[4] What is Strategy?

Why are there brands at all?
Why are there brands at all? This is a subset of the question 'Why is there anything at all?' Taking my cue from the prevailing scientific myth (SN Salthe 2002) I think it is because the consumer universe uses brand configurations to dissipate energy gradients. I shall expand on this for however long it takes.

How we understand Strategy
Mental Models are deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the world and how we take action writes Peter Senge in the Fifth Discipline. In this landmark of a book that should at the very least be mandatory prescribed reading for every businessperson, Senge elevates mental models to the status of one of the five core disciplines for a Learning Organization. The other four which we also need, to learn how to think and understand strategically, are; Systems Thinking, Personal Mastery, Shared Vision and Team Learning. [Sidebar comment] I see very little evidence of any of Senge’s deep understanding of what Arie de Geus was trying to say in any of the organisations I read about or work with. Some have heard of his book, few have read it; fewer still practice what he preaches. It is a very great pity!
Ask the question what is strategy? …and as part of the answer you will get just that, the baggage of mental models: assumptions, generalisations even pictures and images of how the process works. What if we ask five different people and we get different answers? What if they are collectively responsible for articulating the strategic intent and setting the strategic direction for the same organisation? What if they do have the same answer? Do they have what we call that a shared vision, and if so, a shared vision of what? Our mental models of strategy – the process and its enabling infrastructure – determine how we see the world and how we take action or fail to take action.
It is the aim of the next few blogs is to present a conceptual framework within which more convergent shared vision’s can be developed. Visions like these can then be shared by individuals within the same organisation and between individuals across organisational boundaries more fruitfully. I will present an argument for a shared vision of a strategic fitness landscape as the more appropriate context for asking and answering the questions: ‘where are we?’, ‘where are we going?’ and ‘what kind of adaptive walk will best get us there?’ A large number of scientists across the boundaries of many different disciplines share a similarly convergent vision – to develop a Theory of Everything – or a TOE as it is often referred to. Because they talk to each other and read each others books and published research (clearly because of the shared vision) they do not get trapped on poor local optima – to use a phrase that will be explained shortly. It simply means that they can move the frontiers of scientific knowledge forward so much faster. Why should we not follow the same example?
Michael Porter thinks like an ecologist. A close reading of his books Competitive Strategy and Competitive Advantage almost inevitably draws one into ecology as a frame of reference. Ecology - the discipline - is the result of applying Systems Thinking to nature. System’s thinking is the second of Senge’s core disciplines that sets the learning organisation apart from the dying organisation. It is clearly critically important to think about and understand how a company relates to its environment. Michael Porter says it is the very essence of competitive strategy. While many people have looked towards books on warfare for inspiration, Ecology offers more promise and far better results. The problem with warfare is that it can never offer more than a win-lose model while competition in nature (and in business) on the other hand takes place in a wider context of cooperation. If we then use ecology as a frame of reference and ask the question: what is strategy, what will the answer sound like? It will have everything to do with the words ‘how a company evolves in relation to its environment’ and, the concept fitness. Fitness is the answer to the implied ‘how?’ but in more understandable and measurable terms. It means fitness – in an ecological context - can be understood and can be measured and because of that, can help us to understand the concept strategy.
It would not have been possible to write anything like this 10 years ago because a large part of it is based on recent advances in our understanding of evolutionary biology. While the evolutionary biologist is interested in an internally consistent and maximally inclusive theory of evolution we are – by application of the host metaphor - interested in how complex business systems are founded, how they evolve and survive or die. Since a few of us, if any, have the opportunity to enjoy hands-on experience in a biology laboratory we will use a computer game; the Zebra version of Othello based on a game called Reversi, as a proxy for the experience. Gunnar's Othello page

[3] The Fox knows many things

Why are there brands at all?
Why are there brands at all? This ia a subset of the question 'Why is there anything at all?' Taking my cue from the prevailing scientific myth (SN Salthe 2002) I think it is because the consumer universe uses brand configurations to dissipate energy gradients. I shall expand on this for however long it takes.

Expanding our capacity to Understand

In keeping with the way Constraints theorists think the GOAL of this blog is to urge, implore and even beg every person in every organisation to continuously expand his/her (hes, as Goldratt would have it) capacity to understand strategically, now and in future. By this imploration hangs a tale: I have come to realise that many people in most organisations paint themselves out of the strategic picture and then for all the wrong reasons. They think, and this is a dangerous fallacy, that strategic thinking and specialists who are outsiders, best do the planning. They confuse the rules for playing with the rules for winning. The rules for playing are written by regulators, legislators and to some extent academics and are therefore understood by consultants. The rules for winning are written by the players on the field, not the spectators in the stands. The distinction is an important one and a major thread that will run throughout this contribution. The primary rules for playing the board and ball games we know so well very seldom change. In an important kind of way the establish by demarcation the unique identity of the game. The visible and familiar differences between rugby and cricket are entrenched in the rules base. The secondary rules for winning, rather than being fixed are constantly becoming better at facilitating a victory. In later chapters we will see the special contribution the words being and becoming makes to our understanding of complex adaptive systems. The lasting impression one often has after in-depth discussions with those unsung heroes of the business world, the front-line staff, is their tacit understanding of the rules for winning.

The belief that large organisations are controlled and directed by a relatively small board of directors may turn out to be a myth and an increasingly dangerous one at that. At a certain level organisations like these can at best be described as complex self-organising systems on a adaptive walk through a dynamically changing fitness landscape large parts of which is just not habitable. The boundaries of the habitable zone – to paraphrase Gonzalez et al – are set by two requirements: the availability of human and other material to identify and occupy (create) a habitable niche, and adequate protection against competitive threats. One of the necessary if not sufficient prerequisites for this is wholeness; the organisation should think and expand its capacity to act as a whole. That is neither bought nor taught.

James Gleick in his well-known book Chaos called it the butterfly effect. Technically it is referred to as sensitive dependence on initial conditions, and in practical terms it simply means that small things can make a huge difference. Gregory Bateson, long before all the others, called it the difference that makes a difference. It can come from anywhere in the organisation and more often than not comes from a source from which it is least expected. In many organisations the bifurcation points that could change the course of company history pass like ships in the night. There is no guarantee that things (events, decisions or opportunities) that are important look important. They are therefore missed. It implies though that the signs, signals and symptoms were there, if someone cared to notice. It means that someone raised a hand to ask for an opportunity to speak, but it was never granted. Someone said something important but no one really listened.

Inside the Mind of a Fox[1] you will find the wily mind of a strategist. While the Hedgehog knows one thing, the fox knows many things. Great companies know how to balance both these attrators. This metaphor is deliberately chosen to acknowledge yet another fine and hugely popular contribution by Clem Sunter, this time with co-author Chantell Ilbury. They wrote: ‘ …modern-day business is positively Newtonian in its outlook and trials behind science in its rate of development. Business still takes a deterministic view of the world.[2]’ Despite the obvious steps in the right direction and its popularity the whole distance is not covered. It will take many books, and then some, to accomplish the task. This blog aims in the same direction recognizing though that the foxes mind is somewhat like an onion. Peeling the first few layers is relatively easy, the closer you get to the heart of the matter the tougher it gets to keep going.
[1] Chantell Ilbury and Clem Sunter The Mind of a Fox, Cape Town: Human Rousseau 2001
[2] ibid p 43

[2] Sink or Thwim

Why are there brands at all?
Why are there brands at all? This ia a subset of the question 'Why is there anything at all?' Taking my cue from the prevailing scientific myth (SN Salthe 2002) I think it is because the consumer universe uses brand configurations to dissipate energy gradients. I shall expand on this for however long it takes.

Type the words complexity or complex adaptive systems into any self-respecting search engine and stand back or be prepared to sink or thwim as a cartoon once warned. This is not another blog about complexity. There are very good books dealing with complexity and the constantly updated reading list will list acknowledge those that influenced and shaped this blog in particular. Why blog then ?

Imagine a chess game, the opening gambit is history, the middle-game is the challenge and the future depends entirely on the end-game. The outcome is in your hands and the stakes are the proverbial matter of life or death. Think, plan and make the next move! …someone implores from behind. I can’t! you say; I have never played chess, I don’t understand what to do, I don’t know the rules of the game. What is impossible in chess is a mere triviality in business where most thinking and planning is done, at best, without any reference to the rules, and at worst in violation of the rules. To paint an even richer picture: acting as if there are no rules is no different from saying I am going to jump out of this 3rd storey window and ignore the law of gravity. No matter how stupid that sounds, it happens everyday in businesses all over the world with somewhat less immediate but equally disastrous results.

The thing that hath been, it [is that] which shall be; and
that which is done [is] that which shall be done: and [there is] no new [thing] under the sun.

The Book of Ecclesiastes

There is nothing really new in any book. At best this blog represents a different way of putting key concepts together that are all dealt with in detail and often with greater elegance in the original texts. Those texts and their authors are acknowledged with admiration throughout. In the course of doing so some very outstanding individual contributions will be highlighted. It is this author’s impression that the general quality of acknowledgement is too low and far too superficial. To remedy this situation a little more detail will be given in selected instances and where the appropriate context arises. Sewall Wright is a good case in point, a giant of an intellect against whom everything attempted in what follows is dwarfed. A handful of books and authors however deserve more specific acknowledgement before an attempt is made to answer the question: why write another book on this subject? These acknowledgements are part of the answer. The approach to business and strategy in this book was shaped (and is still being shaped) by Peter Senge’s book The Learning Organization, by Michael Porter, and by Eli Goldratt’s book Theory of Constraints. More recently by Brian Goodwin’s How the Leopard Changed its Spots and above all by A M (At) de Lange who is not known outside of the small circle of contributors to the LearningOrg[1] listserv. Naturally countless other books and papers and contributions to discussion lists have also left their indelible mark.
[1] Learning-org-digest -- Hosted by Rick Karash rkarash@karash.com Public Dialog on Learning Organizations -- http://www.learning-org.com Learning-org and the format of msg ids (LO1234 etc.) are trademarks

[1] There is more science in brands than you think

Why are there brands at all?
Why are there brands at all? This ia a subset of the question 'Why is there anything at all?' Taking my cue from the prevailing scientific myth (SN Salthe 2002) I think it is because the consumer universe uses brand configurations to dissipate energy gradients. I shall expand on this for however long it takes.

We live in a very small and seemingly very special part of an apparently expanding universe. Understanding the universe is a very compelling yet strangely elusive ideal. How do we understand something that keeps growing and about which new facts continue to emerge. This particular part of the conceptual universe – the world of ideas and thoughts about the universe itself - has attracted the attention of the most brilliant minds in recorded history and will continue to do so with an ever-increasing attractive force. As we begin to grasp the complexity and the enormity, the special and the general, the beauty and the risk, that which have always been relegated to the background, cosmic wall-paper, will fill and dominate the centre-stage. In Refuges for Life in a Hostile Universe[1] Gonzalez and his co-authors paint one of the most fascinating pictures ever to be hung in the cosmologists’ gallery. A very small part of our galaxy is habitable and ‘The broader universe looks even less inviting than our own galaxy.’ It would seem – to use their words – that we live in prime real estate. Clearly therefore we have to agree with their concluding observation: Any extraterrestrial civilisation seeking a new world would place our solar system on their home shopping list.
[1] Scientific American Volume 285 Number 4 October 2001 pp 52 - 59

The Business Universe

A business, a large enterprise, an organisation is by analogy an entity which lives and struggles for survival in an expanding universe. It is stunning, even chilling, to be present when business owners realise that they live (or have lived) on prime real estate, or that their customers have been placed on someone’s shopping list. The realisation that organisational tenure is less than solid, at best uncertain and by most accounts unpredictable is a discomforting one indeed. As far as the universe is concerned it is easy to understand that the problem or challenge was, until recently at least, too large and therefore beyond the grasp of the single human mind. This is where modern computers prove both useful and essential. They allow us to investigate the dynamic changes that occur over vast numbers of time steps and with a large numbers of initial options. The work done by Gonzalez et al was neither conceivable nor possible a generation ago. The business universe is no different and the themes that set the cosmology debate apart are today as much part of the mind and vocabulary of the strategist as of the cosmologist – complexity, emergence and self-organisation.