Hey, Tom. I totally agree we need some kind of plan. And that it’s also "astronomically unlikely that your Plan A nails everything you don’t know yet".
So when uncertainty is high, we need a strategy. Our strategy helps us devise said plan in the first place. It also helps us adapt as our plan inevitably unfolds (euphemism alert) differently than we hoped.
How? By defining a "strategy rule" that tackles what's in the way of achieving our aspiration. The rule is at the heart of a strategy framework which helps us align our (planned) actions. Adhering to our self-imposed rule also helps us make better decisions as we walk down the road.
This comes from Peter Compo's excellent book 𝙏𝙝𝙚 𝙀𝙢𝙚𝙧𝙜𝙚𝙣𝙩 𝘼𝙥𝙥𝙧𝙤𝙖𝙘𝙝 𝙩𝙤 𝙎𝙩𝙧𝙖𝙩𝙚𝙜𝙮. As we've talked about before, I think there's a lot of common ground with his approach and your own. Particularly Multiverse Mapping, of course 😊
I'm going to do what kind of rubs me up the wrong way sometimes when people ask ... but what's an example? It's one thing to say we need a Strategy Rule (or as Rumelt would have it, a Guiding Policy), and quite another to come up with one – at least one that holds into the uncertain future.
I suspect that often these things are clearer with hindsight than they are in the midst of the fog: "Ah yes, as it turned out, the most important factor was ..."
Maybe "make Multiverse Maps and probe the most uncertain elements" is a Strategy Rule?
For sure, Tom. I don’t mean retrofitting a company’s winning strategy (survivor bias, etc). For “adaptive strategy” to make sense, we must state the strategy in advance, or it’s just “adaptive operations”. Which may be fine, but let’s not call it strategy.
The “strategy rule” is derived from the bottleneck to the aspiration.
EXAMPLE: An ERP-product firm aspires to “generate 15% more profit by end of 2026”. Bottlenecks include not having enough devs to put on new projects, whale clients with competing needs, not knowing what product is most profitable, and various other things.
They generate strategy alternatives: “build a new product”, “tailor to whale clients and hope to spin off new products”, “serve new segment (small firms)”, or “partner with firm X”.
Management doesn’t want to dilute equity so they kill the partnering option. Their dominant bottleneck is not being sure if small firms will buy.
STRATEGY RULE: “Explore simplified core product for small firms. No new features that don’t work for new segment.”
It aligns everyone, provides real-time guidance and has a trade-off (they may lose a whale client).
And, yes. “Make Multiverse Maps and probe the most uncertain elements” would be a good tactical rule. Make sense?
Thanks so much for the clarification, yes that makes sense.
I think the main question I have for the “dominant bottleneck” approach (also a la the Crux) is that situations are often modulated by several contributing constraints (several bottlenecks) where no single one is truly dominant, and where different people within the org perceive different constraints as dominant.
I can also see that there’s often an anointed strategist who crafts a narrative about a dominant bottleneck, weaving together a few constraints. Is that the crux of the game?
(This may be descending into angels dancing on heads of pins territory - I suspect there’s a lot more we agree about than differ on!)
Couple of things here, Tom. I agree there can be many constraints, and also that diagnosing the dominant one may be tricky, or even impossible. But the strategy may involve "small bets" (or experiments), as noted above.
Also, "anointed strategist" suggests you don't like the ritualistic and mystical overtones. I'd agree with that, too. A process, like the Strategy Alternative Matrix (SAM) in Peter Compo's 'Emergent Approach to Strategy', or your own Multiverse Mapping, can be much more inclusive. Someone may take the initiative to map it. But they don't have to be the leader or the "strategy shaman" 😊
I really like the idea from your introductory session of having small groups make independent maps and then compare notes. That should lead to a more rounded diagnosis.
Hey, Tom. I totally agree we need some kind of plan. And that it’s also "astronomically unlikely that your Plan A nails everything you don’t know yet".
So when uncertainty is high, we need a strategy. Our strategy helps us devise said plan in the first place. It also helps us adapt as our plan inevitably unfolds (euphemism alert) differently than we hoped.
How? By defining a "strategy rule" that tackles what's in the way of achieving our aspiration. The rule is at the heart of a strategy framework which helps us align our (planned) actions. Adhering to our self-imposed rule also helps us make better decisions as we walk down the road.
This comes from Peter Compo's excellent book 𝙏𝙝𝙚 𝙀𝙢𝙚𝙧𝙜𝙚𝙣𝙩 𝘼𝙥𝙥𝙧𝙤𝙖𝙘𝙝 𝙩𝙤 𝙎𝙩𝙧𝙖𝙩𝙚𝙜𝙮. As we've talked about before, I think there's a lot of common ground with his approach and your own. Particularly Multiverse Mapping, of course 😊
Thanks!
I'm going to do what kind of rubs me up the wrong way sometimes when people ask ... but what's an example? It's one thing to say we need a Strategy Rule (or as Rumelt would have it, a Guiding Policy), and quite another to come up with one – at least one that holds into the uncertain future.
I suspect that often these things are clearer with hindsight than they are in the midst of the fog: "Ah yes, as it turned out, the most important factor was ..."
Maybe "make Multiverse Maps and probe the most uncertain elements" is a Strategy Rule?
For sure, Tom. I don’t mean retrofitting a company’s winning strategy (survivor bias, etc). For “adaptive strategy” to make sense, we must state the strategy in advance, or it’s just “adaptive operations”. Which may be fine, but let’s not call it strategy.
The “strategy rule” is derived from the bottleneck to the aspiration.
EXAMPLE: An ERP-product firm aspires to “generate 15% more profit by end of 2026”. Bottlenecks include not having enough devs to put on new projects, whale clients with competing needs, not knowing what product is most profitable, and various other things.
They generate strategy alternatives: “build a new product”, “tailor to whale clients and hope to spin off new products”, “serve new segment (small firms)”, or “partner with firm X”.
Management doesn’t want to dilute equity so they kill the partnering option. Their dominant bottleneck is not being sure if small firms will buy.
STRATEGY RULE: “Explore simplified core product for small firms. No new features that don’t work for new segment.”
It aligns everyone, provides real-time guidance and has a trade-off (they may lose a whale client).
And, yes. “Make Multiverse Maps and probe the most uncertain elements” would be a good tactical rule. Make sense?
Thanks so much for the clarification, yes that makes sense.
I think the main question I have for the “dominant bottleneck” approach (also a la the Crux) is that situations are often modulated by several contributing constraints (several bottlenecks) where no single one is truly dominant, and where different people within the org perceive different constraints as dominant.
I can also see that there’s often an anointed strategist who crafts a narrative about a dominant bottleneck, weaving together a few constraints. Is that the crux of the game?
(This may be descending into angels dancing on heads of pins territory - I suspect there’s a lot more we agree about than differ on!)
Couple of things here, Tom. I agree there can be many constraints, and also that diagnosing the dominant one may be tricky, or even impossible. But the strategy may involve "small bets" (or experiments), as noted above.
Also, "anointed strategist" suggests you don't like the ritualistic and mystical overtones. I'd agree with that, too. A process, like the Strategy Alternative Matrix (SAM) in Peter Compo's 'Emergent Approach to Strategy', or your own Multiverse Mapping, can be much more inclusive. Someone may take the initiative to map it. But they don't have to be the leader or the "strategy shaman" 😊
I really like the idea from your introductory session of having small groups make independent maps and then compare notes. That should lead to a more rounded diagnosis.
Cogent and useful post, thanks Tom!
This is great Tom, really good. Simple but clear. Thanks for posting.
Marvin
Thanks for this! ❤️