Strategy models. Where are they? There has to be a model showing the structure of current strategy. This is an essential requirement for understanding whether strategy needs to change and the impact of any proposed change.
Until now, there has been no such model. We have developed a dynamic model which can show the structure of strategy in any organization.
Time to move strategy beyond current flat world thinking
It has been almost 100 years since Henri Fayol's General and Industrial Management was published; arguably the first book on the subject of strategy. Fayol describes a strategy framework common to all enterprises on page 1 of chapter 1 of the book. Imagine that. The beginnings of a genuine strategy model.
But it would appear no one noticed Fayol's observation. Or more likely, understood what Fayol was talking about! After all, it was the first book on the newly emerging subject of business strategy.
Over the ensuing years, academics focused on creating models for strategy development simply because a model of the structure of strategy was not thought necessary or even meaningful. That's because of a rigid adherence to the notion that "strategy" is a single "thing", usually about a value proposition or a competitive advantage. No need to build fancy models with a concept that simple.
Except organizations are not that simple.
Research keeps telling us that boards, management, and employees are not satisfied with their understanding of what their company is trying to do. Or how it is trying to do it. Clearly, there is a need for a better way to define strategy.
Today's thinking on what strategy is seems very much like the thinking in the 1500's that the world was flat even though some 2000 years earlier Pythagorus had proposed the earth was round as a result of simple observation of the moon as it orbited the earth.
But the experts just couldn't believe the world was round. It took an explorer, Magellan, to prove them wrong. Magellan didn't sail off the edge of the world into an abyss. His expedition completed the first circumnavigation of the globe and opened up a whole new understanding of the world.
Fayol told us on page 1 of the first book on strategy that it is a system. It's time to move beyond current flat earth thinking. It's time to enter a new world of strategy understanding.
Flat earth thinking only produces strategy development models
As a result, "flat earth" thinking on strategy has only produced models for strategy development.
Consider the typical “model” of strategy.
We call it the Russian Nesting Doll Model.
It is comprised of words and process. First there is vision. Then, mission and objectives. Finally, strategy and tactics.
If you follow each step of the process, you might be able to develop a strategy and planned implementation steps.But you can't use it to understand how your company actually works.
Legitimate disciplines have models of structure.
The medical profession has its models of the skeleton, heart and other organs, and so on.
Astronomers have developed models of galaxies and the universe.
Engineers build models to test their design.
So where's a model of the structure of strategy?
A Dynamic Model of Strategy as a System
We are proposing that our model, called The Alpha Strategies, provides a dynamic model of the structure of strategy as a system.
Our model is based on work done by Fayol, Drucker, Mintzberg, and Tregoe.
We start by defining strategy as a choice of action.
This definition allows the focus to be on the choices of action and their duration rather than on the word "strategy". Our model doesn't approach strategy as a single course of action. We see strategy as a complex system of multiple choices of action.
Our research finds there are 8 common strategies or choices of action at the core of every organization.
6 were identified by Henri Fayol. The remaining 2 were identified by Peter Drucker in The Practice of Management, 1954.
These 8 choices are the foundation of the strategic plan of any organization and the basis for all organization design.
Our research also tells us that not only are there 8 strategies common to every organization, there are also 3 types of strategy. In other words, strategy is a dynamic system.
One strategy of the eight will be the dominant strategy of an organization. We call it the Alpha. It leads the remaining seven.
Three strategies form the category we call Influencers. These are the strategies that most guide and constrain implementation of the Alpha and the remaining four strategies, which form the fourth category we call Enablers.
The power of strong models is that they enable meaningful insights. For example, our model provides definitions for vision and mission which are much more compelling than the loose, confusing ones so popular today. Vision becomes a description of the outcome of successful long term pursuit of Alpha, the dominant strategy. Mission becomes the business definition / mandate strategy, one of 8 strategies found in every organization.
Use our modeling site to build your strategy system
Our model can be used to construct the current strategy system for any company. It can also be used to study the impact of changes in strategy which may drive changes in the configuration of the present strategy system. In short, building our model is an essential step to understanding how the strategy system works today in your company.
Why is this important? The answer is that we have yet to meet a management team or board who were in agreement on the configuration of the current strategy system of their company; and even more importantly, on which strategy was Alpha. Our model also provides a powerful means to communicate strategy and its rationale.
In the example below, we use our dynamic strategy modeling site to show the strategy system for a typical busy medical practice .
Best of all, our model is universal.
It applies to any organization: for-profits, nonprofits, and government companies, and agencies. And our modeling site provides the templates that best suit your organization.
Our model busts the myth that somehow nonprofit strategy is different from that in for-profits. The only difference is that some of the strategies will have different names.
For example, many nonprofits and government companies don't market; they engage in communications. And the business definition strategy is called mandate. Service delivery may be called production or manfacturing depending on the nature of the for-profit or nonprofit business.
Stop beginning your strategic planning with strategy development models and start it instead by modelling the strategy system with The Alpha Strategies.
It takes more than vision and mission to run a company. There are 8 strategies and 3 types of strategy to manage. Do you understand your strategy model? Do you understand your Alpha, Influencers, and Enablers?
Building your model will be sure to provoke some very thoughtful thinking and insight on how your organization works today. This can then become the starting point for discussion on what needs to change, if anything. After all, if you can't describe current strategy, how can you change it?
For more on The Alpha Strategies, get your free copy of The Alpha Strategies: Understanding Strategy, Risk, and Values in Any Organization
Or buy a copy. It's online everywhere.
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