Monday, September 8, 2008

Strategic Drift ... Is it always bad ?


Strategic Drift

“To be in hell is to drift: to be in heaven is to steer.” – George Bernard Shaw

Is the strategic drift always bad?

Strategic drift can be defined as the cleavage from the planned strategy or more precisely steps taken to change the goals and vision in order to the match the unplanned outcomes success or failure. Strategic drifts occur as a result of weak planning, poor goal setting and performance system.
It is a general mis-fit between the strategy, in-congruence between the vision and operations of the organization when it stops walking its talks. In fact it changes its talk to match the way it walks.

The term was first defined by Charles Handy in 1989, as a gradual change in strategy[1], a drift from vision that occurs so subtly that it is not noticed until it is too late.


I would illustrate the concept with the example portrayed in the article “The Vision Trap”[2] by Gerard H. Langeler. The article talks about a start-up company called Mentor Graphics founded by a few enthusiastic and self-confident MBAs having a background in computer graphics and computer aided engineering. With the agenda of catering to the demand for product, the primary motive to have fun, Mentor Graphics embarked its journey with a simple unarticulated vision to “Build something that people will buy”.
After a few initial hurdles it got business and started doing good and in some time was faced with competition from Daisy Systems. Their unarticulated corporate vision changed to “Beat Daisy”. Their vision was simple, black and white, with Daisy’s bad as their good! After eventually beating Daisy the employees urged for a more concretely defined vision for the company and the leaders came up with the vision of “Six Boxes” denoting striving for excellence in six lines of business the company was into. But this vision was less quantifiable and lacked sense of urgency yet easy to understand. Their strategy drifted from overall success of company to sub-system optimization as each of the six boxes had its demands for resources. With the un-viability of some businesses they were reduced to “Five boxes” and less! They went up to a more customer focused vision of “10X Imperative” which was to make external customers 10 times more productive. But this too failed as neither they nor their customers were clear on what productivity is. The company progressed on account of its products, though the vision was unclear and strategy mis-fit. Subsequently it had visions like “Providing the Bleeding Edge technology” and “Changing the way the world designs. Together”. The company soon realized that they were not generating products but poetry. With the grandiose vision of changing the world it was high time that they realized to be engulfed in what is called “Vision Trap”. They realized that their visions have out grown them and their strategy and vision were having a rough marriage. They came back to basics with the short, medium and long-term vision of “Build something that people will buy”. This had always been their primary strategy. Nothing suited their strategy better than having fun in building something that people will buy. It captured the entire essence.

The above article clearly explains that the strategic drift occurs when the original goals become vague and impertinent. Then the strategies can no longer uphold the vision and consequently the vision needs to be changed to suit the strategy for good or bad. A robust strategy presupposes a well thought out vision. If the vision mis-matches with the ad-hoc strategy, decisions are made incrementally to fuel present strategy and not as a part of vision.

To conclude, Strategic Drift is not necessarily bad. If faced with strategic drift, it is pertinent to the organization to correct its basics and identify whether it has fallen into vision trap or is actually striving the wrong path. Putting a square peg in a round hole will not help.

“Do not quench your inspiration and your imagination; do not become the slave of your model.”
- Vincent van Gogh, Painter


References
[1] Strategic Management, Wikipedia, retrieved September 6th, from http://en.wikipedia.org/wiki/Strategic_management
[2] Langeler, Gerard H. “The Vision Trap”, Harvard Business Review, Mar/Apr92, Vol. 70 Issue 2, p46-54

2 comments:

aryan said...

Nice insight into strategy. The quest is truly unending.

Ankit said...

Nice blog i should say first....but I would like to give a different perspective..I think strategic drift is actually useful....when we are deeply involved into a strategy, we tend to be myopic in our ideas, at times these drifts bring in a broader perspective, wherein we can get fresh insights into the same strategy...which may or may not be useful, but worth exploring...

~Ankit