Emergent Strategy

What is Strategy?

There have been many discussions

over the past years around the concept of strategy. Management Guru, Michael Porter defines strategy as the direction  a company should take. This definition expands the scope of strategy into wider array of possible sub definitions. Lets try to break this definition into understandable elements.

1) Long Term view on the future of the company
2) Does not cater to a set of actions but governs where actions should lead to
3) Strategic Apex (Top Management) must drive strategy

Examples of Strategies

Let us see some examples of strategies companies have adapted to get an understanding of the practical adaptation of the strategy concept. 

3M's Strategy is to Innovate.

3M is known for innovation. It has been among the top 5 most innovative companies for years. This strategy is governed by underlying strong KPIs like, 33% of the company revenue should be from products introduced in the last three years. These types of KPIs, directs the company towards the strategy to Innovate

Facebook strategy is to connect people. Any new project Facebook team undertakes will be driven with the direction to connect people. When they introduced the social tag, the intention was to connect people in the photograph. Like wise the strategy provides direction to a company.

Emergent Strategy

The traditional definition of strategy was challenged when Mintzberg came up with the concept of Emergent Strategy. Today's environment is highly volatile, no company can have a strict strategy. So Mintzberg view was strategy is not a hard and fast rule. It can vary depending on the environmental conditions.

Hard economic conditions would push a company to revise the Pricing policy, the product policy. In Sri Lanka during the times Economic Turmoil most of the packet products which used to be 500g or 1kg went into sachet small packets to make it affordable to the wider majority of people. I am taking Rin as an example. Rin is mainly targeted to medium class and it is considered as a high end product compared to other washing products. But with the economic turmoil it went with sachet products which expanded its market grasp to lower income families. 

Like wise Mintzberg insisted on the concept of strategies being emergent. Honda introducing bikes is another classical example of emergent strategy. PESTEL factors will have an impact on the trajectory of the modern organization and these factors will influence the modern organization to sway from the original destination to continue with the organizations effort to maximize shareholder wealth.