ING Asks, “What Is Strategy?”

ING— Put ten managers in a room and ask them to define their company’s strategy in a sentence and you’d get ten different responses. This is not usually for any lack of understanding as to what their company is doing, but rather due to the interpretation. Most managers struggle to explain to each other what strategy means because what needs to be done is typically expressed in (arbitrary) notions, which are either inconsistent or do not properly explain the strategic direction of a company using real information.

According to the strategic management professor Richard Rumelt at the UCLA Anderson School of Management, strategy starts with identifying changes. How do we improve our existing positions given the dynamics around us? For this, we have to take a position; we have to take a view which in many cases involves taking risks.

Strategic thinking starts with identifying changes around us, which will determine where we have to ‘go’ and what the options are given a changing world. For instance, should a telecom company invest in high-bandwidth opportunities of 3G, or not? Should a company invest in or divest from country X or Y? It’s really about seeking opportunities and identifying threats, and less about individual concepts such as distribution, cost-cutting, etc, which Rumelt calls “doorknob polishing strategies”. Read article.