2.3 Planning, Crafting, and Emergent Strategies

Imagine that you are a professional basketball player and are playing in the national championship game. Most likely, before the game, the coaching staff will have created a plan – or strategy to win the game. The strategy will likely be based on hours of film and careful evaluation of your opponent. As the strategy is developed and planned, the coaching staff will have evaluated both the strengths and weaknesses of the opponent and compared those to your own team’s strengths and weaknesses. The purpose of the strategy would be to exploit and take advantage of the opposing team’s weaknesses in order to win the game.

While planning your team’s strategy is extremely important, notice that the entire process of designing the strategy takes place before the game even starts. For most coaches, careful study, analysis, and benchmarking before the game is key to success. Similarly, in the business world, most senior managers and executives plan their strategies long before they are implemented. In fact, when most people think of strategy, they often imagine a group of high-level executives sitting in a boardroom, using various analyses to better understand the organization and the direction it should go. Such board meetings often include an analysis of the industry and a thorough evaluation of rivals. As such, most managers would agree that strategy is a plan, or course of action, that the firm should follow. This approach to strategy is often referred to as planning strategy. In other words, planning strategy involves a careful analysis of rivals and markets to plan specific objectives, goals and courses of action.

While planning strategy is extremely important to organizational success, Henry Mintzberg, a professor at McGill University and one of the pioneers in strategic management, stated that some of the most important strategies aren’t in fact planned, but simply come about on their own and are crafted over time. For example, imagine that half way through the championship game, your team is behind by 20 points and failing miserably. Obviously, the predetermined – or planned – strategy was in fact, not a good course of action (or the opposing team’s strategy was simply better). Knowing that your team’s pre-determined strategy would be ineffective during the game was impossible to know until the game actually started. Under this scenario, should your team change its predetermined strategy or stay true to the plan? Are there adjustments that your team should make to the defense and offense? Suppose that your team began having success but that the success had nothing to do with your team’s predetermined strategy? Should you change your strategy mid-game so that your team will have a chance of winning? Henry Mintzberg refers to the process of learning, adapting and changing while engaged in business as the process of crafting strategy. In other words, crafting strategy is the process of developing strategy through action, learning, commitment, dedication and experience. Henry Mintzberg suggests that crafting strategy, instead of planning strategy, will do a better job of capturing the process by which effective strategies are developed and implemented.

When an unplanned strategy emerges, it is often referred to as an emergent strategy. In other words, an emergent strategy is a strategy the simply comes about on its own that was not expressly intended.

Essentially, emergent strategy is a strategy that comes about over time to deal with reality. The company either doesn’t have a clear set of goals or the emergent strategy doesn’t align with the original, outlined strategy. Examples are often cited of companies that started out in one line of work, failed, and changed to follow the money. 3M was originally founded as a mining company, but transitioned into Scotch tape, Post-It notes, and Scotch-Brite cleaning products. Another example is Groupon. Originally, it was founded as The Point, a website which allowed users with a common cause to unite into a more powerful group. Basically, no success. However, when a group got together with the cause of “saving money,” they enlightened the company leadership on a much better business plan-to offer an incredibly good deal every day to a local business, based on enough people signing up for it. Business could bring in a windfall of new customers or would unload extra inventory. The business became so popular that they hired 10,000 people in less than two years. No one in the original group strategized to create Groupon. Instead, their winning strategy emerged out of the market.