In today’s dynamic and complex business environment, having a strategy is not enough. The pace of change, unpredictability, and competition means that companies need to rethink how they approach strategic planning. This concept is best captured by the phrase, “Your Strategy Needs a Strategy,” which was popularized by a book co-authored by Martin Reeves, Knut Haanaes, and Janmejaya Sinha. The idea behind this concept is simple: one size does not fit all when it comes to strategy. Different situations and environments call for different strategic approaches.
This article delves into what it means to tailor your strategy and why it’s essential to adapt your approach to your organization’s circumstances. It also explores different types of strategies and how companies can select the right one for their specific needs.
Why Your Strategy Needs a Strategy
Traditionally, companies have relied on rigid, long-term strategies with the expectation that markets and environments would remain stable. However, today’s global economy is characterized by rapid change, technological disruption, and increasing uncertainty. A strategy that works in a predictable, slow-changing market may not be effective in a fast-paced, disruptive one.
The concept of “Your Strategy Needs a Strategy” suggests that instead of sticking to a single approach, companies must develop a strategy that aligns with the characteristics of their specific environment. This requires identifying the level of uncertainty, competitive pressures, and the pace of change in the market and adapting accordingly:
The Four Strategic Environments
The Boston Consulting Group (BCG), where Martin Reeves and his co-authors work, developed a framework to help businesses identify which type of strategic approach is best suited for their particular context. This framework is based on two dimensions: the level of predictability in the market and the level of malleability (how much the business environment can be shaped by actions). Based on these dimensions, four main strategy types emerge:
- Classical Strategy: Predictable and Unchangeable
Best for: Stable industries with low uncertainty, where future trends can be reliably predicted.
Approach: In a classical strategy environment, companies should focus on analyzing the market and developing long-term plans. They aim for efficiency and optimization by setting goals and executing them with precision.
Example: Established industries like manufacturing or utilities often follow this approach. - Adaptive Strategy: Unpredictable and Unchangeable
Best for: Environments with high levels of uncertainty and unpredictability, where it’s difficult to forecast long-term outcomes.
Approach: Instead of rigid planning, companies adopt a flexible and agile approach. They experiment, learn quickly from failures, and adjust their strategies on the fly.
Example: Technology companies often need to adapt quickly to market changes, customer needs, and evolving trends.
- Visionary Strategy: Predictable and Changeable
Best for: Markets where the future is somewhat predictable, but companies have the power to shape the industry.
Approach: Companies that follow a visionary strategy focus on innovation and creating new opportunities. They try to lead the market by introducing disruptive technologies or business models.
Example: Companies like Tesla, which aim to revolutionize industries, use visionary strategies. - Shaping Strategy: Unpredictable and Changeable
Best for: Highly volatile markets where companies can influence or create new market rules.
Approach: Shaping strategy involves collaboration and ecosystem building. Instead of working alone, companies engage with others to shape the market environment through partnerships, alliances, or platforms.
Example: The digital economy, with its platform-based models like Amazon or Uber, is a classic case of a shaping strategy.
- Visionary Strategy: Predictable and Changeable
Best for: Markets where the future is somewhat predictable, but companies have the power to shape the industry.
Approach: Companies that follow a visionary strategy focus on innovation and creating new opportunities. They try to lead the market by introducing disruptive technologies or business models.
Example: Companies like Tesla, which aim to revolutionize industries, use visionary strategies. - Shaping Strategy: Unpredictable and Changeable
Best for: Highly volatile markets where companies can influence or create new market rules.
Approach: Shaping strategy involves collaboration and ecosystem building. Instead of working alone, companies engage with others to shape the market environment through partnerships, alliances, or platforms.
Example: The digital economy, with its platform-based models like Amazon or Uber, is a classic case of a shaping strategy.
The Importance of Strategic Flexibility
The idea behind “Your Strategy Needs a Strategy” also emphasizes the need for flexibility. Market conditions can change rapidly, and what works today might not be effective tomorrow. By understanding the type of strategic environment you are in, your organization can better prepare for future challenges.
Moreover, having a mix of strategies across different business units or product lines might be necessary. For example, a company’s core business might operate in a predictable environment, following a classical strategy, while its innovation arm might follow an adaptive or visionary approach.
“Your Strategy Needs a Strategy”
- What does “Your Strategy Needs a Strategy” mean?
It means that companies should tailor their strategic approach based on the characteristics of their business environment rather than adopting a one-size-fits-all approach. - How do I know which strategy type to use?
Evaluate the level of predictability and your ability to shape the environment. For predictable, stable markets, a classical strategy works. For unpredictable markets, adaptive or shaping strategies may be more effective. - Can a company use more than one type of strategy?
Yes, especially in large companies with multiple business units, different strategies might be necessary for different areas of the organization. - What happens if my market conditions change?
It’s important to remain flexible. If the market becomes more unpredictable, your strategy may need to shift from a classical to an adaptive or shaping strategy. - What are the risks of sticking to one strategy type for too long?
If market conditions change and your strategy remains the same, your company risks becoming obsolete, inefficient, or unable to respond to new competitive pressures.
Conclusion
“Your Strategy Needs a Strategy” is a reminder that businesses cannot afford to rely on a static, one-size-fits-all approach in today’s complex and rapidly changing world. By understanding the specific needs of their market environment, companies can craft more effective strategies that help them thrive in any scenario. Whether it’s a classical, adaptive, visionary, or shaping strategy, the key is to be aware of the environment and to adjust as needed. Strategic flexibility is no longer just an advantage—it’s a necessity.