The Future of Strategic Management

Staying in touch with developments in Strategic Management inevitably requires reading books, articles, blogs and viewing videos delivered by fellow practitioners of this discipline. Perhaps the greatest value in doing this is the constant reminder that the way to seek improvement in managing strategy is by implementing change, and in fact, accelerating change – and it keeps us sharp. It keeps us thinking. And it keeps us innovating.

Two recent articles bring up topics related to improving strategy that address some fundamental issues we should keep in mind. One is titled Is Strategy Dead? 7 Reasons the Answer is Yes, by Rick Smith (Forbes.com, 9/22/2014).

The other is Why I Think Change Management is Broken, by Susan Smith (susan.smith.live, 9/29/2014).

The first article cites the compressed time frames in which strategies must be created, planned, implemented and evaluated. It offers these seven reasons with supporting descriptions for the premise that strategy is dead:
1.    Incrementalism has been disrupted by disruption.
2.    Innovation is occurring with high variance outcomes.
3.    The past is no longer a good predictor of the future.
4.    Competitive lines have dissolved completely.
5.    Information has gone from scarcity to abundancy. (I will add indigestion.)
6.    It is very difficult to forecast option values.
7.    Large scale execution is trumped by rapid transactional learning.

The article concludes by stating: “The language of Strategy may be alive and well within the musings of corporate planners and external consultants. Unfortunately, the marketplace is no longer paying attention.”

Some interesting comments on the LinkedIn Group – Strategic Management Forum-Global by Tim MacDonald about this article say: “They want different outcomes. But not a different system.” And: “One challenge for Strategy is to come to grips with the letting go.”

Certainly, when we plan anything, we are creating change and therefore presumably preparing to let go of something. Aren’t we? So we must know that embracing the change and following through with it is the key. Doing so with the clarity of purpose when applying Systems Thinking, supports us in the adjustments that we must make to our strategies along the way.

So, what is your take on this? Is strategy really dead, or is our approach to strategy in need of some applied change management?

The second article also addresses the constantly increasing pace of change and the pressure on strategy and strategic plans to adapt to a “new normal”. Evidently there is a McKinsey survey that “demonstrates that 30% of Change Programs are still ineffective spanning a decade-long assessment”.

This article goes on to elegantly articulate the value of Systems Thinking as “providing the ‘final’ answer to a more effective framework to manage change regardless of its complexity or velocity, embedding it into our daily routines for profitable and sustainable results.” Susan reminds us we simply cannot “opt out” of the set of natural laws that make up Systems Thinking.

She adds that most people have not heard of Systems Thinking because they have not been introduced to it by its proper name. I would add those people have neither been given a clear definition, nor some good and simple examples of it. Once they have learned the definition, they almost always become avid students and practitioners of Systems Thinking, embracing its simplicity.

Susan continues with a conversation about the importance of using all of the Systems Thinking building blocks and not taking short cuts by only adopting one or two a-la-carte style. When you try these short cuts, your Change Program will most likely fail.

So, do you think Change Management is Broken? If so, what will you do to help fix it?

I offer you this bonus topic prompted by a post from Paul Barnett  where he asks the question: “…could this, and should this, happen to the teaching of Strategic Management?  I would argue that it could, and should.” His question in turn is prompted by the Financial Times article published on 9/22/14 titled, Universities to Revamp Economics Courses by Clare Jones.

In a nutshell, university students worldwide recently complained bitterly that economics, as it is taught today, is completely disconnected from reality and today’s economic issues. This has caused universities around the world to collectively begin to adjust their curricula to address this matter.

I find it fascinating how today’s technology can unite a group of seemingly unconnected stakeholders to create massive global change. One would think that continuously applying Systems Thinking to this singular course of education could have caused this change to be more organic and timely, and that it could certainly help in implementing the coming changes.

So, in terms of educating our future Strategic Planners and Managers, I find these threads of thought to be compelling, in particular about Systems Thinking:

If teaching economics at the university level needs some major change, what about strategic planning and strategic management? Should we be exploring what we need to change to address the “new normal”?

And what about addressing not just what is taught, but also teaching how to learn? My greatest takeaway from the years I spent in classrooms all the way through university, is that in addition to learning facts, figures and how to do things, I was also learning how to learn. Recognizing this made my graduate work so much richer.

What can we practitioners of strategic planning and management do to ensure future practitioners are being guided toward the most effective application of their craft and successful careers? Toward continuing to innovate and change how things are done in the world of strategy?

I would start with a good foundation in Systems Thinking. Illustrating how it can become a habit and just as importantly, how to distinguish it and complement it with tactical or analytic thinking. We know that Systems Thinking is not the exclusive solution to strategy and solving problems, we know that it is inclusive of other types of thinking because it is holistic in its process.

If you would like to further explore the topics of ttrategic thinking, strategic management and managing change, please contact me at eric[at]dennergroup.com.