This blog was inspired by Venessa’s tweet: “From Ego-System to Eco-SystemEconomies“. It got me thinking of how strategy schools seem to work. Most strategy schools focus on achieving some strategic intent, for example the generic value disciplines of Tracey & Wiersema guide us to achieve either operational excellence or product leadership or customer intimacy or maybe even a mix. Or Porter’s (outdated?) generic strategies are designed to achieve either cost leadership, differentation or focus. Or what about Google’s Creatigy? And the list can go on. Most of these are Red Ocean strategies, deliberately designed to support the ego: I Win, You Loose (to bad for you…).
But as far as my knowledge goes in this area, we don’t yet have a strategy school that is designed to helps us transform from one equilibrium to another. Helping us move from a relative stable situation, via a relative unstable situation into a relative new stable situation. Help us go through a transition. And since we are in a worldwide state of transitions, I think we are in desperate need for transformation type strategies.
For example transformational strategies that help us transform from egosystem driven strategies, which currently are dominating our world, to ecosystem strategies which are geared towards creating a true better world. Could we invent such a transformation strategy that guides us through the transition from egosystem to ecosystem? An E2E strategy? Imagine such an E2E strategy could help us into a new Golden Age! That would be wonderful! So I wish you and me and all the others Happy E2E hunting!
The title of this blog is in fact a quote from Frank Zappa. I like it because I think we need to deviate from certain norms if we want to really create a better world and say farewell to all our crises. We have to get rid of our fears. Just like @transarchitect tweeted: “Not only is fear the root of many of our problems, it is also leads us to resist the changes that would help solve our existing problems“.
But it’s not only fears that hinder us. For example look at the article mentioned in this recent tweet from @petervan“The third industrial revolution | The Economist http://econ.st/GNWP45 > Wow! “instinct to protect what already exists” Curious if I could find any root causes for this instinct to protect, a few essential lines in the article got me thinking about root causes:
“And with the internet allowing ever more designers to collaborate on new products, the barriers to entry are falling.” What happens? When we see that barriers to entry are falling our first instinct will say to us to protect our Business. Because we might fear to loose our Business. But what can we do to deviate from our ‘instinct’ norm? For example, no longer protect the well-known but go with the same flow. Also become one of the parties that disrupt existing barriers to entry. Instead of fighting the competitors, work with the competitors. Transform from red-ocean strategy thinking to blue-ocean strategy thinking. Join, collaborate, co-create, connect. Relax and let go of overly controls.
“The factory of the future will focus on mass customisation”. So we are transforming from mass production to mass customisation. Fits well with consumerization. What can we do? Put the innovation power to the consumer. Release the fear of not being maximally efficient. Replace with strategy to be maximally effective. Let the consumer co-create. Deliver an innovative infrastructure that makes this possible. Relax and let go of overly controls.
“Like all revolutions, this one will be disruptive” At first sight, our instinct would guide us to fight the disruption. But probably a better strategy will be to not fight is but ride it (ride the wave, go with the flow, let go of control). Relax and let go of overly controls.
“The lines between manufacturing and services are blurring” We are transforming from a product-based economy to a services-based economy. So there will be a lot of new opportunities. A lot of new jobs. A lot of new challenges. A lot of compelling cases. And a lot of possibilities to transform to a beautiful new world, towards a new “Golden” age.
So if we are willing to let go of our fears of not being totally in control, our instinct to protect the existing, well-known will be reprogrammed. Good luck with your reprogramming!
In an increasingly interconnected world where knowledge is openly shared, being very smart yourself is no longer the only path to succes. You could spend a lifetime learning or developing stuff or theories and getting more and more clever yourself. But since we as humans already have an enormous amount of knowledge together and increasingly share it, why not benefit from that by integrating it? Instead of building up a lot of knowledge yourself, you can also try to connect to the knowledge that others willingly share. And instead of hunting for individual talents, we might better hunt for collective talents (networks). The six degrees of separation in your personal network, enabled by Internet technology can make it possible. You only have to initiate network connections to get it starting, so it starts by personal leadership. Being smart or clever will therefore gradually transform into learning to find peers in your network that can add knowledge to your own knowledge and extending your network so it adds more and more value. To make that kind of a (sourcing?) strategy really work, we should try to make some steps towards globally sharing non-competitive knowledge. You could call this increasing our global consciousness, for which by the way even a project is investigating this for many years already. It requires an open mindset. Good luck in your personal quest for getting “globally” smarter!
One of the famous quotes of Voltaire (a French author, humanist, rationalist, and satirist who lived from 1694 – 1778) was: Common Sense is not so Common. Now what did he mean by that? And is there a relation with Garret Hardin’s Tragedy of the Commons? Possibly. The way I look at it is that we tend to simplify complex matters by first making them “common”. And then we say to each other that what we have simplified is just common sense, isn’t it? This is in fact an abstraction strategy which can be dangerous. By trying to abstract the dirty details to a level that they seem invisible or not relevant anymore, it’s easy to sell your change as if it were something common, and what we should change to is just common sense, right? So we have integrated some of the unwanted details into some kind of common concept by leaving them out (after all, it’s not our job to look at the details, right?) This is where change or transformational strategies sometimes go wrong, simply because the theoretical abstraction you have developed, is not at all that easy to realize. So we forgot to look at the impact of the details because we abstracted them out, leave the dirty details for later. To explain this line of thinking a little further, you might also read the post: Culture eats Strategy for Breakfast (and how to eat breakfast). So you see now, Common Sense is not so Common at all and you should be very careful by implementing Tragedy of the Commons concepts, strategies or architectures without a good analysis of the impact.
Ofcourse you know everything about deliberate strategies or architectures (the ones you designed yourself). And ofcourse you know everything about emergent strategy or architecture, the one that your organization realizes in reality. It’s all hidden in the golden word “real”. So the real difference is that reality realizes real strategies, and that’s just exactly why culture eats strategy for breakfast. So next time you design a strategy (or architecture for that fact), first check with the realists in your company if it is realizable. This approach is also very good in line with Asby’s Law that states that the controlling system (“the strategy” in this example) must be equally complex or complexer than the controlled system (“the organization” in this example). So if you really want to eat breakfast next time, first ask the cooks how it should be prepared (they might give you some clues…). Final quote: if your realists say it’s realizable then reality realizes real strategies.
The shown figure of Newton’s Cradle is archived in Wikipedia.
I had some very busy weeks and are now trying to catch up again, goal is a (very) short blog each week. This week’s theme is about ambidexterity of IT organizations. Ambidexterity with people is about being equally performant using your left hand as well as your right hand. Just like the example of Newton’s cradle where the left and right ball (compare to left and right “hand”) are ambidextrous, IT organizations that are optimally aligned to their Businesses should also be ambidextrous. The desired ambidexterity should become visible especially in the types of services delivered: commoditized IT vs specialized IT. Just like the left and right hand example of human beings, the IT organization should have a virtual left hand (in line with the left hemisphere of the brain) that is optimized for delivering the virtual left handed services. The left handed services can be bound to represent all commodity IT services. The virtual right hand (in line with the right hemisphere of the brain) should be optimized for delivering the virtual right handed services. These virtual right-handed services can be bound to represent all non-commodity IT services. So the strategy for an ambidextrous IT organization is to become equally performant in delivering commodity as well as specialty IT services. This strategy can come in place if the internal and external IT organization share all these viewpoints, agree with eachother to make a (strict) separation in optimizing the left-handed vs right-handed processes and agree to have or acquire competences that are matched to the type of IT services (commodity vs specialty) to be delivered. This strategy for an ambidextrous IT organization can also be more easily matched to strategy development processes as described in one of the previous posts Differentiating Strategy Logic It can also be matched easily to separating IT value chains to match specific innovation goals. In one of my next posts I will add some drawings with models designed to further explaine all of this. For the time being, here is a first draftof the model I have called “Differentiation Reference Model”.
Strategy Pyramid, the traditional top-down strategy development approach that many companies use, going from vision to mission, from mission to goals and from goals to strategy. The Strategy Pyramid is very effective in stable contexts and motivates re-use
Strategy Stretch, a hybrid logic combining top-down and bottom-up strategy development. This logic is highly effective where innovations need to be built or where uncertainties need to be managed. It introduces new capabilities that might be re-used later using the Strategy Pyramid logic if the new capabilities aren’t temporal
So from the above table we can see that when developing a commodity IT value chain, the strategy logic that seems to fit best to such a chain is the traditional strategy pyramid. This makes sense because the value chain is focused on delivering stable, repeatable (long-lasting?) services which in turn deserves a solid strategic development that is focused on effectiveness in stable contexts.
To support the development of anadaptive IT value chain, type strategy stretch logic seems to fit well to this type of chain. This is mainly because the strategy stretch logic looks at opportunities and new capabilities and is focused on delivering new (innovative) services. The context in which this takes place usually has no time for long duration, top-down strategy developments so it seems fair to use strategy stretch here instead.
In a next post, I will dive into the relationship between IT Value Chain archetypes, Strategy Logic (this post) and how these relate to ambidextrousity of an IT organisation.