Deciding on your Strategic Approach -- pursuit of opportunistic or prescriptive strategies -- is an essential element of strategic planning.
Let's start with definitions: Opportunistic strategies tend to diversify resources, defer decision making and pursue a wide range of potential opportunities. Prescriptive strategies, on the other hand, tend to prescribe very specific actions, concentrate resources and prioritize known opportunities. Where opportunistic strategies optimize for flexibility, nimbleness and market responsiveness, prescriptive strategies optimize for focus, scale and market influence.
The life stage of the organization is the most important factor in determining your organization's Strategic Approach. Strategies that are overly prescriptive in the start-up phase of the organization's life can doom the organization to an orderly and well-planned death. The earlier you are in the life of your business, the more opportunistic your strategies should be. In the start-up years you are still finding product/market fit, developing your value proposition and figuring out what types of clients you can serve most effectively. Entrepreneurs in the start-up phase have to be exceptionally nimble. Sensing and chasing low probability opportunities is often the only path to survival.
But, as the business matures, the pursuit of primarily opportunistic strategies becomes a hindrance. It is at this point where formal Strategic Planning goes from valuable to essential. An effective strategic planning process helps organizations make difficult resource allocation decisions and determine the markets in which they can win. Prescribing strategies that tie up resources, close off market opportunities or change client segments is necessary to achieve the scale and clarity of a true market leader.
As you create compelling strategies, make sure you understand the stage your organization is in and strive to match it to your strategic approach.
Feel free to reach out if you have specific questions with regards to this blog.