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Posted: March 07, 2012

Does strategy still make sense?

You betcha!

Todd Ordal

Capitalism no longer works. The economic meltdown, the millions of foreclosed homes and unemployed people, the vacant pension accounts and the general malaise must prove the point. Right?

I don’t believe that for a second. The fact that my wife and I have imperfect days doesn’t make me want a divorce. We make adjustments. Likewise, the fact that we allowed ourselves and our politicians to do stupid things doesn’t mean we should march toward socialism. I’d prefer not to “Greece” our future.

Just about as foolish as the kill-capitalism movement are the articles in business publications about the irrelevancy of strategy in our current business climate. Although it’s certainly a VUCA world, eschewing strategic thinking is like boarding a raft for Cuba to enjoy a better life. Throwing out strategy is like throwing out capitalism.

The fact is that many companies don’t have a strategy—at least one they can articulate. If you can’t tell me what your strategy is, you can’t effectively align your team, evaluate opportunities or even know which costs to effectively cut (let’s call “strategy” an aligned set of activities that allows you to prosper in your competitive environment). Here’s the strategy test: If you think you have one, write it down right now. No hurry; I’ll wait a minute. ... Now let’s go out the shop floor and ask them to do the same thing.

Strategy in the current environment is not much different than it was in the day of Sun Tzu.  You still need to identify what you will do to prosper in your environment, whether attacking warring tribes in China or developing the right cost structure and service level for an airline. “How” you think strategically certainly may have changed. The frequency, the data points and the need for speed have undoubtedly changed, but not the need to be able to align your activities, investments and people.

No one can predict the future with complete accuracy, but I’m pretty sure that the sun will rise tomorrow and I’ll use that information to plan accordingly. Time horizons may differ, but organizations must try to predict the future and then identify how they will succeed in that world. That is the essence of thinking strategically and it is by no means irrelevant.
 

Todd Ordal is President of Applied Strategy LLC. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He speaks, writes, consults and advises on issues of strategy and leadership. Todd is a former CEO and has led teams as large as 7,000. Follow Todd on Twitter here. You can also find Todd at http://www.appliedstrategy.info,  303-527-0417 or todd@appliedstrategy.info

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