Strategic drift happens when an organisation's strategy slowly stops fitting its environment, because it keeps making small changes while the world changes faster. Johnson's model has four phases: incremental change, strategic drift, flux, and then transformational change or death.
The four phases
| Phase | What happens |
|---|---|
| 1. Incremental change | The strategy changes in small steps and keeps pace with the environment. This is normal and often successful. |
| 2. Strategic drift | The environment starts changing faster, but the organisation carries on with small changes rooted in past success. A gap opens up, often unnoticed. |
| 3. Flux | Performance falls. Managers disagree about what is wrong and what to do; strategy becomes confused. |
| 4. Transformational change or death | The organisation either makes a radical change, often with new leadership, or it declines, is taken over or fails. |
AQA defines drift as what happens when "the strategy pursued by a business no longer fits with the environment around it" (AQA teaching guide).
Why strategic drift happens
- Success breeds complacency: what worked before is assumed to keep working.
- Culture and the paradigm: shared assumptions filter out uncomfortable signals. The cultural web helps explain this.
- Path dependency: past investments, systems and skills lock the organisation in.
- Gradual change is hard to spot: each year looks only slightly worse than the last.
Commonly cited examples
Business teaching often points to firms that dominated a market and then missed a shift: a photographic film leader slow to embrace digital cameras, a mobile phone leader slow to respond to smartphones, and a video rental chain overtaken by streaming. Each kept improving its existing model while customers moved on.
How to avoid or escape strategic drift
- Scan the environment regularly with PESTEL and five forces.
- Challenge assumptions: bring in outside board members, new hires and customer voices.
- Measure what customers value now, not only past performance indicators.
- Run small experiments in new areas before they become threats.
- When drift is clear, lead transformational change using Kotter or Lewin.
Strategic drift in ACCA SBL
Look for case clues: falling market share despite "business as usual", long-serving leaders, a board that dismisses new competitors, or a culture proud of tradition. Identify the phase the organisation is in and recommend specific actions.
Worked example
Historic Places (March 2025 pre-seen) has served visitors well for 120 years through gradual change. If visitor habits shift online and younger audiences stop visiting while HP keeps adding small improvements to physical sites, it risks drift. Clues would be falling visitor numbers and donations year after year. The response: deliberate digital strategy, new skills on the board and a change programme.
Advantages
- Explains why successful organisations fail
- Links strategy, culture and change
- Gives a clear warning sign to look for
Limitations
- Hard to spot drift while it is happening
- Not all incremental change is harmful
- The phases are descriptive rather than predictive
FAQs
What is strategic drift?
When an organisation's strategy gradually stops fitting a changing environment, usually because it keeps making small adjustments while the world around it changes faster.
What are the four phases of strategic drift?
Incremental change, strategic drift, flux, and then either transformational change or the organisation's decline and death.
Who developed the idea of strategic drift?
Gerry Johnson, and it is set out in Johnson, Scholes and Whittington's Exploring Corporate Strategy (now Exploring Strategy).
How can organisations avoid strategic drift?
Scan the environment regularly, challenge the dominant way of thinking, bring in outside views, measure performance against changing customer needs, and be willing to make bigger changes early.