The difference between strategy and strategy

Strategy is key for each and every organisation – we probably don’t need to tell you that. But with strategy being so incredibly important, it’s even worse that we spend far too little time thinking about what it actually is. And that’s exactly what we want to change with this post today.

In the most basic terms, strategy is all about asking yourself these few questions:

–       Where are you now?

–        Where do you want to go?

–       How do you get there?

–       How do you know that you have arrived?

This gives us already a lot to work with – but it still leaves us wondering about the details, and ways how to come up with successful strategies.

Luckily, strategies have been studied by loads of psychologists, entrepreneurs, and many other sorts of people for a long time, and their research can help us a lot. Henry Mintzberg, Bruce Ahlstrand and Joseph Lampel are some of the most influential researchers in this field, and in their great book “Strategy Safari”, they outline as many as 10 different “strategy schools”. Now that’s a lot to start with, but in this post we are going to introduce you to the two schools that we think are the most important in today’s business world: The Design School, and the Learning School.

 

The Design School

The first approach we are going to look at is called the Design School. It’s probably what most people have in mind when talking about planning, or even strategy. In the Design School, one person – most often the CEO – designs the strategy for all other people down the hierarchy to use. It’s as if he designs a construction manual for an IKEA cupboard for the organisation to build together. And in the perfect world this works perfectly well: Everyone looks at the manual, does what they’re supposed to do, and in no time we’ve got a nice cupboard standing in front of us. But you know as well as we do that the world isn’t perfect. And most of the time, it’s much more complex than an IKEA cupboard, so everything gets much more difficult. For our cupboard analogy, that would mean that some parts are missing, or that the screwdriver doesn’t really fit. And then you’ve got a problem. And if all you’ve got to go by is the predetermined manual, you won’t ever get your cupboard finished.

This is exactly the problem that comes with the Design School. You simply can’t predict everything that might go wrong, and the guy designing it all can’t possibly know everything that’s going on around and below him. Also, when organisations then look at the reasons why the plan has failed, it’s usually not the guy writing the manual that gets the blame, but the ones who could not put it into practice. And if that’s the case, things don’t tend to improve with the next well-meant, but ultimately unrealistic plan.

Now don’t get us wrong, the principles of the Design school are not bad at all. On the contrary, it’s absolutely necessary to think about what you’re going to do, to come up with a manual, before you’re starting to do something. But there is one huge flaw: It’s too inflexible. As Mantzberg puts it: “Setting out on a predetermined course in unknown waters is the perfect way to sail into an iceberg”. And that is exactly where the Learning School comes in.

The Learning School

The Learning School stands in clear opposition to everything we’ve talked about before: Right off the bat it tells you that the world is too complex for any pre-planned strategy. Instead it is all about reacting to new developments and is quick to change approaches. It’s much more like a trial-and-error way of going about: You keep the things that work and throw out the ones that don’t, all while trying out new ideas to react to new opportunities and challenges. Over time, a more clear and concise strategy will appear almost by itself.

What’s important here is that this isn’t just being done by the CEO. Ideally all levels of the organisation are being involved, leading to strategy being developed much more organically and collectively. The entire system learns, not just the leaders.

So what is left for the management to do then? Mantzberg tells us that it should guide this process, “(…) by phasing out ineffective routines and transferring effective ones from the one part of the organisation to the other (…) or by experimentation – seeing how innovation on a small scale will affect the rest of the organisation”. Compared to the Design School, the leaders take a much more reserved role, and shape the process more subtly. And that can be very difficult – especially because most managers hardly have any experience working this way. The absence of planning even goes against everything they’ve learned so far. And this is exactly the main problem with following the Learning School. It’s like asking a classical pianist to suddenly improvise everything – he’ll have huge difficulties adapting, and the output will sound much less beautifully than if he had just stuck to his notes.

With this example we’re already reaching our finishing thoughts for today: After all, what matters is not the type of school you follow, but the results. And as you’ve seen, there is no one perfect way of creating strategies. Both schools can lead to excellent output – or the opposite. What works for one firm, might be disastrous for the other. But both these approaches can teach you some incredibly valuable insights into creating the perfect strategy for your very own organisation.

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