I've just re-read a great 1997 paper by Roger Martin, "Strategic Choice Structuring". There's a lot in this, but it's worth reading just to be reminded that strategy is all about choice. And good strategy is all about good choices.
And, as Martin says in this paper, you need to make "genuine" choices for your strategy to be sound. A genuine choice entails not just what you will be doing, but also what you won't be doing. For example, a strategy that will "focus on the customer" is no strategy at all - because it is no choice at all. As Martin says "could the company really have decided otherwise? Could it ever truly choose to ignore the customer?"
Showing posts with label strategy. Show all posts
Showing posts with label strategy. Show all posts
Tuesday, December 4, 2007
Organisational design as the heart of strategy
I've just been reading a McKinsey Quarterly article ("Better strategy through organisational design", Lowell L Bryan and Claudia I Joyce, No. 2, 2007). Bryan and Joyce claim that a "golden opportunity" to generate competitive advantage can be gained by "making organisational design the heart of strategy".
The authors claim that we need to move away from the organisational structures of the 20th Century. These structures were designed to cope with the scarcity of capital. We need to move to new designs, designs aimed at "maximising the returns on people, not capital". (Amongst other things, this argues for new measures, including "profit per employee").
In the 21st Century the design of an organisation needs to reduce unproductive complexity, and maximise the opportunities for productive interactions amongst talented workers. How do we do this? The authors argue that you need both hierarchy and collaboration.
You still need hierarchy, because you need to be able to set aspirations and make decsions etc. But you also now need collaboration. The rest of the article starts to canvass how you might induce collaboration in a large scale organisation (while at the same time still getting the best out of hierarchy, without undue complexity). One of the great ideas for promoting collaboration is to borrow from basketball - where players are rewarded on their number of "assists" and not just on goals scored.
The authors claim that we need to move away from the organisational structures of the 20th Century. These structures were designed to cope with the scarcity of capital. We need to move to new designs, designs aimed at "maximising the returns on people, not capital". (Amongst other things, this argues for new measures, including "profit per employee").
In the 21st Century the design of an organisation needs to reduce unproductive complexity, and maximise the opportunities for productive interactions amongst talented workers. How do we do this? The authors argue that you need both hierarchy and collaboration.
You still need hierarchy, because you need to be able to set aspirations and make decsions etc. But you also now need collaboration. The rest of the article starts to canvass how you might induce collaboration in a large scale organisation (while at the same time still getting the best out of hierarchy, without undue complexity). One of the great ideas for promoting collaboration is to borrow from basketball - where players are rewarded on their number of "assists" and not just on goals scored.
Tuesday, November 20, 2007
The problem with most organisations' strategies
Our principal at 2nd Road, Tony Golsby-Smith, recently wrote an interesting article for the Journal of Business Strategy: "The second road of thought: how design offers strategy a new toolkit" (Vol 28, No. 4, 2007).
He claims that the only way you can do strategy well is to reconceive it as an exercise in "design". I'll get to this later. But what's clearly prompted him to make this claim is the state of strategy in most organisations we see. There is a clear disconnect between what strategy could, and should, do in most organisations, and what it actually ends up doing.
As Tony says, "strategy should be the process that enables organisations to create new futures and engage their people in that exciting task". But too often "it weighs an organisation down with more data and inputs". Too often, organisations' strategies miss the vital elements of "coherence", "energy" and excitement.
The solution? See strategy as a design exercise. Not an analytics exercise. But how do we start to get our heads around "design"? By looking at the first principles of design thinking. And they can be found in the realm of rhetoric. So to start this journey, we'd better talk about rhetoric and the "two roads" story.
He claims that the only way you can do strategy well is to reconceive it as an exercise in "design". I'll get to this later. But what's clearly prompted him to make this claim is the state of strategy in most organisations we see. There is a clear disconnect between what strategy could, and should, do in most organisations, and what it actually ends up doing.
As Tony says, "strategy should be the process that enables organisations to create new futures and engage their people in that exciting task". But too often "it weighs an organisation down with more data and inputs". Too often, organisations' strategies miss the vital elements of "coherence", "energy" and excitement.
The solution? See strategy as a design exercise. Not an analytics exercise. But how do we start to get our heads around "design"? By looking at the first principles of design thinking. And they can be found in the realm of rhetoric. So to start this journey, we'd better talk about rhetoric and the "two roads" story.
Friday, November 9, 2007
Emptiness
(The fifth in a series of posts on "Is your strategy a duck?". Starting post is here.)
Benedikt's fourth component of realism in architecture is that of "emptiness". The quality of a building that allows the user to make it their own: to "complete" it. To give it some of their own meaning.
A strategy should also allow this. Employees should be able to be involved in the "emergence" of the strategy. Liedtka points out that one of the critical roles of senior executives is to set the "boundaries" of the conversations that will allow employees to put meaning into the strategy that's relevant to them and their work.
Benedikt's fourth component of realism in architecture is that of "emptiness". The quality of a building that allows the user to make it their own: to "complete" it. To give it some of their own meaning.
A strategy should also allow this. Employees should be able to be involved in the "emergence" of the strategy. Liedtka points out that one of the critical roles of senior executives is to set the "boundaries" of the conversations that will allow employees to put meaning into the strategy that's relevant to them and their work.
Materiality
(The fourth in a series of posts on "Is your strategy a duck?". Starting post is here.)
Benedikt's third component of realism in architecture is that of "materiality". That is, for a building to be real "it ought to be made of stuff". A building needs to be made of materials that "look like what they are".
For a strategy to be material, Liedtka argues, it needs to clearly link to the reality of the system on the ground. It needs to take into account the details of what will be involved in implementing it. And it needs to do that credibly.
Benedikt's third component of realism in architecture is that of "materiality". That is, for a building to be real "it ought to be made of stuff". A building needs to be made of materials that "look like what they are".
For a strategy to be material, Liedtka argues, it needs to clearly link to the reality of the system on the ground. It needs to take into account the details of what will be involved in implementing it. And it needs to do that credibly.
Significance
(The third in a series of posts on "Is your strategy a duck?". Starting post is here.)
Benedikt's second component of realism in architecture is that of "significance". And what's important here is significance of the building to an individual - not the building being "symbolic of something".
Here Liedtka unpacks the idea that a strategy needs to engage at "the level of individual action". It needs to engage everyone in the organisation - including those on the shop floor.
According to Liedtka, strategies become significant when they help employees answer two questions:
Benedikt's second component of realism in architecture is that of "significance". And what's important here is significance of the building to an individual - not the building being "symbolic of something".
Here Liedtka unpacks the idea that a strategy needs to engage at "the level of individual action". It needs to engage everyone in the organisation - including those on the shop floor.
According to Liedtka, strategies become significant when they help employees answer two questions:
- "What does this mean to me in my role in the organisation?"
- "Why should I care?"
Presence
(The second in a series of posts on "Is your strategy a duck?". Starting post is here.)
Benedikt's first component of realism in architecture is that of "presence". There is something about the building that commands attention.
How does a strategy command attention? Liedtka makes clear that to grab attention a strategy must be interesting. How so? To be interesting a strategy must:
Benedikt's first component of realism in architecture is that of "presence". There is something about the building that commands attention.
How does a strategy command attention? Liedtka makes clear that to grab attention a strategy must be interesting. How so? To be interesting a strategy must:
- Combine the familiar and the novel. Too familiar and we will ignore it as nothing new. Too novel and it will seem too way out to be credible.
- Be unified and simple. Avoiding needless complexity and jargon: and easily suggesting action.
- Be delivered by someone "we know and take seriously". Usually our line manager - which of course requires that our line manager is also engaged with this strategy. (This reminds me of Aristotle's ethos of the speaker - more on this another time).
"Is your strategy a duck?"
Jeanne Liedtka asks this question in a recent article in the Journal of Business Strategy (Vol 27, No. 5, 2006). Her presenting problem is the "Knowing-Doing Gap" - why is it that so many organisations fail to turn their strategies into outcomes? Liedtka's hypothesis: too many corporate strategies are "ducks".
Liedtka takes this idea of a "duck" from the architecture book "Learning from Las Vegas" (Robert Venturi, Denise Scott Brown, Steven Izenour, 1977, MIT Press). Here Venturi et al define a "duck" as a "building-becoming-sculpture". A building that has sacrificed so much for symbolism that it fails to be useful as a building. (You can read a good discussion of Venturi et al's book, as well as a picture of the original offending duck, at John Lumea's blog, here).
So, the question to ask, and Liedtka asks it well, is - can strategies be ducks too? The answer is clearly yes. As Liedtka shows, there are "strategies that function as symbols, not roadmaps." Strategies that are "high level abstractions" that leave most people in the organisation "clueless" as to what they mean.
The solution is to make strategies "real". And it's here that Liedtka returns to architecture for inspiration. Michael Benedikt's book "For an Architecture of Reality" (Lumen Books, NY, 1987) sets forth four components of a building "that contribute ... to a sense of realism":
Liedtka goes on to apply these ideas to strategy - in an attempt to answer the question: what can make a strategy real?
Liedtka takes this idea of a "duck" from the architecture book "Learning from Las Vegas" (Robert Venturi, Denise Scott Brown, Steven Izenour, 1977, MIT Press). Here Venturi et al define a "duck" as a "building-becoming-sculpture". A building that has sacrificed so much for symbolism that it fails to be useful as a building. (You can read a good discussion of Venturi et al's book, as well as a picture of the original offending duck, at John Lumea's blog, here).
So, the question to ask, and Liedtka asks it well, is - can strategies be ducks too? The answer is clearly yes. As Liedtka shows, there are "strategies that function as symbols, not roadmaps." Strategies that are "high level abstractions" that leave most people in the organisation "clueless" as to what they mean.
The solution is to make strategies "real". And it's here that Liedtka returns to architecture for inspiration. Michael Benedikt's book "For an Architecture of Reality" (Lumen Books, NY, 1987) sets forth four components of a building "that contribute ... to a sense of realism":
Liedtka goes on to apply these ideas to strategy - in an attempt to answer the question: what can make a strategy real?
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