A strategy for a strategy

Do you think you have a winning strategy? A new book called Your Strategy Needs a Strategy, scheduled for publication in May, is set to challenge how executives approach strategy.

The book, written by Martin Reeves, Knut Haanaes and Janmejaya Sinhaand from Boston Consulting Group, is based on ideas outlined in a 2012 Harvard Business Review article. The authors state there are four broad strategy styles and companies that can match their strategy style to their environment perform better.

Classical strategy is what we see most often, the article says, and is “familiar to most managers and business school graduates”. It is suitable for stable, long-term industries.

Adaptive strategy is used where long-term plans are less useful, where the environment is fast moving, the economics are uncertain and disruption rules. They cite Zara, the fashion group as operating in such an environment. They need to set their strategy for the short term, and hence, set the business to rapidly adapt to new circumstances as they appear.

Shaping strategy is for the environments in which nothing can be taken as permanent, for example, internet software. Fragmentation, new entrants and dominant incumbents all exist together. Shaping strategies are highly flexible and focus beyond company boundaries. These businesses shape their own environment.

Visionary strategy is for those businesses going beyond shaping their industry by actually laying down a vision of the future – companies see new markets and then create them. The examples include Edison for electricity and UPS for internet purchase logistics. These strategies are “big-bets, build-it-and-they-will come” by design.

The book introduces a fifth strategy archetype called “renewal” for those environments in which resources are “severely constrained”. This is when the current way of doing business cannot continue and a new strategy is needed. The example of American Express following the global financial crisis is cited in the book.

Businesses may need to use some elements from each style, and some forward- thinking directors might find it worthwhile to see strategies prepared in different styles.

For the full Harvard Business Review 2012 article, click here.