The four stages of strategic drift

Strategic drift can, and does, occur in many businesses. Here are the the four stages of strategic drift.

Picture this: your organization has analyzed its strengths and weaknesses. It’s considered its competitors and the advantages and disadvantages in the market. You’ve worked together as a team to collaborate and create a strategic plan that everyone believes in and works towards. Strategy – and business – is good.

But then the unthinkable occurs… your strategy begins to drift and the focus and intent you’ve worked so hard on goes with it. Strategic drift is a very real challenge that organisations can face, a failure to recognise and respond to changes within the business environment. And although strategic drift can easily sneak up on you if you aren’t diligent. if you understand the causes of this phenomenon, you can remedy the problem if you find yourself drifting.

What exactly are the four stages of strategic drift?

There are four phases that occur in strategic drift. Let’s learn about them and what they can mean for you and your organization.

Phase 1: Incremental Change

The first phase is that of Incremental Change occurs before there is any significant change in the external environment, be it the economy, technology, or customer demand. Organizations make incremental change and remain in touch with the environment.

There is no cause for alarm during this phase because there is little distance between external changes and the strategic action of the organization.

Phase 2: Strategic Drift

The second phase is Strategic Drift itself. This happens when there is an accelerating rate of change in the external environment (as noted above) but the organization continues to operate as normal.

In this phase, the organization continues to make incremental progress but it’s not enough to keep up with the environment’s accelerated rate of change, and this gradual effect can be quite insidious on the organization.

Strategic actions that were once enough for success become gradually less competitive.

Importantly, the slower you react, the larger the delta between what you offer and what the customer demands, the harder it will be to transform.

Phase 3: Flux

This is the crux, the key point of strategic drift that can define an organization. At this point, management can no longer ignore the gap between what their customers are demanding and what the organization is providing. This is where the organization needs to understand the necessity to change.

Because of the inability to adjust to incremental change, and the subsequent widening of the gap between the service or product provided and what the customer needs, the organization is now falling further behind.

Change now needs to err on the side of transformational as opposed to incremental.

Often, there is no decisive action – which ultimately leads to little progress being made. While management is caught in indecision, environmental change demand is continuing to accelerate and create more distance between your offering and reality.

Phase 4: Transformational change or death

That says it all – this is the point where organizations either undertake significant, transformational change to meet the changing needs of the customer… or they don’t.

For transformational change to occur, management needs to be bold, savvy and smart, having the foresight to recognize the direction that needs to be taken.

After all, the two choices here are clear:

  • Implement a change management strategy to make a significant transformation in the organization – This could result in success or rapid failure.
  • Continue your outdated strategy – This will result in dying a slow death.
So what does this all mean?

Organizations need to be aware of the dangers of strategic drift and be proactive in making sure they stay ahead of the curve.

At each stage, organizations need to be aware of the dangers and take action to prevent them from drifting too far off course.

And yes, there are absolutely reasons for strategic drift, as well as ways to avoid it. Stay tuned for our next blog, where we discuss the three reasons for strategic drift and the four strategies that you and your organization can implement to avoid it.

Don’t forget to check out our other blogs for all things strategy, strategic planning and execution.

And there’s more to strategic drift too – learn about it with Being Intelligent.

October 13, 2022
Ash Brown
Empiraa Founder & CEO