A short history of strategy and strategic foresight

The 1960s were when society underwent a profound transformation, marking a significant turning point in history. 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, which left a lasting impact on future generations.

The increasing upheaval challenged organizations, forcing them to adapt and evolve. Trying to lead with an unstable reality, they experimented with new logic. They institutionalized rigid management disciplines to create structure amid societal uncertainty. Planners became highly regarded in such organizations, crucial in navigating the chaos.

Companies created new budget departments and established mission statements for the first time. 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 strategic planning and management disciplines, laying the groundwork for future business practices.

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 planning concept as fast as they’d adopted it. The discipline was too stiff, too control-focused, and unable to keep up with the rapidly changing world.

Strategic planning was invalidated in the ’60s, ’70s, and ’80s by socioeconomic shocks[2] caused by the Vietnam War, the 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. Consequently, the Academy of Management also lost its interest in strategic planning in the 1980s, searching for alternative approaches that could better address the complexities of the time.

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 a 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, and his ideas would take years to gain widespread acceptance.

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, providing a new framework for organizations to follow.

After introducing this new discipline, organizations shifted 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, gaining traction as a new way to approach business challenges.

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, highlighting the need for continuous adaptation.

Over time, planning rigidity yielded diversity. Executives saw diversity in society as a pool of new opportunities rather than risks. Exploratory thinking and complexity were embraced. For the first time, executives learned the principle of human-centered “design.” This shift in perspective paved the way for more inclusive, innovative, and adaptive organizational strategies, emphasizing the importance of understanding and responding to the ever-changing environment.

FAQ

Question: What significant shift did the 1960s represent in society?

Answer: The 1960s marked an era of profound societal transformation, characterized by subcultures, emancipation, disintegration, emotion, and technological progress, all contributing to uncertainty.

Question: What management disciplines were born in the 1960s amidst societal uncertainty?

Answer: The 1960s saw the birth of strategic planning and management, as organizations aimed to create structure and predictability amidst societal uncertainty.

Question: Why did organizations abandon the concept of strategic planning?

Answer: Organizations abandoned strategic planning as it was found to be too rigid, control-focused, and unable to keep pace with the rapidly changing world.

Question: What significant contribution did Henry Mintzberg make to strategic planning?

Answer: Henry Mintzberg introduced the concept of strategic thinking in a 1978 article, arguing for a more intuitive and future-focused approach than past-focused strategic planning.

Question: How did organizations evolve their approach to strategy in response to societal changes?

Answer: Organizations shifted from a rigid planning approach to embracing exploratory thinking and complexity. They began to understand the principle of human-centered design, leading to more innovative and adaptive strategies.

References

[1] Anni di piombo was a period of socio-political turmoil in Italy from the 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