This is a fundamental concept in strategic management, often attributed to Henry Mintzberg. The distinction between “Intended” and “Realized” strategy highlights the dynamic and often unpredictable nature of the business world.
Here’s a detailed breakdown.
A. Intended Strategy (The Plan)
This is the strategy as conceived in the minds of senior leadership and formally documented in strategic plans. It’s the “blueprint” for the future.
- Nature: Deliberate, formal, and proactive.
- Origin: Developed through analysis, forecasting, and planning sessions.
- Key Drivers: Vision, mission, goals, SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), and competitive analysis.
- Analogy: A detailed architectural drawing for a new building.
Examples of Intended Strategy:
- “We will launch a new electric vehicle in the premium segment within two years.”
- “We will enter the Southeast Asian market by Q4 next year.”
- “We will achieve a 15% market share by acquiring our two main competitors.”
B. Realized Strategy (What Actually Happened)
This is the strategy that the organization actually implemented and the outcomes it achieved. It’s the “building” that was actually constructed, which may or may not match the original blueprint.
- Nature: Emergent, adaptive, and reactive.
- Origin: Arises from the day-to-day decisions, actions, and responses of the organization to a changing environment.
- Key Drivers: Unforeseen market shifts, competitor actions, internal resource constraints, customer feedback, and unexpected opportunities or crises.
- Analogy: The final constructed building, which may have modifications due to unforeseen ground conditions, material shortages, or client change requests.
Examples of Realized Strategy:
- The company launched the electric vehicle, but a battery shortage forced it to be a mid-range model instead of a premium one.
- The company entered Southeast Asia, but only in one country due to regulatory hurdles, and it did so through a joint venture instead of a wholly-owned subsidiary.
- The company failed to acquire the competitors but still grew market share to 10% by organically innovating a superior product.
The Gap: Why Intended Strategy Rarely Becomes Realized Strategy
The space between the intended and realized strategy is where the real world intervenes. Mintzberg described two key concepts that explain this gap:
- Deliberate Strategy: This is the part of the intended strategy that is successfully realized. The plan worked exactly as intended.
- Emergent Strategy: This is a pattern of action that was not part of the original plan but emerges over time in response to changing circumstances. It becomes a part of the realized strategy.
Therefore, the formula is:
Realized Strategy = Deliberate Strategy (Planned & Executed) + Emergent Strategy (Unplanned & Adapted)
A Simple Table to Compare
| Feature | Intended Strategy | Realized Strategy |
|---|---|---|
| Nature | Planned, Deliberate | Actual, Emergent |
| Focus | Formulation & Planning | Execution & Adaptation |
| Process | Top-down, Analytical | Bottom-up, Learning-based |
| Environment | Assumes a stable, predictable world | Responds to a dynamic, unpredictable world |
| Key Question | “What should we do?” | “What did we do, and why?” |
A Practical Example: Netflix
- Intended Strategy (circa 2000): Grow the DVD-by-mail rental business, improve logistics, and outcompete Blockbuster. The plan was entirely around the physical DVD model.
- Emergent Strategy: As internet speeds increased, Netflix noticed a small, unplanned customer behavior: they were starting to use the nascent “streaming” feature. This was not the core of their intended plan.
- New Intended Strategy: Leadership recognized the emergent trend and made a deliberate, but risky, shift. The new intended strategy became to pivot from DVDs to dominating online streaming.
- Realized Strategy: Netflix successfully executed this new plan. Their realized strategy is now being the world’s leading streaming service, a far cry from their original “mail-order DVD” plan. The original intended strategy was almost entirely abandoned in favor of the emergent one.
Key Takeaway
- Create a clear intended strategy to provide direction and allocate resources.
- Continuously monitor the environment for signals that their plan may be becoming obsolete.
- Embrace emergent strategies by being willing to learn, adapt, and pivot when a better opportunity or a necessary change arises.
The most successful organizations are not those with perfect plans, but those that are agile. They:
Understanding the difference between intended and realized strategy is crucial for leaders to move from rigid planners to adaptive executives.