Strategic Drift

Strategic drift occurs when strategies fail to address the strategic position of the organization and
performance deteriotes. It occurs when a company, even one that has enjoyed considerable success,
responds far too slowly to changes in the external environment and continues with the strategy that once
served it very well. And when the companies base their development on cultural and historical influences
and on their past and foundations.
The dotted line shows how fast the environment is changing while the solid line shows that the strategy of
the company in lagging behind the environmental change. The first phase is incremental change.
Organizations like to maintain status quo and they keep on following the same strategies or bring small
incremental changes in them. But soon these strategies fail to address the external trends and performance
deteriotes. To improve the performance a period of flux happens in which the management tries to gain
back its original place. After the period of flux 3 things can happen. Either the organization dies or it gets
taken over by another company. 3 thing is transformational change in which fundamental changes in
strategies take place and the company gets its position back. Though this is very rare.
An example of strategic drift is Motorolla. Other examples of strategic drift include myspace who was a
pioneer in social networking. The reason it failed was because of its failure to respond to changes in its
external environment. It failed to innovate and offer better service than facebook. Let me ask you two
questions:
what device do you increasingly use to take photos?
when you want to look at photos of yours or your friends, what do you do?
If you are like me the answers are:
smartphone;
facebook
Yet even in 2011 the CEO of Kodak was assuring everyone that its strategy will bear fruit.
Marks n Spencer experienced great periods of success till 1990s. However as 1990s approached
competition emerged and fashion took its place over practicality. The companys culture restricted its
ability to respond to changes in the external environment. However, the company appointed a new CEO
and went through some big changes to win back the loyalty from customers.
Strategy lens
Overall, strategy is likely to come from a variety of sources and a combination of the above techniques.
Johnson and Scholes talk about 'strategic lenses', which are three ways of viewing what can be meant by
the term 'strategy', They are the four angles from which strategy can be viewed and implemented on a
corporate level.
Strategy as design
This is the view that strategy formulation is a rational, logical process where information is carefully
considered and predictions made. Strategic choices are made and implementation takes place. Essentially
this is the same as the rational planning model. the idea that strategy is formulated by top management
through careful and objective analysis and planning and implemented down through the organization. on
two basic principles. The first is that managers are, or should be, rational decision makers. The second is
that they should be taking decisions about how to optimize economic performance of their organizations.

Typically when we define strategic management the first things that come out form mind are planning,
setting objectives, analysis, etc., these words are associated with the design strategy.
Strategy as experience
In this model, strategic development is the continuous adaptation of past strategies based on
experience.[1] In this view strategy is greatly influenced by taken for granted assumptions (culture) and
involves large levels of bargaining and negotiation. Strategy as Experience carries with it a risk of the
effect known as strategic drift as a result of failing to act upon environmental changes by being too 'path
dependent' on past activity. People, managers included, make sense of new issues in the context of past
issues; they are likely to address a problem in much the same way as they dealt with a previous one seen
as similar. The reasons of this are; Cognitive bias is inevitable, the future is likely to be made sense of in
terms of the past.
Strategy as Ideas
Ideas lens is helpful in explaining the sources and conditions that help generate innovation in
organizations; it sees strategy as the emergence of order and innovation from the variety and diversity
which
exists
in
and
around
organizations.
The design lens provides a view of organizations as systems or machines and the experience lens as
cultures.
Variety
Variety potentially exists for all organizations at different levels and in different forms. There is an everchanging environment, there are different types of businesses, there is a variety of different groups and
individuals and their experience and ideas within an organization and there are deviations from traditional
ways of doing things. Such variety and its spawning of change at different levels mutually reinforce itself.
Context
The evidence is that innovation comes, not from the top, but quite likely from low down in an
organization. People interpret issues in different ways according to their experience and may come up
with different ideas based on personal experience. The greater the variety of experience, the more likely
there will be innovation. The more the boundaries between the organization and its environment are
reduced,
the
more
innovation
is
likely
to
occur.
Within organizations what matters is interaction and cooperation to encourage variety and the spread of
ideas.
If innovation matters, questioning and challenge is more important than consensus.
As an example of the application of the three lenses, consider that a managers considers to buy a car. If he
keeps the design lens in mind than he will review the options systematically. He obtained brochures for a
range for a range of luxury car makers. Identified the factors that were important to him and considered
all performance indicators for each car. The analysis told him that a BMW is better than a jaguar.
But he didnt like the result. As his experience lens tells him the opposite. The experience lens tells him
that he has always driven jaguar and it had a special English charter that suited him.
But he ended up buying an open top Mercedes sports. He thought that he needed to liven up his image
and he liked the idea of driving it on holidays. So what happened is that idea lens took over.