The vast majority of Intended Strategies will be replaced by an Emergent Strategy that no one ever anticipated.
This year, almost every CEO will hold a strategic planning session to get to a plan for 2020. At the end of these sessions, most companies declare, “Voila, this is our strategy” … and usually it will just be a linear extrapolation of what they are doing today.
When 2020 rolls around, the vast majority of these intended strategies will have fallen by the wayside to be replaced by an Emergent Strategy that no one ever anticipated, the product of spying on game-changing competitors, talking to customers, or a new 10x technology.
I love the distinction of Intended Strategy vs. Emerging Strategy, which was coined by Henry Minztberg. Whenever I mention it to a CEO or Head of Strategy and Corporate Development, it’s as if a light bulb goes off in their head, because it makes so much intuitive sense. They intuitively understand that their intended strategy either is not going to happen for various reasons or that it is going to get them in trouble if they stick to it given the emergence of game-changing forces and factors.
I have a big property with a very long gravel driveway and I went to buy a Toyota Tacoma this week for plowing, transporting lumber from Home Depot, and taking trash to the dump. The sales person, Artie, was a very nice guy who used to work at Digital Equipment as a technical specifications writer.
He said Ken Olsen, Digital’s former CEO, had what amounted to an intended strategy of selling big computers in a world where a new generation of CEOs, like Steve Jobs, were following the emergent strategy of small computers. According to Artie, Olsen was stuck in the 40’s when he insisted that people did not want a personal computer in their homes.
I think one of the big factors that keeps CEOs stuck with their intended strategies, when they should just be letting strategy emerge from interacting with the market, is the very high need they have for certainty.
If you ask CEOs, “What’s your strategy?” most will rattle it off with a very high-level of conviction. By contrast, when Steve Jobs returned to Apple after being fired, he was interviewed by Richard Rumelt, author of Good Strategy Bad Strategy, about what his strategy was. His answer, “I have absolutely no idea.” He then added, “I think I will just wait for the next great thing.”
How about your, stuck with your intended strategy or letting your strategy emerge from interacting with the marketplace?