Too little information can be as disconcerting as too much.
Patricia Wentworth (quote inverted)
The “Strategy” Process Old
Strategy and Operational Effectiveness are two distinct things and covered the differences here, let’s look at strategy under the eye of a management scientist, Henry Mintzberg.
What is strategy?
Again strategy is a widely used term that is probably widely misunderstood hence misused too. Some dedicated people take the time to observe how something works, they gather data, analyse and draw hypothesis, theories, conclusions and generic models.
Strategy is about being competitively different not by being better than the competition but by being different. As Porter suggests, an organization attempts to achieve a sustainable competitive advantage by preserving what is distinctive about her. Strategy means (1) performing different activities from rivals, or (2) performing similar activities in different ways.
It is the creation of a unique and valuable position, involving a different set of activities. Strategic position is focus on determining how different your organization is in serving your customers needs.
How do we set strategies?
The first very important distinction Mintzberg makes is that Strategic planning isn’t strategic thinking. One is analysis, and the other is synthesis.
Mintzberg goes further by suggesting that Strategy making involves 3 steps:
1. Strategic Thinking
2. Strategic Development
3. Strategic Planning
Thus, in brief; strategic thinking is about exploring options with the inputs we gathered from our competitive intelligence research for example; strategy development is about making decisions from the options we explored and it’s also about setting directions. Finally, strategic planning is about making a plan of action about how to implement the strategy that was picked in our development/decision process.
Problems will arise when one of these activities is elevated to pre-eminence, rather than seen as simply a part of a necessary, and much wider, process—all three steps are logical, progressive and also iterative since this is the process that we will use repeatedly when involved in strategy making. It is also much needed and vitally important for successfully confront an organization’s strategic environment.
Mintzberg’s 5 Ps
Mintzberg first wrote about the concept in 1987. Each of the 5 Ps represents a different approach to strategy.
- Plan. Planning comes naturally to many managers and as such is the default first step.
- Ploy. Mintzberg says that by plotting to disrupt, dissuade, discourage, or otherwise influence competitors, can be part of a strategy. This is where strategy can be a ploy, as well as a plan.
- Pattern. Strategic plans and ploys are both deliberate exercises but sometimes, however, rather than being an intentional choice, an organization’s consistent and successful way of doing business can develop into or be detected as a strategy.
- Position. “Position” is another way to define strategy – that is, how you decide to position yourself in your market. In this way, strategy helps you explore the fit between your organization and your environment, and it helps you develop a sustainable competitive advantage (see Porter).
- Perspective. The choices an organization makes about its strategy rely heavily on its culture – just as patterns of behavior can emerge as strategy, patterns of thinking will shape an organization’s perspective, and the things that it is able to do well. This is an important step that allows an organization to look at its cognitive biases.
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