2 Strategic Trajectory

If you don’t understand where your organisation is heading, you can’t steer it towards a better future.

Strategic management in the digital age requires organisations to think clearly, act deliberately, and constantly re-evaluate their position in a world that changes faster than historical planning cycles can accommodate. This chapter introduces three fundamental lenses that together shape an organisation’s strategic trajectory:

1. Organisational Context: the forces shaping the organisation’s default future.
2. Alternatives & Choices: the scenario futures, strategic axes and decisions that define strategic trajectory.
3. Trajectory & Operationalisation:  the operating principles and implementation approaches that turn intent into outcomes.

These concepts build the essential foundation for strategy implementation in a digital world. They move beyond  viewing strategy as a plan instead treating strategy as a complex living system, influenced by environmental forces, organisational legacy, and the collective choices of leaders.

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2.1 Organisational Context

2.1.1 Default Future

Every organisation, whether a start-up or a century-old institution, is being pulled towards what Trafford and Boggis (2017) describe as its default future: the future that will occur if the organisation does nothing other than continue with existing plans and behaviours. Most organisations are not actually heading toward their desired future; they simply drift along a trajectory shaped by external pressures and entrenched internal systems, processes, norms and habits. The well documented case of Blockbuster Video (shown in Figure 2-1) illustrates this point.

Following their spectacular growth in the late 1990’s Blockbuster failed to respond to the rapid evolution of the broadband internet occurring around 2000. As a result, they experienced a slow business decline resulting in bankruptcy in 2010 with store closures to follow. Blockbuster failed to confront their default future. This is determined by a combination of Exogenous (external) and Endogenous (internal forces) as illustrated by the authors in Figure 2-2.

Understanding this requires analysing two categories of strategic forces:

Exogenous (External) Forces

These define the environment in which the organisation operates. They cannot be controlled, only responded to. Typical examples include industry structure, market trends, regulation, technological change, economic cycles, competitor behaviour and customer expectations. External forces can be categorised into local / regional and global subsets as shown in Figure 2-3.

Endogenous (Internal) Forces

These are forces created by the organisation’s own history: past strategic decisions, internal processes, cultural norms, leadership behaviours, structure, decision-making routines and tacit organisational assumptions. They can be categorised into visible or hidden as shown in Figure 2-4.

2.1.2 Capabilities as Strategic Muscle

Organisational capabilities are a special subset of internal forces. They reflect deeply ingrained ways of working—shared mental models, routines, languages, and collective experiences. When aligned, capabilities help pull the organisation move onto their strategic trajectory. When misaligned, they act as anchors to the past.

This interplay between external forces, internal forces and capabilities forms the organisational context—the strategic landscape within which choices must be made.

2.1.3 Practical Application

A practical application of these methods follows four steps, ideally undertaken as a team.

1. Define the default future, possibly an optimistic, realistic and pessimistic view.
2. Brainstorm the exogenous (external) forces.  Decide which will have the biggest strategic effect, and which will be the hardest to respond to.
3. Identify endogenous (internal) forces and capabilities. Again decide which will have the biggest strategic effect, and which will be the hardest to respond to, retire or develop.
4. Assess which forces anchor (to the past) or help pull the organisation towards a better future.

2.1.4 Case Study (Synthetic) — CityEnergyCo

CityEnergyCo operates in a rapidly shifting energy landscape. External forces include decarbonisation, new digital entrants and rising customer expectations. Internal forces include legacy systems, rigid hierarchies and risk-averse norms. The organisation’s default future is one of gradual decline. Its capabilities support infrastructure optimisation, not digital innovation, revealing a trajectory misaligned with strategic intent.

2.1.6 Topic Quiz

Please complete this anonymous knowledge check by scanning the QR code. The quiz app tells you the right answer once you have made your choice.

2.1.8 🤖 GenAI Usage

Consider GenAI as a way of helping you identify the exogenous and endogenous forces shaping your organisation’s ‘default future.

💡 To try:

1. Default Future Clarity: Use GenAI to take your team’s raw notes and draft optimistic, realistic, and pessimistic views of your default future. Then use GenAI to challenge your views, essentially acting as ‘Devil’s Advocate’.
2. External Force Brainstorming: Use GenAI to broaden your brainstorm to get a long list of exogenous forces (global or regional) that might impact your specific industry. Help ensure you haven’t missed any forces. But beware of hallucinations!
3. Identify ‘Hidden’ Forces: Input notes characterising your organisation’s background / history to help GenAI suggest potential hidden endogenous forces which might be acting as strategic anchors. Be sure to validate suggestions!

⛔️ To avoid:

1. Replacing Team Debate: Never let GenAI decide which forces have the most strategic effect; this is a social, iterative task and judgemental task for the humans in the team!
2. Unverified Local Data: Avoid relying on GenAI for regional regulatory or economic conditions without cross-referencing, as it may hallucinate or miss important local or industry specific details.
3. Passive Drifting: Do not use AI-generated context as your final report or notes. Its fine to improve clarity, but you must own the content, avoiding formulaic output.

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2.2 Alternatives & Choices

2.2.1 Making Choices

Every organisation has an envelope of strategic opportunity, once the external environment has been clarified. For example, if the external organisation is particularly hostile – for example during the COVID pandemic of 2020 – the organisation may be looking to survive and maintain operations. Conversely if the conditions are right and the capabilities are in place, the organisation may wish to aim for market leadership in their sector / geography. This envelope of opportunity is shown in Figure 2-5.

 

This section will present two complementary tools which can be used together to help the organisation choose their ‘strategic trajectory’ from this envelope of strategic opportunity.

Scenario Futures

Pioneered by Royal Dutch Shell over 50 years ago, Scenario Futures are plausible alternative futures shaped by opportunities and challenges in the organisation’s environment. Scenario Futures allow leaders to stretch thinking and avoid ‘single future’ assumptions (Wilkinson and Kupers, 2013).

Scenario Futures help leaders perceive change, explore how they should interpret and respond to that change, hence realising organisational learning.  Essentially, Scenario Futures map uncertainty and yield new perspectives for the organisation and its leadership team.

 

Notice that the process starts with analysing external and internal forces, as described earlier. It then moves on to selection of between three scenarios, spanning the envelope of strategic opportunity. These scenarios are subsequently developed, explored and experienced if possible – to help the leadership team choose between them at the final step.

Strategic Axes

Strategic axes define the organisation’s sources of value—digital experience, personalisation, automation, etc. Each axis is a continuum rather than a binary choice. These are shown for a typical retail bank in Figure 2-7.

 

Amazon Case Study

Some organisations are constantly managing their strategic axes to realise their growth aspirations. Let’s look at Amazon, going back to their roots in the early 1990:

This shows the proactive and constant management of existing axes and the journey continues today.

Strategic Signature

The strategic signature represents the organisation’s position on all axes—showing where it is today and where it aims to be in one of the Scenario Futures. Note that different strategic signatures are needed for different Scenario Futures.

2.2.2 Practical Application

To realise these tools in practice, follow the following five steps, ideally undertaken as a team.

1. Analyse between three to five Scenario Futures for your organisation, possibly representing different levels of ambition. Explore together what your organisation would look like when operating in the different scenarios. Consider bringing this to life using storytelling.
2. Identify your organisation’s strategic axes, which align with your sources of value. For a business, this would normally be your sources of revenue / income.
3. Map current axis positions. Which are most important to you, which are less so. Again this would align with income for a business.
4. Define target signatures needed for each Scenario Future. Essentially decide how the axis ‘sliders’ would be positioned to realise each scenario future. Would new axes need to be added? Any removed?
5. Assess gaps and capability management action needs. It would be natural for you to grow – and possibly retire – organisational capabilities to realise the different scenario futures. What are the actions needed to realise this in practice.

2.2.3 Case Study (Synthetic) — MetroBank

MetroBank develops two Scenario Futures: Digital Challenger Bank and Trusted (Traditional) Service Provider. Its axes (sources of value) are payment systems, mortgage provision, savings and insurance services. By comparing target signatures across the two scenarios, leaders see that each axis can be set to support the bank’s needs in each case.

2.2.5 Topic Quiz

Please complete this anonymous knowledge check by scanning the QR code. The quiz app tells you the right answer once you have made your choice.

2.2.7 🤖 GenAI Usage

Consider GenAI top help you in exploring scenario futures, strategic axes, and your organisation’s target strategic signature.

💡 To try:

1. Challenge your Scenario Futures: Use GenAI to challenge early ideas of the different scenarios to stretch your thinking and / or make the descriptions clearer,
2. Draft Scenario Stories: Use GenAI to help turn your ideas and into stories, helping your leadership team understand what the different Scenario Futures mean to them.
3. Axis Identification: Ask GenAI to check your early ideas of the organisation’s Strategic Axes (sources of value) to stretch your  thinking. Validate all GenAI suggestions with real-world information.
4. Gap Analysis Support: Use GenAI to help compare your current and target signatures, identifying specific capabilities that need to be grown or retired to achieve your scenario future. Again, careful validation will be needed.

⛔️ To avoid:

1. Single-Future Assumptions: Do not let GenAI narrow your focus to one ‘likely’ future; it must help you map uncertainty across three to five plausible scenarios that you have derived.
2. Binary Axes: Avoid letting the AI treat strategic axes as either/or choices; ensure it treats them as a continuum (sliders) and slider positioning can only come from your judgement.
3. Inventing Competitor Data: Never use GenAI to create competitor strategic signatures without verifying actual market intelligence.

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2.3 Trajectory and Operationalisation

2.3.1 Operating Principles

Operating principles clarify how the organisation will behave in pursuit of its strategy.  Operating principles together define the organisation’s strategic trajectory and bridge between strategic analysis and implementation. These are used once strategic choices have been made, as described in the last section.

Operating principles are expressed as deliberate choices between two valid alternatives: ‘We will do X as opposed to Y.’ For example, the organisation may decide that:

Operating Principles are really useful to explain to people not involved in the strategic management process by explaining where the organisation is going, and – as importantly – what its NOT going to be doing. Let’s look at a few more, for an organisation who is pursuing horizontal integration.

Typically an organisation would have around five Operating Principles that together define their strategic trajectory. These should not be too generic, nor too complicated. The process can then continue hierarchically, where each department (e.g., operations, finance, Human Resources) defines their local Operating Principles that align with, and provide further details to the organisation’s overall Operating Principles.

2.3.2 Different Implementation Approaches

OK, now that the strategic trajectory is perfectly clear to all, what do we do next? This ‘doing part’ is referred to as ‘strategic implementation’ and is the subject of our Module and this Pressbook. Subsequent chapters will introduce and apply many powerful tools to tackle this phase, but let’s start by introducing the work of John Hagel and colleagues documented in their book ‘The Power of Pull’ (2010).

The authors observe that faced with the aim of getting the organisation onto a new strategic trajectory, the traditional (and obvious) approach is to kick off a set of strategic projects, with clear milestones and investment which together form a change program that implements the strategy. However, this makes the flawed assumption that an organisation is programmable / deterministic. So given the change projects as stimulus the organisation will respond with strategic change. This ‘push implementation’ will deliver implementation certainty until something changes. As it always does!

 

However, organisations are actually complex, dynamic and people-driven. We will explore this concept of complexity science in more detail in Chapter 4. So it’s better to explain what we are setting out to do (through a clear set of Operating Principles) and let everyone in the organisation use their judgement and expertise. The goal here is to engender intellectual and emotional engagement that is resilient to change. This is referred to as ‘pull implementation’.

2.3.3 Practical Application

It’s challenging to draft meaningful Operating Principles and ideally undertaken incrementally as a team activity. Once the organisation’s top level Operating Principles are agreed (always in the form of ‘We will do X as opposed to Y’) then the various parts of the organisation can draft their local Operating Principles and demonstrate alignment with the top level OPs.

The organisation should then decide if they want to implement strategy using push, pull or hybrid, realising that most organisations operate in the ‘hybrid’ space.

We will explore how an organisation can optimise conditions for ‘pull’ later in the module / Pressbook.

2.3.4 Case Study (Synthetic) — BuildTech

BuildTech attempts a top-down digital transformation programme, which stalls due to overload and resistance. The organisation pivots to a pull approach—publishing internal  discussion papers, hosting forums, enabling knowledge sharing. Engagement increases, partnerships emerge, and momentum grows organically.

2.3.6 Topic Quiz

Please complete this anonymous knowledge check by scanning the QR code. The quiz app tells you the right answer once you have made your choices.

2.3.8 🤖 GenAI Usage

💡 To try:

1. Principle Polishing: Use GenAI to help refine your draft Operating Principles into the required ‘We will do X as opposed to Y’ format, ensuring clarity, balance and relevance.
2. Alignment Check: Ask GenAI to critique the alignment between local department principles (e.g., for HR or Finance) and the organisation’s strategic trajectory (i.e., the top level Operating Principles.
3. Simulate Resistance: Get GenAI to play ‘devil’s advocate’ to predict where push implementation might meet resistance, helping you de-risk your pull engagement plans.

⛔️ To avoid:

1. Vague Operating Principles:  Operating Principles must be specific enough to explain the trajectory to those who weren’t involved in the planning, or even get them in the wrong format. So never accept GenAI output at face value.
2. Over-reliance in Pull Planning: Although GenAI can challenge and help refine your ‘pull’ plans, it can never craft these plans for you – they are far too organisation-specific (and important!).
3. Never Sensitive Information – ever!: Some of the information at this step can be viewed as sensitive by your organisation. Keep this well away from open tools!

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2.4 Chapter Summary

This chapter provides an integrated set of strategic analysis tools that are suited to building a strategic trajectory that can be revised in a digital world. So why is that so important? Well it’s vital to get the oder right, as shown in Figure 2-9. Organisations often procure tech for a whole host of irrational reasons. Maybe they have heard that their competitors are using it. Or perhaps their CEO has just returned from a conference. This should never be the case. Tech procurement should only be to execute a well developed, systematic digital transformation plan. The goal of this plan must be to move the organisation onto its strategic trajectory.

 

So, its really important that organisations understand the forces shaping their default future, explore strategic alternatives through scenario futures and strategic signatures, and implement their chosen direction using operating principles and pull-based approaches.

 

These combined concepts guide leaders from strategic intent to practical execution, and we will expand on the tools and techniques needed in subsequent chapters.

2.5 References

1. Hagel, J., Brown, J.S. and Davison, L. (2010) The power of pull: how small moves, smartly made, can set big things in motion. New York: Basic Books.
2. Palfreyman, J. (2023) Digital Transformation Handbook: An Agile Approach to Maximise Value. Edition 2 – Sustainability. Kindle Direct Publishing (KDP).
3. Trafford, D. and Boggis, P. (2017) Beyond Default: Setting your Organisation on a Trajectory to an Improved Future. London: Lid Publishing. See author’s video collection.
4. Wilkinson, A. and Kupers, R. (2013) Living in the Futures. HBR.