The purpose of strategy is to change an organisation’s trajectory

In this short video David Trafford and Peter Boggis discuss the essential purpose of strategy.

Unfortunately the term ‘strategy’ is often overused and frequently misused, to the extent that it has lost any meaning in most organisations today. Strategy should not be confused with ambition or planning. The essence of strategy are the choices that are made. And these choices are only strategic if the choices made are difficult, if not impossible, to undo. The rest is planning, which can be changed – albeit at a cost.

David and Peter’s view is that the purpose of strategy is to change an organisation’s trajectory. A change in trajectory that takes it to an improved future, rather than its default future. Leaders should develop and execute strategy when they confront their organisation’s default future and embark on a different trajectory. It’s about understanding the default future you’ll get if you do nothing, exploring alternate futures and deciding which trajectory to take.

One example given is that of General Electric (GE), which in 2015 announced a significant shift in trajectory. This shift involved selling many of its biggest businesses – including Financial Services – to focus on building an industrial infrastructure business. GE became a business focused on power generation, locomotives, jet engines, and oil and gas production equipment. It was a business underpinned by a data-analytics industrial internet platform. Initially, over a billion dollars was committed to this shift of trajectory. While the early signs looked good, a late-2018 article by The Wall Street Journal suggests that GE did not confront its default future soon enough or hard enough.

Watch David and Peter’s video.

For further information see:
The Purpose of Strategy: To Change an Organisation’s Trajectory

Watch the next video in the series, where David and Peter discuss why organisations find it difficult to change.