Inception pack volume three: What is strategy?

2007

the planning lab (sthlm)

 What is strategy?
And how is it relevant to account planning?

the planning lab (sthlm) Inception pack

What is strategy?

• “We simply don’t know what strategy is or how

we can develop a good strategy”
(Markides, 2000)

• “Consultants and theorists that compete for

giving advice to companies cannot even agree on
the most basic question: what is strategy?”
(The Economist, March 20, 1993)

the planning lab (sthlm) Inception pack

 Four generic perspectives on strategy*
Intention of strategy
Profit maximising

Classic Evolutionary
Process
Planned Gradual

Systemic Processual

Pluralistic

the planning lab (sthlm) Inception pack *Whittington, R (2002) What is strategy - and does it matter?
The Classical perspective
Intention of strategy
Profit maximising
Strategy = a rational process
that includes rational analysis and
objective decision-making in order
to maximise long-term value
Porter

Ansoff
Classical Evolutionary
Process
Planned Good business Gradual
planning is required to
control internal and
external environment

Systemic Processual

Pluralistic

the planning lab (sthlm) Inception pack *Whittington, R (2002) What is strategy - and does it matter?
The evolutionary perspective
Intention of strategy The dynamic,
hostile and competitive
Profit maximising nature of markets makes it
difficult to plan for long-
Classical term survival
(rational and future-
oriented) planning is
Hannan & Freeman
irrelevant

Classical Evolutionary Williamson

Process
Strategy = day-to-day
Planned management for surviving Gradual
external circumstances

Systemic Processual

Pluralistic

the planning lab (sthlm) Inception pack *Whittington, R (2002) What is strategy - and does it matter?
The processual perspective
Intention of strategy
Profit maximising

Classical Evolutionary
Process
Cyert &
Future-oriented business
Planned March Gradual
planning is irrelevant

Mintzberg

Systemic
Neither markets nor Processual
organisational processes are
“perfect enough” for classical or
evolutionary strategies to be People are too different
adopted Stategy = a when it comes to interest,
pragmatic process of knowledge, attention, rationality and
mistakes, learning can therefore not agree on an
Pluralistic and compromises optimal plan

the planning lab (sthlm) Inception pack *Whittington, R (2002) What is strategy - and does it matter?
 The systemic perspective
Intention of strategy
Profit maximising

Classical Evolutionary
Other rational goals
Process profit-maximisation:
besides Definition of
professional pride, influence, stategy depends
patriotism, culture, religion
Planned on contextual Gradual
factors Whitley

Systemic Granovetter Processual

Competition
does not imply efficiency:
Strategic objectives depends
markets can be manipulated;
on the specific social system in
society has other criterias for
which the strategy is created
corporations than just profit-
Pluralistic
maximisation

the planning lab (sthlm) Inception pack *Whittington, R (2002) What is strategy - and does it matter?
Overview

Classical Processual Evolutionary Systemic

Strategy Formal Crafted Effective Encapsuled

Objective Profit-maximisation Unclear Survival Local approval

Internal (politics and

Focus Internal (plans) External (markets) External (society)
perceptions)

Processes Analytical Negotiation/learning Darwinist Social

Economics Economics
Influences Psychology Sociology
Military Biology

Cyert & March, Hannan & Freeman,

Important names Chandler, Ansoff, Porter Granover, Whitley
Mintzberg, Pettigrew Williamson

Development 1960s 1970s 1980s 1990s

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 What does this imply for agency planning?

the planning lab (sthlm) Inception pack

 social anthropologist

bad cop (to account management’s/ strategic thinker/strategy developer

client service’s good cop)
market researcher

target audience think piece polemicist

representative/voice of the
consumer
writer of the creative brief
insight miner
npd consultant
data analyst

brainstorming facilitator
knowledge applicator

qualitative focus group moderator

media/communications planner

soothsayer/futurologist
information centre

The role of planning again...

the planning lab (sthlm) Inception pack Source: “What is account planning” (2001), Account Planning Group UK
In other words: most planners need to
have a clue about strategy

Brand strategy

Business strategy

Communications

An understanding of the client firm’s strategic perspective allows us to

better grasp the potential and limitations of the branding and
communications work that we recommend

the planning lab (sthlm) Inception pack

The classical perspective: control everything

• Possible to control external environment = we can control the customer’s

attitude/behaviour through marketing communications
• Marketing communications decisions will be made through quantitative analysis
and modelling
• Masters of our own destiny when it comes to brand and advertising management
• Typical separation between strategy (“brain”) and reality (“hands”)

the planning lab (sthlm) Inception pack

The evolutionary perspective: sell or die

• Marketing communications decisions are for short-term survival

• In the long-term we might be dead!
• Intense focus on short-run sales, not long-term brand-building

the planning lab (sthlm) Inception pack

The processual perspective:
win some, lose some

• A trial-and-error approach to marketing communications: some consumer

attitudes and behaviours things we can influence, some we cannot
• Continuous improvement of brand and advertising management
• Certain degree of risk-taking in decision-making allows for innovative and
creative ways of reaching customer

the planning lab (sthlm) Inception pack

The systemic approach:
please follow the rules of the game

• Consumer attitudes and behavior are confined to social systems with given norms,
values, roles, culture, ethics, etc.
• Limitations to what marketing communications can do in terms of market share - the
consumer culture rules
• Other “rational” reasons for marketing communications than pure profit-
maximisation

the planning lab (sthlm) Inception pack

Conclusion

• Try to agree on what strategy is when you’re discussing strategy/strategic issues

with a client

the planning lab (sthlm) Inception pack

the planning lab (sthlm)
theplanninglab.typepad.com
theplanninglab@gmail.com