The roots of strategy can be traced back to ancient times when generals and commanders relied on cunning and foresight to out-maneuver their enemies on the battlefield. The word "strategy" comes from the Greek word "strategos," which means "generalship." In ancient Greece, military strategy was a critical skill for generals, who were responsible for leading their troops into battle and outmaneuvering their enemies. In the centuries that followed, military strategy continued to evolve as new technologies and tactics emerged.
In the mid-20th century, strategy began to shift away from the battlefield and into the business world. This was due in part to the increasing complexity of modern businesses and the need for long-term planning in order to succeed. One of the most influential figures in this shift was management guru Peter Drucker, who emphasized the importance of strategic planning in his books and articles.
Drucker argued that businesses needed to focus on long-term goals and develop a clear vision for the future in order to succeed. He encouraged managers to think strategically about their company's mission and goals, and to develop plans that would help them achieve those objectives. Drucker’s approach was classically planning ‘back from the future’, driving choices that made the most of the organisation’s strengths today, but crucially would position it well to achieve the intended future goals.
In time other business theorists developed new frameworks for strategic thinking. One of the most influential was Michael Porter, whose "Competitive Strategy" introduced the concept of competitive advantage. Porter argued that businesses could gain an edge over their competitors by developing unique strengths in areas like cost leadership, differentiation, and focus. These and other strategic frameworks have continued to evolve in the decades since, as businesses face new challenges and opportunities. For example, the rise of globalization and the digital revolution have forced companies to adopt new strategies in order to stay competitive. Many companies today are focused on innovation and agility, using technology and data to drive growth and adapt to changing markets.
Incremental changes in the field of strategy over the years have made it very different today from its roots all those centuries ago. Military strategy today will be completely unrecognisable to ancient generals. As capabilities have evolved, what constitutes winning models has changed. In the past, competitive advantage used to be about ‘cornered resource’ (oilfields), and ‘barriers to entry’ (large conglomerates). These are not as widespread anymore. While regulators actively try to encourage competition, the digitisation of sectors has made it easier for newcomers to enter and scale without the need for excessive amounts of capital upfront.
But it is not only the strategies themselves that have evolved – the approach and process of defining strategy also need to change. Traditional approaches to strategy involve hypotheses and frameworks which are applied at a point in time, and usually depend on perspectives and ‘gut feel’ more than data driven insights. Today’s capabilities allow data analytics at a speed that was previously unthinkable – it is literally possible to ‘boil the ocean’ of data to derive valuable insights. We can formulate strategies based on robust data, rather than anecdotal evidence. The approach to strategy can also come down from the ‘head office / ivory tower’ to the coal face. It can and should engage all employees, rather than just the top management. It should balance the ‘top down’ with the ‘bottom up’ to incorporate different perspectives and generate buy-in and ownership. Finally, strategies today should be living and breathing – not set in stone, but able to react quickly to new information.
We at strat. believe that it is time to change the strategy paradigm again. Strategy needs to be data-driven, customer-centric, and capabilities-led. Strategy needs to become an inherent, embedded capability in the organisation, not dependent on the expertise of external advisors.
What do you think?