The trials and tribulations of strategy

We live in hard times for strategic thinking. When complex problems are at hand, there is a temptation to immerse yourself in operational “firefighting”, writes Katri Vataja in the Sitra research team’s Weekly notes blog. Strategic thinking became politically topical in the spring, when the debate on the government programme began. The idea was to create a concise programme which is more focused on policy lines and that will be filled out by an action plan. This reform received broad political support. But what happened as the political content became clear? Did strategy become a scapegoat once again? Strategic management has perhaps been the world’s most popular management doctrine, having enabled the goal-oriented and successful management of large groups of people, and not just in warfare. Unfortunately, it has also provided an arena for power politics and self-seeking. As a management tool, strategy is only as useful as the user allows it to be. We can understand its importance by considering the related dilemmas.

A shared direction or bureaucracy?

Despite its primary role of providing a community with an inspiring, common direction, strategy often seems both daunting and boring at the same time. Any meaning it has is dependent on whether or not it says something to people. A good strategy succeeds in creating a common identity and goals, both in terms of content and effectiveness. It is greater than the sum of its parts. If strategic discourse is dry, remote or viewed as divorced from reality, it will naturally restrict participation in discussion. This has led some organisations to begin replacing outworn concepts. Municipalities and parishes already use the term “performance plan” rather than strategy. On the other hand, rousing strategy declarations are hard to come by, despite the means at hand of promoting human-centred strategy work. Surely there is no need for strategy to sound like Latin to be credible? On the contrary, couldn’t it inspire emotion – even passion­ or a buzz? The vision at a strategy’s core should be the compass that gives us our long-term direction. Sitra’s vision sees Finland succeeding as a pioneer in sustainable well-being. It describes the future towards which we at Sitra are working. For us, sustainable well-being means the pursuit of the good life within the earth’s carrying capacity. Such a vision can be promoted via several routes and the purpose of strategy is to provide more precise answers on “how”. Strategy work also means eliminating lots of options, which is often the most difficult task of all.

Strategy must keep abreast of the world

Another strategy dilemma relates to the question of how rational planning can be in turbulent, complex operating environments. As a discipline, strategic planning has fallen on hard times, when plans no longer hold together as they used to. Markets can be turned upside down by revolutionary ideas that make nonsense of top-down five-year plans. However, we should not throw the baby out with the bath water. Strategy processes need to react to these challenges, including at Sitra. Our open and continuous strategy process includes a promise that strategic goals and the means of achieving them are open to being challenged, updated and adjusted as we learn more about how well they work and our operating environment. Learning requires experimentation to find the best solutions and information on the impact of what we are doing. Strategy describes an organisation’s perspective and positions it in relation to the operating environment. At Sitra, we try to take a future-oriented view of the world, seeking solutions to systemic problems, in particular, that are emerging as a combined effect of multiple megatrends. Continuous foresight is therefore a key source of information for strategic choices. Strategy is a theory of change that tells us how we can achieve the future we want through an optimal mix of actions and resources. At Sitra, three themes provide the focus areas of the activities we have chosen in order to achieve our vision over the current strategy period. Sitra’s strategic goals are constituted from the objectives of the focus areas Resource-wise and carbon-neutral society, New working life and sustainable economy and Empowering society. We believe that we can best fulfil our vision by working towards these goals.

A prisoner of the times or capable of reform?

Research interest in strategy from the practical perspective has increased in recent years. This kind of approach to exploring strategy primarily consists of breaking it down into the things that people actually do – not into something that organisations just showcase. Strategic management needs to be redefined as part of the management and culture of existing and future organisations. Strategic thinking is here to stay, whatever the outlook on management, or the content or processes associated with strategy. Organisations representing new corporate cultures already view strategy as an organic process. Weekly notes is a series of blogs offering insights into the topical issues being discussed each week by Sitra’s research and strategy team. Our Weekly notes are gathered together here.