Emergic

Here are some excerpts from the first chapter of The Strategy Paradox by Michael Raynor:

Most strategies are built on specific beliefs about the future.Unfortunately, the future is deeply unpredictable. Worse, the requirements of breakthrough success demand implementing strategy in ways that make it impossible to adapt should the future not turn out as expected. The result is the Strategy Paradox: strategies with the greatest possibility of success also have the greatest possibility of failure. Resolving this paradox requires a new way of thinking about strategy and uncertainty.

The strategy paradox, then, arises from the collision of commitment and uncertainty. The most successful strategies are those based on commitments made today that are best aligned with tomorrows circumstances. But no one knows what those circumstances will be, because the future is unpredictable. Should one have guessed wrong and committed to the wrong capabilities, it will be impossible to adaptafter all, a commitment that can be changed was not much of a commitment. As a result, success is very often a result of having made what turned out to be the right commitments (good luck), while failed strategies, which can be similar in many ways to successful ones, are based on what turned out to be the wrong commitments (bad luck). In other words, the strategy paradox is a consequence of the need to commit to a strategy despite the deep uncertainty surrounding which strategy to commit to. Call this strategic uncertainty.

The tool for creating strategic flexibility, called Strategic Flexibility, has four phases:

Anticipate: build scenarios of the future
Formulate: create optimal strategies for each of those futures
Accumulate: determine what strategic options are required
Operate: manage the portfolio of options

This book is not the first to observe that the future is unpredictable and that strategy making must take uncertainty into account. What is new is that here uncertainty is not an afterthought, not something one considers after commitments have been made. Instead, uncertainty is placed at the core of decision-makjng at the highest levels of the organization, and a broad range of strategic and organizational thinking has been marshaled to address the paradox created by uncertainty.

Tomorrow: The Strategy Paradox (continued)

Continue reading TECH TALK: Good Books: The Strategy Paradox (Part 3)

Here is what the description of The Strategy Paradox says (via Amazon):

A compelling vision. Bold leadership. Decisive action. Unfortunately, these prerequisites of success are almost always the ingredients of failure, too. In fact, most managers seeking to maximize their chances for glory are often unwittingly setting themselves up for ruin. The sad truth is that most companies have left their futures almost entirely to chance, and dont even realize it. The reason? Managers feel they must make choices with far-reaching consequences today, but must base those choices on assumptions about a future they cannot predict. It is this collision between commitment and uncertainty that creates THE STRATEGY PARADOX.

This paradox sets up a ubiquitous but little-understood tradeoff. Because managers feel they must base their strategies on assumptions about an unknown future, the more ambitious of them hope their guesses will be right or that they can somehow adapt to the turbulence that will arise. In fact, only a small number of lucky daredevils prosper, while many more unfortunate, but no less capable managers find themselves at the helms of sinking ships. Realizing this, even if only intuitively, most managers shy away from the bold commitments that success seems to demand, choosing instead timid, unremarkable strategies, sacrificing any chance at greatness for a better chance at mere survival.

Michael E. Raynor, coauthor of the bestselling The Innovator’s Solution, explains how leaders can break this tradeoff and achieve results historically reserved for the fortunate few even as they reduce the risks they must accept in the pursuit of success. In the cutthroat world of competitive strategy, this is as close as you can come to getting something for nothing.

Drawing on leading-edge scholarship and extensive original research, Raynors revolutionary principle of Requisite Uncertainty yields a clutch of critical, counter-intuitive findings. Among them:

— The Board should not evaluate the CEO based on the companys performance, but instead on the firms strategic risk profile
— The CEO should not drive results, but manage uncertainty
— Business unit leaders should not focus on execution, but on making strategic choices
— Line managers should not worry about strategic risk, but devote themselves to delivering on commitments

With detailed case studies of success and failure at Sony, Microsoft, Vivendi Universal, Johnson & Johnson, AT&T and other major companies in industries from financial services to energy, Raynor presents a concrete framework for strategic action that allows companies to seize todays opportunities while simultaneously preparing for tomorrows promise.

Tomorrow: The Strategy Paradox (continued)

Continue reading TECH TALK: Good Books: The Strategy Paradox (Part 2)