What is Strategic Change? – Meaning and its Theories

What is Strategic Change?

In response to the fast changing and fluid marketplace and industry landscapes, many management thinkers came with theories of strategic change.

The first among them was the legendary Peter Drucker who coined the term Age of Discontinuity to describe the way in which disruptive change affects us.

In Drucker’s model, the four sources of discontinuity are globalization, cultural pluralism, knowledge capital, and new technologies.

The main idea behind this theory is that extrapolating into the future by using the existing models is ineffective as the rapidity with which change was barreling down on corporations made all models redundant within no time. Instead, what Drucker proposed was that firms explore the drivers of change and strategize according to which aspect was most likely to affect the firm in the future.

Future Shock

Another management thinker, Alvin Toffler, came up with an idea about the intersection of different paradigms and the accelerating rates of change and their impact on businesses. He used the term Future Shock to describe how the changes in technology, move towards globalism, resource constraints, and finally, the shortening of time itself were akin to the future arriving even before one could prepare for it and hence he likened human civilization being shocked by the future.

In recent years, Malcolm Gladwell, used the term Tipping Points, to describe the phenomenon of trends acquiring critical mass and then taking off to impact business and society in the process.

In addition, Gary Hamel postulated the concept of Strategic Decay to explain how the value of each strategy decays over time irrespective of how brilliant the strategy was in the first place.

What these thinkers were attempting is to explain how change is the only constant and hence, businesses ought to be prepared for anything to happen and hence must strategize and build their business models accordingly.

Strategic Change in the Real World

After the discussion on the theorists and their ideas, it is time to consider how strategic change is actualized in the real world.

The example of Nokia which was one of the leading makers of the mobile handsets till a few years ago and which now finds itself at the bottom of the heap along with Blackberry reminds us that the strategic drift occurs without anyone noticing it and by the time it is noticed, it is too late.

On the other hand, the collapse of once famous companies like Chrysler point to the transformational change that is sudden and radical in nature.

The key aspect about strategic change is that it is difficult to predict and control. Hence, the optimal way to deal with it is to expect the unexpected and be ready for anything.

Unless companies embrace change, they are likely to be fossilized and unless companies prepare to deal with sudden, unpredictable, discontinuous, and radical change, they are likely to go the way of the dinosaurs.

Finally, many companies proclaim that they are changing whereas it is superficial and the world comes to know later on that their change models were neither broad nor deep.