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Strategy in Business – Should I Take the Blue Pill or the Red Pill?

Identity/Strategy / 05 Jun 2017 / By Simon Wardley

The strategy cycle is one of those simple mental devices which hides a world of complexity.  On the surface, it’s all about observing the environment (the landscape and climatic patterns which impact it), orientating around it (the doctrine or principles we might use), deciding where to attack (leadership) and then acting.  It’s a combination of OODA (Boyd) and Sun Tzu in an easy to understand cycle.

Figure 1  – The strategy cycle

Figure 1 The strategy cycle
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However, dig beneath the surface and you start to discover layers of complexity.  To understand the landscape, you need to map it and there are as many maps as there are industrial landscapes.  There’s also not just one climatic pattern but many and these are useful in anticipation of change.  However, beyond understanding the landscape and how it might change, you quickly discover that there’s not just one principle (or doctrine) to follow but many patterns for doctrine that are universally useful for any organization.  Beyond this, you start to appreciate how you can change the game and slowly start to discover the many forms of context specific gameplay which are used in scenario planning various plays.  Finally, you have the speed at which you loop around the cycle.  This is a wealth of complexity which is what business is.  However, take one small area  –  doctrine  – and the complexity expands.

Figure 2  –  Components

Figure 2 Components
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There are least 40 different forms of universally useful doctrine from focusing on user needs to a bias towards action to using appropriate methodology.  Each of these in turn expands.  For example, managing inertia has 16 different types of inertia and different tactical plays for each.

Figure 3 – Doctrine

Figure 3 Doctrine
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Figure 4 – Managing inertia

Figure 4 Managing inertia
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Of course, how you implement doctrine is context specific.  Thinking small as in team structure (for example,

Amazon two pizza or Haier’s cell based teams) might be a universally useful doctrine, but the teams within Amazon will be different from the teams in Haier whether in size, composition or number.

With practice, much of this complex space becomes second nature – you learn to map, you learn where inertia will exist in the map and the types of inertia to change that you’re likely to face.  You learn how to constrain complex spaces by dividing large scale businesses into small contracts and small teams.  You learn how to constrain maps themselves creating an atlas for an industry with each node representing an entire map itself.  This also blends together with gameplay and anticipation of change to become part of the craft.  You learn how to exploit the inertia of others or to design an organization to cope with constant evolution.  But there are still layers of subtlety and many unexplored areas.

For example, I’ve long used doctrine as a way of examining competitors to determine how adaptable they are and hence what sort of gameplay I might use against them.  I’ve provided two doctrine tables that have been completed by others ; one for a US web giant that is tearing up industry after industry and one for a US investment bank.  I’ll let you decide who is who, where you fit between them and which you would prefer to face off against

Figure 5  –  Doctrine table 1

Figure 5 Doctrine table 1
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Figure 6  –  Doctrine table 2

Figure 6 Doctrine table 2
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The problem, of course, is whilst the list of doctrine has been developed through mapping many industries and discovering patterns that appear to be universally useful, I cannot actually say which matters more.  Is transparency more important than a bias to action or is using appropriate methods more important than a focus on user needs? Sorting this out will take decades of data collection.  To compound this, one of the climatic patterns (known as co-evolution) means that as technology evolves, then practices and hence organizations co-evolve.  New forms of universally useful doctrine constantly appear.  It never ends.  However, as a rough guide the doctrine table appears useful enough for the time being.

Of course, without the priority order, it becomes difficult to say which you should adopt first.  Certainly, some of these doctrines were significantly important in describing new organizational forms as we discovered in our Learning from Web 2.0 report, published in 2012.  I’ve provided a table of these phenotypic changes in company (from traditional to the next generation) that were found to be significant and the related doctrine.  However, it’s worth noting that whilst some doctrine changed and new doctrine emerged, not all did.  Concepts like effectiveness over efficiency have been with us for a long time.

Figure 7 – Traditional versus Next Generation

Figure 7 Traditional versus Next Generation
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But are those recent changes the most important?  Is a bias towards data more important than effectiveness over efficiency” just because the former changed?  Is there an order to which you should implement doctrine?  Are some dependent upon others?  Does it matter?

Using experience, I can make an educated guess about which should be implemented in what order (as a discrete set of phases) but it’s only a guess for now.  For example, I know that implementation of a pioneer  - settler  - town planner structure should happen well after an organization has increased its situational awareness, got used to applying different methodologies, started to appreciate the difference between aptitude and attitude whilst having implemented a cell based structure.  You can’t just charge in with pioneer  – settler –  town planner.  There is an order to these things. 

Figure 8   – Doctrine phases, a best guess

Figure 8 Doctrine phases, a best guess
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This, of course, is just one small aspect of mapping.  There are over 27 different forms of climatic pattern (that is, common economic patterns that impact the landscape) and these can be used to anticipate change with various forms of weak signals.  There are over 70 different forms of context specific gameplay that I’m aware of , there  are different types of disruption – even Porter’s five forces have a context specific element.  Mastering mapping is a daunting task and not one that I expect to achieve in my lifetime.

However, the good news is that you can learn in small steps.  Just the ability to map an environment will get you to challenge assumptions (a form of doctrine), focus on user needs (doctrine), provide a systematic mechanism of learning (the map) and help you appreciate that everything evolves (a climatic pattern).  Loop around the cycle one more time and with two maps you’ll start learning how to remove bias and duplication (another form of doctrine) by comparing the maps.

Every action you take, every loop around the cycle, will dive you deeper into the subject and you will get faster in return.  The speed at which I can map an industry today outstrips my early attempts to map a single line of business in 2005.  But once started, be warned it’s hard to go back.  As my colleague, Chris Daniel, would say “What is seen, cannot be unseen”.

So I give you the choice.  The blue pill means you go no further, you wake up in your land of SWOTs, stories, gut feel and magic secrets of success learned from the great and good of the management consultancy industry.  The red pill … ah … start with undertaking our online Mapping Course, How to Stop Self-Harm and Get Fit.  This course will help you learn the basics of mapping and situational awareness.  Second, dig into my book with Chapter 1 (the book is creative commons, so help yourself).

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21st Century
Adaptive Execution
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Identity/Strategy
Proactive, Haptic Sensing
Reimagining the Portfolio
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