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Maximizing present capabilities and developing new ones in anticipation of the future characterize the high performer in all fields of endeavor. Athletes train, compete, and train further to build skills for future events. Armies fight battles deploying whatever materiel and personnel they have at their disposal and, in more peaceful times, develop new military strengths to prepare for battles still unfought.
Management differs from these examples in one important respect: running a business and changing it are not sequential but parallel activities.1 Even armies are seldom on full alert all the time, at least not for limitless periods. War and peace are punctuated, providing the breathing space to build and regroup. Managers enjoy no such luxury, competing today and preparing for tomorrow with no let-up on either front.
Until recently, most organizations have successfully managed to run and change their businesses under the umbrella of a single strategy. As long as competition was stable and change moderate, this approach proved adequate. Indeed, it characterized most business activity in the long period of expansion following World War II and lasting until the early 1970s. Despite a few nasty jolts and outbursts of intense competitive activity, a “business as usual” philosophy prevailed. Not so today. As competition for markets has heated up and change has become pervasive, a single strategy encompassing present and future provides the basis neither for running the existing business effectively nor for managing change.
The idea of dual strategies is not new. In 1968, a farsighted publication of the Boston Consulting Group revealed that the planning practices of a sample of their large client companies were of two distinct types: “Action planning” was used to plan the necessary present and future actions to ensure “operational” success; “planning for strategic change” was used to improve the organization’s capability to have current major decisions “properly weighted by in-depth study of long-term environmental changes.”2 In many cases, the latter approach meant changing traditional assumptions and policies to enable the organization to adapt to future conditions. Curiously, the distinction, articulated nearly thirty years ago, received little attention until recently. One reason may be that times were less turbulent than today, and the need to distinguish between present and future strategies less evident.
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1. The ideas in this article were first introduced in:
D.F. Abell, Managing with Dual Strategies: Mastering the Present; Preempting the Future (New York: Free Press, 1993).
2. C.O. Rossetti, Two Concepts of Long-Range Planning: A Special Commentary (Boston: Boston Consulting Group, 1968).
3. Original source unknown. I am indebted to J.B.H.M. Beks, formerly corporate director of finance, Heineken, who brought this quotation to my attention.
4. T. Peters, Thriving on Chaos (New York: Harper & Row, 1998).
5. FirstDirect Branchless Bank is a wholly owned subsidiary of the U.K.-based Midland Bank. It specializes in high-service telephone banking with 24-hour, 365-day availability.
6. T. Levitt, “Marketing Myopia,” Harvard Business Review, volume 53, July–August 1960, pp. 45–56.
7. The research, originally carried out in 1991 and 1992, included interviews with senior management in ten companies: Aegon, Bertelsmann, Caterpillar, Ericsson, Heineken, Imperial Chemicals Industries, Nestlé S.A., Procordia, Schering A.G., and Sulzer Brothers.
8. For this and succeeding quotation, see:
W. Bennis, “The Split Brain at the Top,” Conference Board Commentary, Across the Board, volume 26, September 1984, pp. 10–12. The commentary was excerpted from:
W. Bennis, Why Leaders Can’t Lead: The Unconscious Conspiracy Continues (San Francisco: Jossey-Bass, 1989).
9. R.F. Domeniconi was one of the senior executives at Nestlé interviewed for the research project described in reference 7.
10. P. Strebel, Breakpoints (Boston: Harvard Business School Press, 1992).
11. R.S. Kaplan and D.P. Norton, “The Balanced Scorecard — Measures That Drive Performance,” Harvard Business Review, volume 70, January–February 1992, pp. 71–79.