Sunday, May 5, 2013

The Paradox Behind the Strategy Paradox

We have always heard about the various businesses who have used the macro approach of  "focusing on one objective with their projected tactic"  regardless of the criteria of the situation.  

Without ever assessing "the configuration of their 'Big Tangible Picture (BTP)'", these organizations "grounded and pounded" their way to the finish line while missing the possible opportunities.  ... They regularly fall behind their schedule and operating miles above their given budget. 

At the conclusion of the day, their chief decision makers present the deceptive lie that their mission is progressing forward and sell it to their investors, their troops and themselves.  

Strategists point out that the highest returns come when a company focuses on a single strategy, commits fully to it, and aligns all resources accordingly. When you look back at companies that have been successful, they often appear to have used this strategy.

But investing in the big opportunity invariably brings along a chance for the big catastrophe. As Michael Raynor argues in The Strategy Paradox, because the real world in general and competitive markets in particular are filled with great unknowns, the same focus and commitment that promise the highest returns also carry the greatest risk of failure. Raynor urges businesses to make sure they have “the ability to pursue alternative strategies…depending on how key uncertainties are resolved.” Raynor further suggests that CEOs should focus not on achieving results but on managing uncertainty.

A century ago, Andrew Carnegie had this advice: “Concentrate your energies, your thoughts, and your capital. The wise man puts all his eggs in one basket and watches the basket.” But of course the risk, then and now, is that no matter how attentive and focused you are, the basket you’re watching is simply the wrong one.

The strategy paradox is that the prerequisites of success are often the antecedents of failure."

1) A successful strategy requires full commitment
2) Full commitment, in light of unpredictable futures, can mean catastrophic failure.

Sidebar: The message of this approach reminds us of a similar message from the Cult of The Art of War. We will touch on that particular topic one day.

The Paradox
Telling people to focus on the potential positives of a project without ever being mindful of its possible negatives is like lighting a cigar while standing on a puddle of gasoline that leads to a gas station's fuel pump. Those who cannot see the Big Tangible Picture, would not be able to gain any long term commitment from their associates.

Excellence is the only attribute that one should be committed. One should not  behave like those who are described in Lord Tennyson's "Charge of the Light Brigade."

For obvious reasons, successful strategists or smart expediters would not want to participate in a lost cause.

Questions from The Compass Desk
If you are competing in an unpredictable setting , do you think that this generalized "kitchen sink" strategic approach would work?  ... 

Does Mr. Raynor's approach has a strategic process model that heeds their competition's reaction?  

After assessing your Big Tangible Picture, are you able to forecast the predictability and the position of your situation? ... Do you ever think whether you and your team are capable of adjusting to the configuration of the situation before the grand change factor is restarted again?   

How do you assess the risk behind your projected objective and the approach?
The companies who have faltered by utilizing this approach. Would they ever admit to the failure of this approach of overcommitment? 

The Preliminaries to The Compass Solution
Commitment begins when the principal stakeholders accepted the risk benefits and the risk consequences behind the Big Tangible Picture that is connected to their goal. 

However, the commitment will diminish when the setbacks begin to accumulate.  To prevent this from happening, successful strategists are focused on creating positive momentum by making their first few moves to be strategically correct.

Side note: 
In most cases, the acceptance are one of the factors that determines the quality of the work.

Those who possessed the proper leadership qualities (wisdom, credibility, benevolence, courage and discipline), are able to influence people to commit to a cause. All of those five leadership qualities are always needed to maintain the total unity within the team.

Occasional assessment of the configuration behind the Big Tangible Picture would usually enable the successful strategist to determine the nuance of who is committed.

The Compass Reminder
To thrive in a chaotic setting. reading one's own Big Tangible Picture before implementing a strategic move and preparing one's self on how to adjust to situational changes are two essential keys that  successful strategist 

We will discuss more about our solution in a future post.

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