over time, the phenomenon of ‘strategic drift’ will occur ... This may be a process which takes very many years may not be discerned by the managers until the drift becomes so marked that performance declines ... As this drift becomes recognized, the organization is likely to enter a period of flux, in which there is no clear direction and a good deal of disquiet and counterargument about the strategic direction of the organization.
- G. Johnson, 'Managing Strategic Change', 1992 [1]
A 1992 management paper gives an interesting angle on how our governments are adjusting to our current financial, economic and fiscal crisis. Whilst Johnson was studying companies rather than governments, both are driven by many of the same dynamics that drive any complex organisation.
Faced with a stimulus for action, for example declining performance, managers first seek for means of improving the implementation of existing strategy, perhaps through the tightening of controls. In effect, they will tighten up their accepted way of operating. If this is not effective, then a change of strategy may occur, but a change which is in line with the existing paradigm.
What an apt description of the mess we’re in and how our leaders are dealing with it. Faced with stagnant economic growth and severe national debt problems for a decade or more, our solution is to tweak our systems and patch them up with liquidity.
Challenges to the legitimacy of constructs within that paradigm are not only likely to be disturbing because they attack those beliefs which are central to managerial life, they will also be interpreted as threatening by political elites in the organization ...
In these circumstances it is likely that, over time, the phenomenon of ‘strategic drift’ will occur ... This may be a process which takes very many years may not be discerned by the managers until the drift becomes so marked that performance declines.
...
As this drift becomes recognized, the strategy of the organization is likely to enter a period of flux, in which there is no clear direction and a good deal of disquiet and counterargument about the strategic direction of the organization. This will be likely to affect performance negatively and, perhaps, be followed bv a more radical change in strategy (Figure 3, Mode 3).’
So what if the current structure, institutions and power dynamics of our governments is simply not suited to deal with the huge challenges of our times: competitive pressures from emerging economies, an ageing population, low economic growth, a highly complex financial sector, a more unpredictable world in general and a system which allows borrowing all the money needed for government’s short-term budgets? What could "mode 3" (see below) look like?
[1] Johnson, G. (1992): “Managing Strategic Change – strategy, culture and action”, Long Range Planning, vol.25, no.1, pp. 28-36
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