Why firms deviate from their strategies: Causes of strategic deviation

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What is strategic deviation

Strategic deviations are changes that happen from a firm’s strategy. Some of these may be intentional, as the firm actively decides a better course of action. Other deviations may be less conscious in nature – deviations that are less intentional in nature, potentially occurring without others realizing. 

Causes of strategic deviation

The environmental changes and the strategic plan is immediately ignored

One way that firms can deviate from their strategy is if the firm intentionally deviates from their strategy after there is a change in the environment. Potentially a competitor makes a major move, and management decides to copy that firm. Or potentially a new entrant enters the market space, and management decides to launch a similar product. While some changes can be calculated – conscious decisions to depart from the intended strategy due to environmental changes, other deviations can be more knee-jerk in nature – occurring as the original strategy is simply ignored in the face of environmental change. 

Lack of shared understanding

Another cause of strategic deviations is that employees and managers may not understand the strategy. Without an understanding of why certain decisions have been made, employees may make adjustments that lead to strategic deviation without realizing the impact. 

Lack of employee buy-in

Coupled with the lack of shared understanding is a possibility that employees do not buy into the strategy. Strategic buy-in is important because faced with tough decisions, it is what keeps the firm on track. If employees and managers do not believe in the importance of the strategy, then faced with challenges, difficult decisions, or external pressures, employees are likely to quickly deviate from the strategy. 

Gradual deviation

Another way that deviation can happen is gradually over time – without individuals in the firm actively noticing the deviation. Small adjustments to the company’s approach can gradually mount, such that over time the firm starts to move from its original strategy. 

Risks of strategic deviation

While there may be times where strategic change is needed, some of the dangers associated with deviations include:

Loss of focus

Part of the dangers of strategic deviation is that it risks a loss of focus. What may start out as a well thought through and consistent strategy can quickly deteriorate if the firm starts to deviate from the original strategy – and particularly so if the deviations are not well thought through, with different parts of the firm deviating in different ways. 

Loss of strategic differentiation

Another danger is that the company starts to lose what makes the firm unique. Having a strategy helps to ensure that you are differentiated from other firms. If you start to deviate – and particularly if the deviations are unintentional, it can quickly lose your distinction from other firms. 

Loss of coordination between elements of the strategy

A final risk of strategic deviation is that it results in the various components of the strategy no longer working in harmony together. Part of the success of a company’s strategy derives from the various components working together – internal consistency – and if some parts change, then this consistency may no longer be there.