Many people see the strategy process as an analytical, data driven, and time limited event where an organization leverages data and its best assessment of future opportunities to plot its course and actions over a specified period of time. And, once this plan is in place, they believe that the key to success simply lies in executing the planned strategy roadmap over the next few years.
This method of creating strategy is known as deliberate strategy. However, it turns out that this is only half of the strategy story for successful organizations.
There is no doubt that a deliberate strategy creation process is important – without a well thought out plan, an organization cannot position itself effectively to take advantage of the key opportunities on the horizon and deliver its value proposition.
However, we all realize (and if you are a student of Henry Mintzberg, you are familiar with this idea) that there’s another reality that organizations face as they work on executing their deliberate strategy – the unforeseen problems AND opportunities that inevitably crop up along the way.
These unforeseen events provide challenges for business leaders and employees who have to decide how to deal with them. Do you stick with the “plan”? Do you change it a bit? Or do you throw the old plan out completely and adopt a new course in an effort to keep your organization moving forward?
Sometimes the response to an unforeseen problem or opportunity happens via a conscious organizational decision. However, more often than not, employees and business leaders make small day to day alterations in the way they work and do business (to accommodate to the new demands in the environment and to keep moving the business forward profitably in the right direction) until all of the small decisions add up to what becomes a modification in the organization’s strategy.
This type of strategy creation process is called emergent strategy.
It turns out that successful organizations employ both of these approaches to strategy creation. That is, while they look like they are simply smart predictors of the future, the truth is that they are also opportunistic quick change artists that adapt their strategy when the need (including opportunities to transform or accelerate their progress) arises.
So, how do they do it? How do successful organizations wrestle with, and leverage, these two, often divergent, strategy forces?
Through a combination of (1) an empowered workforce that understands the “why” of the organization, (2) an infrastructure that enables sensitivity and supports responsiveness to change, and (3) a broadly understood approach to determining when it’s best to stick with “the plan” and when it’s time to make a change.
When everyone in an organization is on the same page about what’s important, where the organization is going, who it serves, and the essentials for value creation and success, every employee can take the right actions to move the organization forward. This includes executing the elements of the deliberate plan, working through unplanned challenges, and taking action on new opportunities that the organization should respond to. Having this capability throughout the organization allows it to manage both types of strategy in a way that will have the biggest benefit for both the organization and its customers or stakeholders.
In contrast, when employees are given their marching orders and are only focused on executing the activities outlined in the deliberate strategy, organizations lose the opportunity to leverage and channel emerging strategies in a way that will ultimately translate into customer/stakeholder and business success.
Successful organizations go out looking for change that will require a strategic business response to remain competitive and/or continue to deliver value to customers/stakeholders. To do this, they establish listening and engagement mechanisms that will detect and capture unforeseen challenges and opportunities, and funnel them into the organization for consideration, investigation, discussion, and response.
Unfortunately, many organizations, in an effort to remain steadfastly focused on executing their deliberate plan, close themselves off from changes that could ignite an emergent strategy. Those that do run the risk of missing warning signs or opportunities in their environment, leaving them behind as the marketplace evolves.
Finally, successful organizations have strategies for balancing the deliberate versus emergent strategy tension. When the present, deliberate course is yielding the right customer and business results, they often choose to ignore unexpected opportunities that may arise. However, when the environment is changing and/or the right customer and business results remain elusive, the balance may tilt more towards discovering and adopting emergent strategies. That being said, most successful organizations also achieve the appropriate balance between strategy forces by implementing focused but simple processes and criteria that (1) encourage emergent strategies while remaining focused on executing the deliberate strategy (Google's 20% innovation time "rule"), (2) only nurture those emerging strategies that show promise, and (3) transition emergent strategies to deliberate strategies at the right time.
Successful organizations demonstrate that the key to achieving an effective balance is ensuring that their plan has an appropriate mix of deliberate and emergent strategies at any given time. What they do know is that 100% of one or the other is rarely the recipe for sustained success.
While strategy often begins as an orderly and controlled event with a set execution plan, if you’re “doing it right”, strategy eventually becomes a dynamic, ongoing, unpredictable, and exhilarating ride for everyone in your organization. As long as everyone is clear on the key essentials of success (i.e. what “right” is for your organization and your customers or stakeholders), you and your team will be able to successfully harness the deliberate-emergent strategy tension and maximize the benefits of both approaches to strategy.