There are three broad ways to build a strategy, and most organisations are using one of them without ever having consciously chosen it. Which is a shame, because the choice matters rather a lot.
Planned strategy
The traditional approach, and still the most common. A fixed strategy formed as part of the annual planning cycle, usually at the top of the financial year. Targets for the next twelve months, based on last year's performance and adjusted for corporate objectives - hold market share, break into a new sector, that sort of thing.
It has real virtues. It keeps long-term objectives visible. It's legible to a board.
But its weakness is fatal in the wrong conditions: it gets stuck to rigidly, even as the market and the business change around it. Signals get ignored in pursuit of an objective that may no longer make sense. Planned strategy assumes a linear path from A to B in a world that stays still - and the world does not stay still.
John Kim of Goizueta Business School makes a sharper point still. It's hard to hold a consistent vision when the C-suite is turning over every few months, so strategies get muddled between too many hands. And by the time a strategy reaches the ground floor to be executed, things have usually moved on - and the market rarely responds the way you expected.
Emergent strategy
The opposite pole. A strategy that forms reactively, as a pattern of responses to what's actually happening, without a fixed goal driving it. Henry Mintzberg described it as a pattern of action that develops over time in the absence of specific mission and goals - or despite them.
It thrives in volatile markets, because it isn't constrained by the formal planning apparatus. But it demands a great deal from an organisation: freedom from bureaucracy, a team genuinely willing to take risks and tolerate failure, and a leadership team that's brave, aligned and steady.
Most firms who think they're doing emergent strategy are, I'd gently suggest, doing something else. Reacting to events without a goal isn't emergent strategy. It's just reacting to events.
Reacting to events without a goal isn't emergent strategy. It's just reacting to events.
Active strategy
The blend, and the one we use at Distinction - both with clients and on ourselves, which feels like the honest test of whether you believe in something.
Active strategy lets you plan ahead with clear objectives while staying flexible enough to respond when the ground shifts. The mechanism that makes it work is a rhythm: you review every ninety days. That cadence is short enough to catch a change while it's still an opportunity rather than a crisis, and long enough that you're not rewriting the plan every fortnight.
External events or an internal restructure may mean a long-term objective is no longer feasible. Under a planned strategy, you'd find that out at the year end. Under an active one, you find out in the quarter, and you do something about it.
So which should you adopt?
Here's the honest answer, and it's less tidy than a framework would like.
The most successful strategies usually emerge from a series of management decisions made in response to a changing environment - not from slavishly following the plan drawn up in January. But that isn't an argument for having no plan. It's an argument for holding the plan lightly.
2020 settled this debate for a lot of people. Almost every business had to adapt the strategy it started the year with. The firms that coped weren't the ones with no plan, and they weren't the ones who stuck to theirs. They were the ones who could tell, quickly, that the plan needed changing - and had a mechanism for changing it that didn't require an act of God.
That mechanism is the whole point.
The question
When did you last formally revisit your strategy - not report against it, but genuinely ask whether it still made sense? If the answer is "at the annual planning day", then you have a planned strategy whether you meant to or not, and the market has had twelve months to move without you noticing.
Worth a conversation? Book a short discovery call with the team at Distinction - no pitch, just an honest read on how your strategy actually works in practice.
