Rethinking the Thinking about Strategy
Like many other business tools, strategic thinking has undergone an evolution. In their 1998 book Strategy Safari: A Guided Tour Through the Wilds of Strategic Management, Mintzberg, Ahlstrand, and Lampel defined strategy as:
“…a pattern, that is, consistency in behavior over time… [strategy has] to form as well as be formulated… strategy is a position, namely the locating of particular products in particular markets… strategy is a perspective, namely an organization’s fundamental way of doing things the [company] way… [and] strategy is a ploy, that is, a specific ‘maneuver’ intended to outwit an opponent or competitor.”
The authors plotted various approaches to strategy formation along two dimensions—how controllable the external environment seems to be (ranging from comprehensible to confusing) and how open-ended is the proposed internal process (ranging from rational to natural).
When the world was comprehensible and controllable, the Planning and Positioning schools were appropriate choices. However, in today’s unpredictable and confusing circumstances, a combination of the Cognitive, Learning, and Power schools is the way to go.
The 21 century strategy formulation approach we now need is the best of:
- Cognitive: challenging beliefs and paradigms, forming new naturalistic mental models and perceptions.
- Learning: exploring what’s emerging and adapting as you go forward to build resilience.
- Power: appreciating the importance of relationships, influencing, and negotiating to be agile.
Types of Strategies
Henry Mintzberg and James Waters developed the notion that Deliberate and Emergent strategies may be conceived as two ends of a continuum along which real- world strategies lie.
Emergent Strategy is defined as the process of letting the strategy emerge as things gradually becoming apparent. There is ongoing learning, experimentation and risk-taking. It is an adaptive, incremental process in which the ends and means are intertwined and often specified simultaneously.
Strategy with both eyes open
Emergent strategies are sense-making strategies where we are mindful to not think too far ahead since the future is unpredictable. Instead we attempt to stay in the Present and observe the Future emerging in front of us.
The Cynefin Framework opens both eyes by adding the perceptions of Complex and Chaotic systems. This enables us to see Strategy as a dynamic flow.
1. Collapse. Sudden move from the Simple to the Chaotic domain due to a failure. Most negative events are inadvertent such as a safety rule violation leading to an accident or a Black Swan disaster. However, Collapse can be a conscious strategy if one wishes to deliberately cause a system failure to happen for social, political, economical gain. Think of a political leader who secretly creates a crisis so that he can be heralded as the hero leading the people back to stability.
2. Imposition. A forceful action to return to the ordered side. Examples would be punishing a person after a mistake or imposing martial law to squelch a riot.
3. Incremental Improvement. Move to the Complicated domain to spend time analyzing a process, improving it, and then standardizing to the Simple domain after documenting and training.
4. Exploration. Move to the Complex domain to observe and understand inconsistent or new behaviour. One example is changing a process beset with workarounds and people bypassing known steps. Another is an idea that shows promise and is worth exploring.
5. Just-in-Time Transfer. Discover a new behaviour pattern and create a new solution in the Complex domain. Then transfer it to the Complicated domain with JIT training and documentation.
6. Swarming. A time-is-of-the-essence move from the Chaotic domain, through the Complex domain, and into the Complicated domain. A common phenomenon in nature when ants, termites, birds, etc. collectively display similar behaviour. A human example would be encountering a disaster that has never been experienced before. People would be rapidly pulled together to creatively find a new solution.
7. Divergence-Convergence. Move quickly from the Chaotic domain into the Complex domain to gather many diverse ideas. Pick one and act on it. Think of Star Trek’s Captain Picard: “Make it so.”
8. Entrainment Breaking. A strategy to loosen the minds of experts and professionals stuck or locked in old paradigms. Force a move into the Chaotic domain with a disruptive action to shake things up. Once a willingness to let go is achieved, move to the Complex domain to explore new ideas.
9. Liberation. Move from the Simple domain into Disorder, then through the Complex domain and ending in the Complicated domain. An example is changing an long-held but outdated best practice or engrained bureaucratic norm. A more extreme example is a total organization restructuring.
10. Immunization. A fall into the Chaotic domain followed by an immediate return to the Simple domain. One example is damage control and fast restoration after an unexpected negative event. Also can be a devious strategy used by political leaders who feel the need to improve popularity. A crisis is purposely created. The leader takes decisive action and is perceived as a hero restoring order for the masses.
Blog: Chucking SVA out of my Strategy toolbox