Strategy Is Partly Proactive and Partly Reactive

A company’s strategy is typically a blend of proactive actions on the part of mana­gers to improve the company’s market position and financial performance and as-needed reactions to unanticipated developments and fresh market conditions.

The biggest portion of a company’s current strategy flows from previously initiated actions and business approaches that are working well enough to merit continuation and newly launched managerial initiatives to strengthen the company’s overall position and performance. This part of management’s game plan is deliberate and pro­active. Not every strategic move is the result of proactive plotting and deliberate management design.

A portion of a company’s strategy is always developed on the fly. It comes about as a reasoned response to unforeseen developments.

Crafting a strategy involves stitching together a proactive/intended strategy and then adapting first one piece and then another as circumstances surrounding the company’s situation change or better options emerge – a reactive/adaptive strategy. A company’s strategy should always be viewed as a work in progress.

On occasion, fine-tuning the existing strategy is not enough and major strategy shifts are called for:

1. When a strategy is clearly failing and the company is facing a financial crisis ?
2. When market conditions or buyer preferences change significantly and new opportunities arise?
3. When competitors do something unexpected?
4. When important technological breakthroughs occur?
5. Industry environments characterized by high-velocity change require rapid strategy adaptation.

 CORE CONCEPT: Changing circumstances and ongoing management efforts to improve the strategy cause a company’s strategy to emerge and evolve over time — a condition that makes the task of crafting a strategy a work in progress, not a one-time event. A company’s strategy is driven partly by management analysis and choice and partly by the necessity of adapting and learning by doing.

The constantly evolving nature of a company’s situation puts a premium on management’s ability to exhibit astute entrepreneurship. Masterful strategies come partly, maybe mostly, by doing things differently from competitors where it counts. Good strategy making is inseparable from good business entrepreneurship.