Strategy Is Dead, Long Live Strategy

New Approaches for Government

By Craig BakerJames Purnell, and Martin Reeves

"Marshall is the greatest man of World War Two,” President Truman confided to his diary upon appointing George Marshall secretary of state in January 1947. Having won the war, the United States faced losing the peace. Marshall inherited a precarious Europe: its economy was struggling, the Soviets had become rivals rather than allies, and Greece and Turkey were flirting with Communism.

The Marshall Plan, his solution for rebuilding Europe and keeping Communism in check, was genuinely visionary. It fed Western Europe and released investment to kickstart growth. Over the next two years, Marshall and Ernest Bevin, Britain’s foreign secretary, created NATO. By 1949, the West had an economic and a military plan. Turkey and Greece turned away from Communism, and the major powers settled in for the Cold War.

But as the century wore on—and as we argued in a recent paper, "Adaptive Strategy in Government" (BCG article, May 2012)—governments lost faith in planning. Not all plans were up to Marshall’s standard, and a blanket skepticism about strategy replaced its unquestioning application. In less predictable times, instead of drafting master plans, governments favored devolving power so that individuals and organizations could choose their own path.

We believe they gave up too soon. Governments should not universally reject or embrace strategy, but rather choose a strategy style according to their context. In other words, governments need to be strategic about how they plan and strategize.