The role of strategic intent

The role of strategic intent within an organisation has several purposes, which overlap. Figure 2.2 provides a simplified diagram of the role of strategic intent.

Firstly given dynamism and turbulence of the business ecosystem, organisations need a clear idea of ‘what they are trying to accomplish’ to avoid being tossed around (Wheatley 2006, p. 39). Strategic intent provides overall direction, keeping the organisation on track. It operates as a rhetorical device, ‘a symbol of the organization’s will about the future’ (Mantere & Sillince 2007, p. 3). Secondly it is the driving force behind many key business decisions, such as a desired marketplace position for strategic advantage. Strategic intent assists in developing the criteria that are utilised to guide and measure progress and the active management processes to achieve goals (Hamel & Prahalad 1989; Szpakowski 2011). Szpakowski (2011, p. 2)

indicates that ‘A good strategic design is elegant in its simplicity, with well-defined parameters, clarity of purpose and success factors’.

Figure 2.3 The role of strategic intent

Source: Adapted from Moncrieff (1999, p. 274)

Furthermore strategic intent provides a reference point for alignment (Fiegenbaum, Hart & Schendel 1996). Doz and Kosonen (2010) argue that developing strategic agility in the top leadership team enables renewal and transformation of business models through meta-capabilities of strategic sensitivity, leadership unity and resource fluidity. Critical elements of these meta-capabilities are alignment around a common interest and imagining new business models, reframing the existing business model (Doz & Kosonen 2010). Strategic intent enables the development of the exploration and transition rules for how an organisation will migrate from its current business model to a new one through alignment. According to Itami and Nishino (2010) there are two components in a business model, the profit model and the business system. Strategic intent is core to the former, which shows how the

Strategy implementation

Emerging opportunities Strategic

intent

organisation will achieve differentiation and thus earn profits in the marketplace. The business system is put in place to enable the realisation of profit through strategic intent. Significantly however, it also enables new learning capabilities through its design of work flows and information systems (Itami & Nishino 2010). Such learning can then form the basis for future design configurations and growth potential.

Additionally strategic intent is temporally distanced from present day actions. Due to the preponderance of the linear approach to strategy, strategic intent is frequently established as a major part of strategic planning. A disconnection between now and the future may create a problem to be solved by the strategy process by supporting the emergence of knowledge creation and its assimilation to enable new opportunities to be realised (Hamel & Prahalad 1994). Moreover the emergence of opportunities and threats in the business ecosystem is partly driven by the innovation derived from new knowledge created through social interactions (Aramburu, Sáenz & Rivera 2006; Mintzberg 1990). Such knowledge has to be both recognised as being potentially of value and duly assimilated through an organisation’s processes to corporate strategy to contribute to innovation and value creation (Barr, Stimpert & Huff 1992). Strategic intent is critical in that it can both facilitate emergence and also enable that which is emerging to be noticed, assimilated and utilised. Adapting to emergence needs to be a key part of an organisation’s strategy as it is about creating a future for itself (Jansen, Cammock & Conner 2011; Mintzberg & Hunsicker 1988).

However strategic intent may smother new ideas in the interests of what is planned (Easterby-Smith et al. 2008). For example the core rigidity which trapped Texas

Instruments into being a low-cost provider of handheld calculators when the market changed to product differentiation led to the organisation missing opportunities (Hill & Jones 2005). Additionally the significance of strategic intent to outcomes can also be seen in the 1970s when Xerox Corporation focused on exploring photocopier innovations and failed to capitalise on breakthrough innovations in computing software and hardware, such as the mouse, graphical user interface and the first personal computer (Chesbrough & Rosenbloom 2002; Doz & Kosonen 2010). Strategic intent enables an organisation to achieve, but without factoring in dynamism and emergence to that intent, there is a risk it may stifle flexibility, agility and adaptability in a dynamic environment.

Finally, endeavouring to adhere to their strategic intent, organisations may be faced with strategic complexity and ambiguity for their operations (Doz & Kosonen 2010; Smith, Binns & Tushman 2010). For example strategically managing a collaborative venture is a complex strategic task in itself. To also be simultaneously recognising and assimilating continually emerging created knowledge from interactions in the collaborative venture adds complexity to the senior manager’s task. Besides the complexity, there is what Chia and MacKay (2007, p. 228) claim is ‘an epistemological assumption’ about the intentionality of human action in strategy- making (Hendry & Seidl 2003). If strategy can emerge from the responses of a strategist to changes in the business ecosystem unselfconsciously that is retrospectively deemed to be strategic then ‘deliberate intentionality is not a prerequisite for the articulation of a strategy’ (Chia & MacKay 2007, p. 228). Emergent strategies are those that ‘appear without clear intentions – or in spite of them’ (Mintzberg & Hunsicker 1988, p. 79). Mintzberg (1988, p. 80) suggests that

‘Deliberate and emergent strategies form the end-points of a continuum’. Without intentionality, agency is removed from the centre of strategic analysis, replacing it with the transmission of strategy practice.

Although conceptually strategy simplifies reality and strategies are developed to reduce uncertainty and provide inspiration, generally strategic management principles are based in stability (Doz & Kosonen 2010; Hay & Williamson 1997; Mintzberg 1987; Teece 1984). Such underpinning assumptions make investigating the role of strategic intent nowadays of interest, particularly its relevance in strategy dynamics. Despite the frequent usage of the term strategic intent throughout the academic and practitioner literature, there appears to be a paucity of empirical research into its role, definition or antecedents and outcomes in business and management disciplines. The previous discussion on the role and complexity surrounding strategic intent and the keen interest in best ensuring sustainable competitiveness through strategising, there remain many opportunities to further explore strategic intent.

Strategic intent is that part of the strategy formulation process that gives direction within organisation planning. Another component is organisational vision, which appears to have many similarities in use that of strategic intent. To clarify similarities and highlight differences, organisational vision and its connection with strategic intent is explored subsequently.