Strategy is one of those words that is often overused and frequently misused. What do we really mean by strategy and what is its real purpose? In our book Beyond Default my co-author and I argue that the real purpose of strategy, particularly corporate strategy, is to change the trajectory of an organisation, from one leading it to its ‘default future’ to one that takes it to an improved future. By default future we mean the place your organisation will end up if you take no action other than that currently planned. This definition of strategy is equally valid for individuals, communities, societies and countries as it is for organisations.
The process of defining strategy therefore involves understanding what the default future might be, and more importantly the forces that are determining the current trajectory. Some of these forces are exogenous in that they originate from outside your organisation and therefore outside of your control. Examples include global economic trend, regulation, climate change and demographics. Others will be endogenous as they originate from within your organisation and are therefore under your control. Examples include organisational structure, processes, IT systems, organisational capabilities, mindset and governance.