Strategy or chaos: What do you choose for your company?

• 18.02.2025.
• News, Management

Strategy is not just a plan - it is direction, vision and consistency in the implementation of decisions. However, many companies fall into the trap of short-term solutions and improvisation, which leads them to chaos and stagnation in the long run. Find out how strategy evolved from ancient Greece to modern business models - why are proven strategic planning models, such as those emphasized by Andreja Fazlić, essential for sustainable growth? And what role does organizational culture play in all of this?

“Culture eats strategy for breakfast, lunch and dinner. Culture is nothing but all the behaviors you can see in a company. It's all culture - how something is done!   
Now, you can write in the strategy, I don't know what, if your behaviors are not supportive of that strategy - nothing will happen." says Ivica Vrančić.   
  
And it goes without saying that I agree. Without a supportive culture, strategy remains just a letter on paper.  
  
You probably know a company/s that looks great from the outside: financial results are good, they are expanding and growing. But when you get close, interact, you feel that something is not right. There is no real direction, employees work each for themselves, as if they are not part of the same team. Instead of building stability and future together, they put out fires individually. One simply feels the dissonance.  
  
If you notice uncertainty among teams and fragmented communication, it's time to review and, if necessary, revise the strategy (and culture) of your business. Stable business is not built on short-term successes, and growth without a clear strategic framework is a dangerous illusion. Without facing reality, changing behavior and strategic adaptation, no amount of technology and tools will improve your business and stimulate growth. 

 

From ancient Greece to digital transformation - how strategy was developed  

Strategy, as a concept, has its roots in Greece, where around 508-507 BC formed a war council of ten strategists in Athens. The word "strategos", meaning general, comes from the Greek words "stratos" (army) and "agein" (to lead). In parallel, Sun Tzu in the book "The Art of War" emphasizes the importance of detailed planning and avoiding direct combat; principles that still form the basis of strategic thinking today. With the development of society, strategy has come a long way - from the military arena to the business world.  
  
In the 18th and 19th centuries, mass production and the optimization of production processes were key topics of the economy. In that period, pioneers of scientific management of organizations such as Frederick Taylor laid the foundations for the standardization of work tasks. During this period, the bureaucratic model of organizational structure, as defined by Max Weber, established hierarchy, rules and standardized processes that enabled greater efficiency of large systems (economies of scale), but the real strategy has not yet received its clear face. 
 
After the Second World War, the first formal strategic plans appeared. Companies began to use SWOT analyses, competitive analyzes and long-term plans to deal with more complex market conditions.  
 
Beginning in the 1960s, top managers of multinational companies such as Chester Barnard of AT&T and Alfred Sloan of General Motors pointed out the necessity of a strategic approach to business. It was a time when it became clear that an effective strategy is not just an add-on, but the cornerstone of a high-performance organization.  
   
In 1962, Alfred Chandler defined strategy as "determining the fundamental long-term goals of the company and adopting the direction of actions and allocation of resources necessary for their realization", which set the first academic framework. 
  
The development of strategic management in later years experienced a revolution thanks to the works of Michael E. Porter, whose models such as: five forces of competition, value chain and strategic positioning, enabled in-depth analysis and management of global business competitiveness.  
  
On the other hand, Henry Mintzberg emphasizes the importance of "emergent strategy", pointing out that real strategy often develops spontaneously through practice, adaptation and experience, and not exclusively through formal planning (deliberate strategy).   
According to his theory, there are five organizational structures that companies can adopt to successfully conduct business operations. The most suitable structure for you will depend on the industry, length of business, goals you have set and other factors. I will write more about his theory in future texts, because I consider it extremely suitable and useful for small and medium-sized businesses. 

 

What is strategy?    

There are many definitions, and below I will focus on Porter's evergreen from the Harvard Business Review, which simply explains what strategy really is and why it is so important through the following points:  

• Strategy is not what many people are focusing on today - improving operational efficiency through cost reduction, quality improvement and speeding up processes. Although undeniably useful, operational excellence alone does not deliver a sustainable competitive advantage. Why? Because it is easy to copy it (which many do!), losing i.e. thereby missing the opportunity for clear differentiation of their business.   
• The right strategy is based on creating a unique and valuable position, one that is achieved by deliberately choosing activities that are difficult for competitors to replicate. Examples such as Southwest Airlines and Ikea confirm that the key lies in a different approach: a different process design, service offering, work organization and customer relationship. This creates a specific value that cannot be easily copied! 
• A successful strategy requires clear decisions! You cannot be everywhere and address everyone at the same time. You have to decide what to do and what not to do, thereby achieving focus and clear differentiation. These compromises prevent identity dilution and make it difficult for competitors to simply copy elements of your business.  
• A real competitive advantage arises when all activities within the company are coordinated and complement each other. This synergy, or "fit", enables the creation of an integrated system in which improvement in one business segment positively affects the entire organization. Such a system is difficult to imitate because success is the result of a carefully designed system and is built on a coordinated series of decisions. 
• Often internal pressures, such as the desire for constant growth or the fear of making difficult decisions, lead to a dilution of strategy. Leaders play a key role in defining boundaries, maintaining focus and continuously communicating strategic direction within the organization. Clarity in decision-making helps connect business goals, people and technology into a cohesive system. 
    

Therefore, strategy is, along with operational excellence, the process of creating a unique position through:    

• Specific activities that the competition can hardly copy.  
• Clear compromises that define what you will do and what you won't do.   
• An integrated system (fit) that connects all parts of the organization.    

 

The essence of strategy is choosing to do things differently than your competition!  
  
As with definitions, there are several global and recognized strategic planning models (strategy framework), and some of the most famous are: Potter's five forces, SWOT analysis, NOISE analysis, McKinsey 7S framework, PESTEL analysis, Blue ocean strategy, OKR (objectives and key results), Lean startup methodology and Playing to win strategy framework.   
   
Individually, or in various combinations, these frameworks help leaders define, implement, and optimize business goals and processes.   
  
These models provide a structure for making decisions, managing resources and tracking results, and I will write more about my favorites in one of the next articles. 

 

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