So, How Do You Think Strategically?

I’ve found recently many of the enquiries I’ve received revolve around strategic thinking and the way strategy should be driven within the organisation. Whether it’s the economic situation we’re all facing, or the changes we are experiencing in business, it is obvious that management thought patterns are changing along with it, and many managers recognise the need to think strategically is a natural addition to their leadership portfolio. Here’s some thoughts from management expert, Henry Mintzberg.

Mintzberg argued that it’s really hard to get strategy right. To help us think about it in more depth, he developed his 5 Ps of Strategy – five different definitions of (or approaches to) developing strategy.

Each of the 5 Ps is a different approach to strategy. They are:

  1. Plan.
  2. Ploy.
  3. Pattern.
  4. Position.
  5. Perspective.

1. Strategy as a Plan

Planning is something that many managers are happy with, and it’s something that comes naturally to us. As such, this is the default, automatic approach that we adopt – brainstorming options and planning how to deliver them.

This is fine, and planning is an essential part of the strategy formulation process. The problem with planning, however, is that it’s not enough on its own. This is where the other four Ps come into play.

2. Strategy as a Ploy

Mintzberg says that getting the better of competitors, by plotting to disrupt, dissuade, discourage, or otherwise influence them, can be part of a strategy. This is where strategy can be a ploy, as well as a plan.

For example, a grocery chain might threaten to expand a store, so that a competitor doesn’t move into the same area; or a telecommunications company might buy up patents that a competitor could potentially use to launch a rival product.

3. Strategy as a Pattern

Strategic plans and ploys are both deliberate exercises, and a consistent and successful way of doing business can develop into a strategy.

For instance, imagine a manager who makes decisions that further enhance an already highly responsive customer support process. Despite not deliberately choosing to build a strategic advantage, his pattern of actions nevertheless creates one.

4. Strategy as Position

“Position” is another way to define strategy – that is, how you decide to position yourself in the marketplace. In this way, strategy helps you explore the fit between your organisation and your environment, and it helps you develop an advantage over the competition

For example, your strategy might include developing a niche product to avoid competition, or choosing to position yourself amongst a variety of competitors, while looking for ways to differentiate your services.

5. Strategy as Perspective

The choices an organization makes about its strategy rely heavily on its culture – just as patterns of behavior can emerge as strategy, patterns of thinking will shape an organisation’s perspective, and the things that it is able to do well.

For instance, an organisation that encourages risk-taking and innovation from employees might focus on coming up with innovative products as the main thrust behind its strategy. By contrast, an organization that emphasizes the reliable processing of data may follow a strategy of offering these services to other organisations under outsourcing arrangements.

Using the 5 Ps

Instead of trying to use the 5 Ps as a process to follow while developing strategy, think of them as a variety of viewpoints that you should consider while developing a robust and successful strategy.

As such, there are three points in the strategic planning process where it’s particularly helpful to use the 5 Ps:

  1. When you’re gathering information and conducting the analysis needed for strategy development, as a way of ensuring that you’ve considered everything relevant.
  2. When you’ve come up with initial ideas, as a way of testing that that they’re realistic, practical and robust.
  3. As a final check on the strategy that you’ve developed, to flush out inconsistencies and things that may not have been fully considered.

Using Mintzberg’s 5 Ps at these points will highlight problems that would otherwise undermine the implementation of your strategy.

After all, it’s much better to identify these problems at the planning stage than it is to find out about them after you’ve spent time and money implementing a plan that was flawed from the start.

Thanks again

Sean

Sean McPheat

Managing Director

http://www.mtdtraining.com

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