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Strategy: Has long-term thinking become short?
August 13, 2020
Strategy: Has long-term thinking become short?

From the ancient Greek, strategy means the art of leading the war, in order to defeat an enemy, chosen the battlefield. That is why we see many military terms associated with it in various bibliographic references (guerrilla, by pass, frontal, flank, siege, etc …). On the other hand, tactics represent all the variables that are put into practice to achieve the strategy and obtain an advantageous position in the field (number of human and material resources, choice of appropriate timings, management of communication, creation of the surprise effect, etc … )

In the business domain, strategy means the art of leading a business or a market and making it a winning project, through the construction of competitive advantages. The way in which this strategy is implemented is made up of tactics, which can include themes such as innovation, technology, pricing, service, management of distribution and communication channels, in addition to the management of human and logistical resources.

In the troubled times we are going through, it is always good to emphasize that the concept of strategy does not represent the long term, just as tactics do not mean short term either. Nothing like that. The first responds for “where” and the second for “how”.

Keynes said that “in the long run we will all be dead”. If the end of the sentence does not deserve much doubt, the long-term concept has much to say. Just look at the spreadsheets prepared in the last quarter of 2019, with sales and results projections for 2020, to understand two things: the numbers are all wrong and the temporal concepts run over.

However deep the prospective market studies on what will be the reality in a short time, there is no projection that seems reliable.

  • What accounts did and do only a few months later all those who, more directly or indirectly, develop activities in the field of tourism?
  • How many millions of people have had to leave the countries they chose to work in, because so soon yesterday’s opportunities (almost literally) are not expected so soon and the currency’s devaluation seems irrecoverable?
  • What about the recent cancellation of orders for textiles from major fashion brands, worth US $ 3 billion, to countries such as Cambodia, Myanmar, Vietnam or Bangladesh, which is causing businessmen and workers to despair and may contribute to a unemployment in the sector that can reach 70% and brutally affect an activity that represents about 75% of exports?
  • In reverse, how do you interpret the staggering growth in Amazon’s share price from $ 1,670 in mid-March to around $ 3000 at the present time?

In fact, today we are witnessing major changes at different levels of business activity:

The markets have changed: they intersect, extend and reconfigure. Uber transports food, a Portuguese micro-company sells in China, USA and Brazil, the teaching method is no longer what it was;

Customers have changed: they have changed preferences, transitioned to digital, they defend causes, they react to everything and show their most funny side. It is the victory of the biological over the synthetic or of the paper over the plastic, they are the means of payment that each time have less coins and notes, they are the online donations regarding the birthdays, it is the football, political or public comment made to the extreme, it is a TikTok that was born a kid, but is already a big one and that promotes 15 seconds of great creativity to aspire to more likes than the previous post.

Communication has changed: in interaction, in marketing, in the transmission of information, in education: Zoom or Teams have become the boardroom, digital channels are overcoming traditional advertising, webinars proliferate on any and all subjects, he returned to Telescola, which the kids have to accompany and the adults take the opportunity to relearn.

Management theories have changed: will it be that with this level of uncertainty, matrix models such as BCG, McKinsey or Ansoff, which analyze markets and competitive positions, still have the same strength? And what about Michael Porter who advocated two types of opposing strategies, separating leadership at the price of leadership by differentiation, at a time when Amazon, the fastest growing brand on the world stage, shows that the path is made on both fronts and at the same time. Same time?

If everything changes and in a short period of time, the strategy has to change in its timing of execution. I am not talking about the value proposition and what should distinguish a brand from the others and that represents its identity. I speak of the need to reinforce a strategic concept from 1997, dynamic capabilities, which is nothing more than a permanent adaptation with great flexibility to abrupt movements in the market and the environment.

This response is increasingly realized with short-term actions (quick wins) and not with the expectation of crossing a line that supposedly guesses the future and that suddenly became invisible. It will be the ability to repeatedly multiply these quick wins that will form the strategy of tomorrow. Doing, doing, doing.

Everything seemed to be a straight line. It is no longer, and few will know its future configuration.

 

I would give everything I know in exchange for half of everything I ignore!, René Descartes

 

in https://executiva.pt/blogues/estrategia-pensar-longo-prazo-tornou-curto

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