A key component to strategic management which is often overlooked when planning is evaluation. There are many ways to evaluate whether or not strategic priorities and plans have been achieved, one such method is Robert Stake’s Responsive Evaluation.[62] Responsive evaluation provides a naturalistic and humanistic approach to program evaluation. In expanding beyond the goal-oriented or pre-ordinate evaluation design, responsive evaluation takes into consideration the program’s background (history), conditions, and transactions among stakeholders.
- However, as the industry shifted towards smartphones and mobile internet, Nokia failed to adapt quickly.
- Their companies take the lead and keep it—trapping also-rans in an endless game of catch-up.
- The littleantique shop had become the full-fledged, totally unique sandwich chainwe see in America today.
- The challenges facing organisations today need leaders who arecommitted to change and can inspire others to perform to their fullpotential.
We speak ofstrategic change when fundamental alterations are made to the businesssystem or the organisational system. Adding a lemon-flavoured Coke tothe product portfolio is interesting, maybe important, but not astrategic change, while branching out into bottled water was – it was amajor departure from Coca-Cola’s traditional business system. As shown in the figure, the green line represents the changing business environment.
For example, it may be easier to changethe formal organisational structure than it is to change longestablished routines and habits. Swatch reduced costs with ultrasonic welding that eliminated theneed for screws to close watch casings. The company also simplified themanufacturing process, fully mechanising it.
But the real challenge isn’t in setting the strategy – it’s in keeping the ship on course, over time, especially as conditions change. Of the three causes of strategic drift, an uninviting culture is oftentimes the most unsettling. During times of transition, a culture that was once inviting and thriving can become secondary to meeting the demand for scalable processes. In the years that followed, Jobs and his team would revolutionize the industry by introducing some of the most influential consumer products of the century, all because he tackled strategic drift head on.
Product Strategy & Business Model.
And then there is the opportunity cost of how those resources could have been used instead. I want to be clear here and say that any deviation strategic drift definition from the plan is not inherently drift. Strategic drift is also different from any sort of malicious deviation from the strategy.
It is largely emergent, the design unfolds as contact is made with stakeholders. Over time, the customer became the driving force behind all strategic business decisions. This marketing concept, in the decades since its introduction, has been reformulated and repackaged under names including market orientation, customer orientation, customer intimacy, customer focus, customer-driven and market focus. At this time, the company he founded decades earlier had seen itself shift from a customer-centric company to just another bloated tech business. Determined to turn things around, Jobs would invoke a transformational change. Instead, it focused on hardware while overlooking the importance of software and applications.
GOOD CORPORATE GOVERNANCE
Cameron also has served in strategic marketing, sales, and operations roles at BlueArc, Pillar Data Systems, Sun Microsystems, and StorageTek. He has a bachelor’s degree in economics and math from Dartmouth College and an MBA from the Kellogg School of Management at Northwestern University, and is on the board of the Children’s Diabetes Foundation. To find external data to help your business, Google “list of global free data sources” or something similar. There will be data out there that will help you, and it will remove those “I reckon” moments from the strategic planning process. Furthermore, the use of external data can be beneficial for silencing those annoying “It worked in the past and will work in the future” people. It is the process by which the strategies of the companies become very different from the customer’s needs, or the business environment in which it operates is called strategic drift.
The incremental change phase of strategic drift often happens after a company seems to reach the height of its success. Abercrombie & Fitch was regarded as a highly influential, trend-setting clothing brand throughout the early 2000s. Their proven formula of oversized logos, high prices, and “sex sells” ads made A&F a coveted status symbol for image conscious https://adprun.net/ teens. The easiest way to decide if your organisation is experiencing strategic drift is to, once you have completed the PESTLE framework, look at all of the changes you’ve identified, and compare them to your current strategy. Instead of embracing digital technology and transitioning to digital photography, Kodak focused on its film business.
Strategic drift model – the 4 phases
In our previous article, we introduced you to PESTLE Analysis, a framework that helps you identify industry changes that could impact your organisation. Book a free trial of i-nexus today, and we’ll show you how to avoid strategic drift thanks to one undisputed view of your strategy. Many factors can lead to strategic drift, and it can severely impact a business’s success – if left unchecked, it can even cause a business to fail. Strategic drift occurs when a business fails to adapt to its surroundings and does not adapt its strategy in response to changes in its wider environment.
Looking at all of these factors can help guide strategic decision-making by showing you which parts of your organisation are impacted by which external changes, and what you need to do to mitigate the potential risks these changes may entail. An organisation’s ability to keep up with external changes determines the extent to which it is impacted by these external factors. Blockbuster, Kodak, Nokia… all businesses that fell victim to strategic drift and never fully recovered if at all. Making changes, whether transformational or incremental, requires accountability and alignment. You’ll need to develop or acquire the processes and systems needed to communicate this change to your organization and then monitor this change. This lack of foresight is all too common and termed marketing myopia.
How to Actively Prevent Strategic Drift
Let me reiterate here that without a shared, living vision that is continuously communicated and reinforced by leadership, drift is absolutely unavoidable. Fortunately, A&F finally began to realize the error of ignoring changes in fashion and alienating a broader and more stable group of potential customers. Jeffries eventually stepped down as CEO as A&F targeted a young-adult audience with a mature clothing line and subdued advertising. Before you learn how to prevent or escape strategic drift, you need to know why it happens. The changes needed here are often grand – such as organizational restructuring or investing in new markets or avenues.
Embrace uncertainty, adapt at speed
Both run the risk of failure – there is no guarantee that transformational changes will pay off, even if they are focused on better aligning your organization with its goals. In the flux phase, the gap between your customers’ needs and your organization’s services or products widens further still, and they begin to look elsewhere. While preventing it from happening in the first place is an ideal option, sometimes the elements that can cause strategic drift are far outside of an organization’s control. This blog discusses the definition of strategic drift, the phases of the strategic drift process, and how you can avoid it in your organization.
Companies that fail to adjust their strategy to changing circumstances risk being left behind by their competitors and may ultimately face a decline in performance or even failure. Kodak’s example highlights the importance of recognizing and adapting to changes in technology and market conditions. However, with the rise of digital technology and the emergence of digital cameras and smartphones, Kodak failed to adapt quickly enough. Processes and tactics that were once effective fail to produce the necessary results, and yet – for whatever reason, be it complacency or resistance to change – the organization fails to make appropriate changes. It is then up to the organization to react appropriately to these changes in order to keep its strategy aligned to its vision.
