A short history of Strategy and foresight

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The 1960s were a time when society underwent profound transformation. It was the era of subcultures, emancipation, disintegration, emotion, and technological progress. The era had no limitations, and has earned such monikers as the “golden age,” the “years of lead,[1] and “the age of the student.” Yet what the ’60s represented, beyond all doubt, was an age of uncertainty.

The increasing upheaval challenged organizations of the time. Trying to lead with an unstable reality, they experimented with new logics. They institutionalized rigid management disciplines with the aim of creating structure in the midst of societal uncertainty. Planners became highly regarded in such organizations.

Companies created new budget departments and established, for the first time, mission statements. The goal was simple: to create a manageable condition, an intervention to push the future toward a state of order. They established their controllable, plannable and predictable illusion. It was the birth of the disciplines of strategic planning and strategic management.

Executives wanted to set a north, planning the details and decision making to achieve it. Strategic planning presented itself as the solution of the time. It set priorities, agreed on goals and adjusted actions to the new external challenges. But organizations abandoned the concept of planning as fast as they’d adopted it. The discipline was too stiff, too control focused. In an environment of escalating uncertainty, predictions failed to deliver.

Strategic planning was literally invalidated in the ’60s, ’70s and ’80s by socioeconomic shocks[2] caused by the Vietnam War, Arab oil crisis, the women’s and African-American civil rights movements, and the stock market crash. These social shifts led to increasing skepticism among the executive community. As a consequence, the Academy of Management also lost its interest in strategic planning in the 1980s. It was too inflexible and simplistic for the existing executive mindset.

When Henry Mintzberg published an influential article[3] in Management Science in 1978, he contributed to media hype, hastening the end of the era of strategic planning. He argued that the discipline was more strategic programming with narrow vision. Mintzberg presented a new logic, strategic thinking,[4] which avoided applying strategies from the past. He argued that his concept covered the missing future perspective by integrating critical judgment and intuition. But he was 30 years ahead of his time.

Strategic management substituted for strategic planning, advanced by Michael Porter in the ’80s and ’90s. His concept described management and allocation of resources to create and exploit a superior market position.

After the introduction of this new discipline, organizations shifted further away from strategic planning. They traded a future-centered approach for what we today know as resource management. With a budget- or cost-planning focus, strategic management spread fast in organizations and academia.

The success of strategic management widened the gap between practice and theory. Organizations asked for agile empirical research to prove the points of differentiation. Yet academia could not prove the implications of competitive advantage, arguing that more time would be needed to validate the complex assumptions of the research. Time was, unfortunately, a resource the organizations didn’t have. The conflict of velocity vs. research led to a challenging period for strategic management.[5] The gap became even bigger in later years, as organizations perceived new levels of velocity, uncertainty and complexity.

Over time, planning rigidity yielded to diversityExecutives saw diversity in society as a pool of new opportunities, rather than risks. Exploratory thinking and complexity were embraced. Executives, for the first time, learned the principle of human-centered “design.”

[1] Anni di piombo was a period of socio-political turmoil in Italy from 1960s into the early 1980s.

[2] Walter, Keichel. 1982 and & 1989

[3] This article was the starting point for Mintzberg’s book, The Rise and Fall of Strategic Management, published in 1994

[4] Henry, Mintzberg. 1994 p.107

[5] Curtis, Roney. 2010

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