It is useful to separate out three different aspects of strategy formation, based on the degree to which each is subject to direct control.
Things we have (virtually ) no control over : Strategic Context
Sometimes referred to as the “Strategic Context” this refers to all those things that are outside of our direct control. Strategy formulation recognises these things and articulates them – as constraints, or as inspiration and challenge. Headings typically include:
- Macroeconomic trends (for example, rise of influence of China, decarbonisation, global warming, rise of consumer and investor consideration of social issues etc…)
- Industry trends (Activity of competitors, customer expectations, ecosystem development, payment platforms, etc)
- Technology trends (for example, artificial intelligence, data analytics, internet-of-things, cyber threats, emerging software architectures, …)
Things we assess: Strategic Choices
Organisations make choices and “take a position” within the strategic context. These are always things that are within our control to determine (or at least strongly influence). These could include, for example, product range, channels to market, proposed Merger, Acquisition and Divestment activity, Key Performance Indicators , approach to recruitment and retention, etc.
(See also the “Business Initiative” which makes explicit the enabling means to enact the choice as well as the aspirational positioning)
Things we seek Informed Consent to: Strategic Proposition
One purpose of strategic planning is to align around potential courses of action and to secure necessary investments.
A strategy that only sets an aspiration but doesn’t include anything about what it would take to achieve has very little value. Specifically, no executive could give Informed Consent to an aspiration that doesn’t include a description, albeit high level, of what it would take to achieve.