Strategy as Practice. The importance of the new understanding of strategy as “strategizing” for practice
Strategy is a term usually connected to top management, long-term planning, goals, and consulting. This view dominated strategic management in theory and practice since the middle of the last century. Strategy as practice, in short SAP, is a new approach that questions this dominance. In this blog we present to you what’s actually behind SAP.
At least with the advance of quantum physics the so far dominating understanding of an objective reality based on cause and effect relationships is under serious pressure. So much so that formerly generally accepted models suddenly lost their validity in certain situations and are proverbially stopped by a “local reality”.
Causal relationships in economy and politics also become less and less relevant
Interestingly, a similar development can be seen in economy and politics. Who knew that the business model of successful companies would suddenly stop working and would be replaced by completely different mechanisms? Current conflicts such as the ones in Afghanistan or in Syria follow the same principle. Classic (military) approaches based on a causal chain of effects that were quite successful so far do not seem to be working anymore. In all these cases blind adherence to proven (planning) models mostly leads to a further deterioration of the situations instead of a development according to plan.
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SAP views strategy as a process and a result of distributed dynamic action
Strategy as Practice (SAP) tackles exactly this issue. Instead of wondering how a strategy should be formed, SAP dives into the activity of “strategizing”. Instead of specifying which steps and analysis are required in order to develop a strategy, SAP considers the discourse that enables, develops, and implements strategies. Therefore, SAP is leading to a social shift away from strategy as a mechanical construct of corporate planning. Instead, strategy is viewed as a result of distributed dynamic actions. What does this tell us for practice?
Strategy does not (only) occur at the top management level, but also distributed throughout the whole company
Recent SAP studies show that implementing strategies is a process distributed across the whole company. Workshops, presentations, meetings, and informal discussions play an important role. The challenge lies in allowing and structuring this form of “strategizing” in a manner that leaves space for new thinking but focuses all forces at the same time.
Strategy is always context-dependant and therefore never objective
The traditional understanding of strategy suggests that strategy is an objective result of a rational planning process. In contrast, SAP views strategy always as a result of an interactive process characterized by norms, rules, and rituals. Thus, strategy always also reflects the (subjective) expectations of all parties involved. The fact that disruptive developments are not always a part of these expectations is obvious. Including these developments, despite the tendency to prioritize well-tried methods over new approaches, distinguishes good strategy work.
It’s the tools (Porter’s five forces, SWOT etc.) responsibility to moderate, but not to dominate.
Strategy development tools usually contain information with instructions and indications when, where, and how they are supposed to be employed in order to achieve great results. SAP research shows, that application of such tools follows a completely different logic. Tool selection is less dependent on rational considerations and more on which tools are already known and accepted in the company. Instead of being employed in a “recipe” to develop a strategy, these tools are applied as a structuring and negotiation framework. Good application of such tools is characterized by flexibility and the courage to try out new things.
Strategy as practices was suggested for the first time by Richard Whittington (Saïd Business School, University of Oxford) in 1996. A large number of publications as well as its own community stresses the relevance of SAP as an independent approach in the field of strategic management.
Markus is one of the founders of CQ and leads trainings in the area of Management and Mechanical Engineering. He holds a Master and Doctoral Degree in Economics and Computer Science from the Technical University of Vienna and a MSc in Organisational Behaviour from Birkbeck College, University of London. Being a dedicated "Knowledge Worker", Markus has continued his career with various private sector assignments in the management consulting, automotive and mechanical engineering industry.