests that the current way of working does not work and thus that something new is needed.
Sign 2: Strategy experts are deeply dissatisfied with the state of the discipline
When you read scientific strategy and management journals such as Strategic Management Journal, Long Range Planning or Academy of Management Review, you will find numerous contributions by experts criticizing the state of the strategy discipline. Whether these concern strategy practice, consulting, teaching or research, the criticisms reveal a deep dissatisfaction with the way things currently are going in many areas of strategy. Along with that dissatisfaction comes a broad call for change by these same experts.
Sign 3: Strategy still relies on a fragmented, decades-old toolbox
A third sign that the field is ready for a revolution is that strategy has not really progressed beyond a rather old and fragmented collection of analytical tools. If you compare the average strategy textbook today with one from thirty years ago, you won’t find much of a difference. A few tools have changed and added and there is some progress but you will see that the core has stayed remarkably stable. Given the lack of results and deep dissatisfaction reflected in the first two points, this suggests we have reached some sort of a dead end in the way strategy is approached.
Sign 4: Fads and fashions are eagerly embraced—and discarded
The next sign is that new ideas, concepts or tools that look sufficiently interesting or that are presented in an inspiring or entertaining manner are eagerly embraced. Given the state of the strategy discipline, this is perfectly understandable. It shows a craving for something better and a sign that anything is believed to be better than the traditional toolbox. Unfortunately, though, most of these new (or sometimes “new”) ideas, concepts or tools don’t produce the results that they promise.
Sign 5. Strategy has become a catch-all word with little substance
The word “strategy” is so widely used that it has lost most of its substance. Companies have marketing strategies, operational strategies, financial strategies, HR strategies, digital strategies, etc. But what does this mean? Oftentimes the word strategy is primarily expressing that something is high-level, abstract or important. This broad and undirected usage of the term strategy does not really help moving forward. Because if it can mean anything, it means nothing.
Sign 6. The building blocks of strategy are being uncovered.
The first five signs primarily reflect the disappointing progress until today. A sixth sign, though, suggests that things are starting to change. With the increasing popularity of businessmodeling, a lot of effort is now being made in opening up the black box of strategy. There is a wave of publications discussing the elements of strategy and business models (to which the Strategy Sketch in The Strategy Handbook is my own little contribution). This focus on building blocks rather than on strategy as high-level concept allows thinking and talking about strategy in a much more constructive, refined and concrete manner than before.
Sign 7: Agile and emergent approaches to strategy are being developed
Recognizing that long-term strategic planning isn’t feasible anymore in today’s volatile, uncertain, complex and ambiguous (VUCA) world, more and more attention is given to more agile, emergent and iterative approaches to strategy. While this involves risks too (see an earlier post), it leads to more realistic short-cycle approaches to strategy in which strategy generation and execution go hand in hand. While other fields such as innovation, entrepreneurship and project management are ahead of strategy in this respect, this development gives reason for optimism.
Sign 8: The opportunities of digital technology are yet to be embraced
The last sign that a revolution will come, is that digital technology offers numerous possibilities to address the complexity, uncertainty and dynamism with which strategy is associated. So far, strategy is largely a non-tech process in which simple spreadsheets and Powerpoints are often the most advanced information technologies used. So much more is possible, however, when digital technologies are embraced to support and guide the entire strategy process from understanding the status quo to executing new strategy. Along those lines, the increased uptake of digital technology elsewhere gives all reasons to be optimistic about its uptake in strategy.
The first five of these signs indicate a need for a revolution in strategy. They show that the discipline is done with the past and ready for something new. This is a fertile ground in which new ideas can grow and flourish. At the same time, the last three signs indicate that change is also possible and starting to happen. What the revolution along this path is going to look like and when it is going to happen is hard to tell. However, it will come.
This post was published earlier here on my forbes.com page.
Image credit: Getty