What is Strategy?
A multi-perspective definition of strategy considering; science, politics, risk, management, objectivity & philosophy.
Strategy may be defined as a scientific management approach to researching opportunities for the advancement of the interests of particular groups. Its application reflects a philosophical belief that outcomes can be influenced positively by planning. Independent parties may increase the probability of success by bringing an objective perspective. Long term strategy resilience may depend upon achieving synergy with the interests of society as well as a sustainable competitive position.
Scientific method
Analysis is the act of dividing something up to make it more manageable; the essence of excellence through specialism. The opposite is synthesis where separate parts are experimentally brought together to find new combinations that have higher value. A purpose of strategy is to take a holistic (whole) view of an environment at a particular point in time. This permits realistic choices of aims & the tactical planning to reach them, based upon as complete a view of current circumstances as is practical.
A commercial analysis of strategy may include; market segmentation, review of products & service portfolio, competitors, external trends & internal resources. Missing out any part may reduce the realism of a plan. A means to synthesise strategy proposals is the SWOT (Strengths, Weaknesses, Opportunities & Threats) matrix which brings together the parts in a manner designed to elicit competitive advantage.
Political engagement
Choosing to engage others in a strategic planning process may improve the depth of analysis & eventual support for the chosen aims. This is an act of collaboration that can improve the overall "utility" or outcome for a group. Its alternative is isolated planning that may gain political stealth advantages at the expense of "barriers to change" during implementation.
Excessive consultation may however attempt to reconcile too many views resulting in watered down proposals where no one gains. A skill to arbitrating strategy in groups is to set rules for prioritisation & authorisation in advance so that decisive action arises that the majority benefits from. Dissipated or no action may have a negative value.
In a workshop there is a noticeable difference is between "dialogue" where ideas are debated without positions being taken to a "win-win" conclusion & "discussion" where verbal competition occurs between stances. A purpose of facilitation is to achieve a structured dialogue.
Treatment of risk
A strategic analysis may develop a structure for quantitative modelling based upon historical performance. Risk may be defined as an area with sufficient history to consider probability. Uncertainty reflects pioneering proposals where there is no quantitative history & outcomes may only be estimated. The apparent safety of risk predictions should not however be over valued as in most circumstances "costs are the only certainty".
Both risk & uncertainty may be reduced by research however "self-perceptions" occasionally differ from actual human & market behaviour. Human behaviour patterns are often very resilient to change & the time taken for acceptance of the genuinely innovative is easy to underestimate. It is thought that people frequently overestimate what can be achieved in one year & underestimate year 3 potential caused by "snowball" effects.
Management approach
For the most part strategy is concerned with effectiveness; doing the right thing to meet goals or make profit. Whilst a separate agenda; operational efficiency may be considered as a source of competitive advantage or because there are significant capital expenditure proposals. A strategy audit is a potential means to identify if market positions are likely to be able to generate a Return on Investment from capacity enhancement or automation. Operational efficiency methods such as Business Process Improvement & Lean 6 may be applied to the process of strategy consulting itself to increase speed & quality.
Objectivity
Including individuals in the strategy process who are independent from its outcome is beneficial. Emotional disengagement may assist accuracy in estimation, or the consideration of restructuring & divestment opportunities. Assumptions may also cause "blind spots" in areas of knowledge the absence of which is more likely to be identified by an outsider or through comparison by benchmarking. Commitments to specific assets may also impair judgement due to escalating commitment effects.
Philosophical underpinnings
Whilst fatalist philosophy suggests that the future is unalterable the opposite, free will invokes a measure of ability to influence the future. It seems likely that outcomes may be the resolution of many interests, dictated in part by their relative strengths of position.
Strategic planning reflects a belief that desirable outcomes can be made more probable by a systematic process of research, consultation & decision making. Historically strategy has been used in military, political, investment & commercial fields sharing some similarities in conceptual approach.
Corporate & Social Responsibility utilised in strategy reflects a consideration of the impact of activities on society as well as meeting primary self-serving interests. There may be opportunities to ambidextrously generate social & shareholder value increasing long term profit resilience from hazards of legislation, taxation policy or social action.