Strategy's Scope

Strategy’s Scope

In our last post, we discussed how the lens of strategy’s perspective – developed across three organizational dimensions of internal capacity, environmental influences, and an organization’s history – provides a more complete and sophisticated foundation from which to assess an organization’s strategic potential. We suggested that effective strategy emanates from a perspective that pushes typical organizational horizon lines much further out, not only forward into an organization’s future, but also, and importantly so, backward and deeper into an organization’s past. In this post, we’ll build on that discussion, but through the lens of strategy’s scope. We suggest, as with the need to think further fore and aft in time, effective strategy crafting also demands a broadening and opening up of typically held organizational boundaries. To make that case, let’s first consider the scope and boundaries of organizational activity and planning.

The Boundaries of Activity. As we discussed earlier, every organization in the world moves inexorably and unavoidably forward into the future. And in this relentless movement, day-by-day, month-by-month, organizations therefore must and do act upon the world. They put product into the market, they develop new ideas, pay salaries, secure supplies, train employees, etc. Even organizations that might choose to do nothing for whatever reason, in that very choice itself, act. And typically we call this set of actions or activity an organization’s “operations”; it’s the total set of “stuff” that organizations do.

Figure 4 showing scope and boundaries of organizational activity.

The scope of organizational activity then is primarily concerned with the present, with the here and now. And because of this, its boundaries (or purview) rarely extend outside of, or beyond these present concerns. The scope of an organization’s activity can, to a certain extent, reach into the near-term future – activities put irrevocably into motion today may occur tomorrow, or even next week (the supply invoice that takes a few business days to transact, the new product line that launches early next week – but not significantly so. Similarly, organizational activity can have some connectivity with the organization’s immediate environment, but rarely as far as operations or activity is strictly concerned, is that connectivity very relevant or long-lasting. Operations are first and foremost about doing. And as such, we can imagine the scope and boundaries of organizational activity as thus: not too concerned about much beyond the near-future, not at all concerned with the past, and not too concerned with the organization’s external environment, beyond those things which may influence activity directly, such as traffic or weather conditions slowing deliveries, flu bugs cutting productivity, and supply chain backlogs. Activity exists in the present moment, and at best it may be tactical as opposed to strategic. When activity begins to consider the future, we step into the realm of planning.

The Boundaries of Planning. The scope of organizational planning, in contrast, is very much about tomorrow and beyond, and its boundaries therefore necessarily extend and exist well outside those of ordinary organizational activity. Planning’s most important purpose is the preparation of organizational activity. Planning keeps an organization on its intended track, forecasting and securing the resources necessary for desired productivity rates, preparing the landscape ahead for intended delivery of goods, positioning workforce capacity for projected skill and experience requirements, and so on. Consequently, where an organization’s march through time is concerned, “the future” is a more meaningful term to the planner than simply “tomorrow”. Tomorrow certainly matters, but so too does next week, next month, next year, and, where long-term planning is concerned, even the next few years. Full disclosure, we’ll also assert that there is an element of planning’s scope that pushes its boundaries backward a bit in time as well. We will discuss in greater detail soon.

Planning’s scope also broadens much further into an organization’s environmental context. Relevant environmental influences consistently matter to the planner. Weather conditions or logistical constraints necessarily affect an organization’s future activity and planning will work to mitigate these effects. Further out ahead, relevant environmental conditions that will change or may even appear to be changing also fall within planning’s purview. A new competitor seeking to acquire market share, a required resource that may be facing shortage conditions next season, or an opportunity to collaborate with another company on a new product, are three examples of the sorts of environmental issues that lie well within planning’s scope but are beyond the realm of organizational activity.

Figure 5 showing the extended scope and boundaries of organizational planning.

One definition of strategic planning we’ve seen is adapted from Mintzberg:

Consistent, focused behavior over time adapting in response to changing conditions.

Regardless of the precise words you might prefer, the scope of organizational planning, determined by planning’s purpose both to keep an organization on its intended track and to continue driving the organization toward its desired objectives, as well as the boundaries this scope implies, are necessarily broader and further out in comparison to those of organizational activity. Planning and activity, however, need to exist in and endless dance of informing each other and adapting as the organization’s internal and external environments shift and change over time.

The Boundaries of Strategy. Now we begin to get to our key points on strategy. Strategy is often misidentified as something that is merely important or something that has to do with planning for the future. While these may both be true, the boundaries of strategy are more expansive. Strategy’s scope pushes even further fore and aft, and wider into the environment than that of planning. Strategy’s focus, or perhaps more accurately its intentional lack thereof, changes the basic shape of strategy’s purview significantly.  

We have already made the case that the nature of planning’s domain is about identifying the probable, and preparing organizational activity for actual execution paths. Furthermore, the planning realm tends to be defined or guided by resource availability, even anticipated resource availability, all of which is to say that planning exists in the ever-present reality of resource constraints. Planning’s purpose is to move future ambiguities toward and into clarity.

In contrast, strategy lives and dare we say even thrives in ambiguity. Strategy is about identifying multiple possibilities and discerning from them, those which are better probabilities than others, from a standpoint of building long-term organizational advantage moving forward. We like Jeff Bauer’s insight about the future, which he laid out in Upgrading Leadership’s Crystal Ball – forecasts like clouds of probabilities of future possibilities are the strategist’s handiest tool, especially as uncertainty increases.

An important aspect in adjudicating among these alternate futures is a strategic understanding of organizational capacity informed very much by its past. What new markets or products should we consider in the coming decade? What is the nature of the next generation’s workforce expected to be, and how will that come affect or change our organization in the future?  

Figure 6 comparing the horizons and boundaries of organizational strategy to planning and activity.

Strategy’s horizons and boundaries extend well beyond the realms of organizational planning and organizational activity. And indeed, effective strategy can and should not shy away from existing in tension with planning perspectives. Consequently, just as strategic perspective pushes the horizon lines further forward and back, so too does aperture of strategy’s scope widen compared to planning’s. Moreover, unlike planning’s scope, the further out in front, the broader out strategy’s tends to widen. In strategy’s domain, the environmental influences on the periphery of an organization become more meaningful and worthy of attention the further into the future the strategist looks.  

Next week, we’ll examine the implications these observations on boundaries and horizons have on how organizations move forward. Strategy’s process is necessarily different from planning’s or activity’s. We’ll also include some useful prescriptions implied from all of this.