Despite how much is written about strategy and how much money is spent on it, chronic failures persist. Two causes of failure are that strategy is still not fully defined, and strategy practice is still largely based on a planned view of the world.
Change and innovation are not wholly planned but emerge from the myriad interactions of the players involved—some by design, many not. This science of complex adaptive systems must be the bedrock on which strategy is built.
While many authors have shown the link between strategy and complex adaptive systems, The Emergent Approach is the first book to derive the definition of strategy and a theory of how strategy works from a model of complex adaptive systems.
While the theory and practice apply to any endeavor, including non-business, The Emergent Approach to Strategy is aimed at corporate business and functional leaders. The approach works for achieving aspirations in manufacturing, IT, supply chain, marketing, R&D, or product development just the same as for general business-unit aspirations.
The Emergent Approach speaks not just to the corporate leaders making high-profile decisions, but to the leaders throughout the company tasked with making change and innovating. The people in the trenches.
No. The approach enables you to discover your strategy. The theory and design principles provided have no specific advice on which markets or products you should target or specific organizational designs or technology trends. However, the abundant advice supplied by many strategy experts for making specific choices is readily incorporated into the approach as you see fit.
The emergent approach focuses on the proper design and function of strategy and the other components of a framework, including aspirations, plans, tactics, metrics, and scenarios. This focus on the mechanics of change and innovation—based on complex adaptive systems—is why the approach applies to any endeavor.
Specific strategy advice includes
- How aggressive your goals should be
- At which markets or regions you should aim
- What kind of products and services you should offer
- Whether to aim at “blue oceans” or not, and to what extent
- How to approach change to digital
- Best practices of mergers and acquisitions
- Whether to use a disruptive strategy
- Approaches to competing in specific technology spaces
This book offers no promise of easy “transformations.” Change and innovation are hard, sometimes ugly, with no guarantees. But with sound principles and discipline, organizations can efficiently raise the probability of success.
What are the chronic problems of strategy?
The first figure in the Emergent Approach is a collection of reports from well-known academics and consultants showing decades of strategy definition and implementation problems. It includes quotes such as,
“Bad strategy is gaining ground,”
“More than 70 percent of executives surveyed said they don’t like their strategy process, and 70 percent of board members stated that they don’t trust the results,” and
A “survey of 124 corporations concludes no one knows your strategy — not even your top leaders”.
Preparation & planning…
- A yearly exercise of budgeting, goal setting, and standard market analysis to satisfy the boss.
- Confusion among colleagues and experts in the consulting-corporate-academia complex around what an actual strategy is.
- False promises of easy transformations.
- Strategy designed by “ivory towers,” often marginalizing—and sometimes alienating—those who best know the business or the function.
- Linear strategy recipes that lead to huge slide decks sitting on the electronic shelf collecting electronic dust.
- Collection of the “usual suspects” of strategy processes—market share data, financial data, growth rates, SWOT, PESTEL—before it is even understood what information is truly needed for diagnosis and insight.
- Strategies that are no more than clichés that could apply to any business on earth.
- Strategies that are long lists of initiatives and plans.
- Strategies in silos that don’t connect across an organization.
- Execution divorced from strategy and defined as nothing more than “get good results.”
Benefits of the Emergent Approach
- Clarity on the definition and function of strategy; it is a rule for busting bottlenecks, not a plan or any of the many other common definitions.
- How the function of strategy is derived from complex adaptive systems where predicting and planning the future does not enable change and innovation.
- How the difference between strategy and tactics is scope, not time horizon.
- How nested frameworks are required in large, multifaceted organizations
- How good execution must be a real-time concept, not outcomes that you can only know in hindsight, such as “getting good results” or “seizing opportunities.”
- How to analyze a strategy using the five disqualifiers, which are new and more adaptive tests of strategy that require less interpretation and prediction than most traditional tests.
- How to design a strategy framework using a new agile-adaptive method without having an “expert” do it for you (or to you).
- How to diagnose bottlenecks.
- How to avoid the many pitfalls in designing scenarios.
- How to address uncertainty directly in the process as opposed to thinking about it as an afterthought.
- How to modify metrics to bring more clarity to leading indicators.
Part 1 presents the new theory of strategy based on an influence-diagram model of complex adaptive systems. The theory includes
- A derivation of the definition of strategy,
- A primer on how the emergence of innovations occurs in adaptive systems,
- A modified view of tactics and execution, and
- The five disqualifiers (see Members Section for disqualifier examples).
Part II presents a practice of strategy that reflects the new theory that is built around an agile-adaptive mode versus the traditional stepwise “chevron” linear mode. Strategy alternatives and scenarios are built into the process, not considered as afterthoughts. The approach includes:
- Design principles for strategy, aspirations, and tactics.
- Design principles for a strategy alternative matrix, fitness criteria, and techniques for making assessments.
- Techniques for diagnosing propositions, external constraints, scenarios, and most importantly, the bottlenecks to aspirations.
- A four-station dashboard that puts more emphasis on leading indicator clarity and measurement of execution.
- Five online Task Sets that serve as a guidebook to the emergent approach practice.
The output of the process is an implementation package containing the final framework with its strategy.