The Complexity of Strategy & Managing Strategic Discourse - Assignment Example

The Complexity of Strategy & Managing Strategic Dis Introduction It has been proposed by many that complexity is always a part of strategic process. Although this shocking fact may not seem true of traditional strategy, modern-day strategy definitely follows this type of pattern and is composed of various different parts. The purpose of this paper is to critically discuss this view in relation to an organisation developing its strategy In the process, the goal is to discuss new ways of thinking about strategy, describe the process of modelling complexity, discuss the practice perspective, define the term ‘strategist,’ discuss where strategy happens, and discuss how the writer can influence strategy. Critical Evaluation Complexity Perspective: New Ways of Thinking about Strategy? It can be challenging for organizations to develop strategy in an unpredictable, chaotic, and rapidly-changing world, especially since they have no control over the resources it takes for them to be successful at the feat. With globalisation taking off to a new time high, strategies must continuously be made, altered, implemented, and evaluated, which can cost an organization a great deal of money if they fail to do it properly. The traditional approach to formulating strategies began in the 1960s and was logical and step-by-step in nature (Turner, 1998). “It was conceived as a rational, sequential process. Define your objectives, analyse your position, evaluate alternative courses of action, select your strategy and implement it” (Turner, 1998, pg. 1). This process kept thinking and doing as completely separate but equally important actions because planning functions were separated and kept at the top of the organizational chart near the members of the highest executive management team. After times have changed, it’s time to move those processes down the infamous corporate ladder as well (Turner, 1998). It was during the 1980s that many of the existing traditional strategic plans began to fail and experts began to question the traditional approach to formulating strategies for their own organizational use. They feared what would happen otherwise. Clearly, times wee beginning to change and the old ideas just were not working for these organizations anymore. It was time for a change—a step in the right direction—that would put organizations ahead of their competitors. According to Turner (1998, pg. 1), “We know, they said, that decisions in organisations are usually taken with only partial understanding of the situation. Trial and error more closely approximates reality in most organisations. Many strategies emerge gradually over time: sometimes, indeed, strategy is a post-hoc rationalisation of activity which is already ongoing.” Incremental approaches such as the one that has been described here are quite a bit more attractive to managers since they can easily relate it to the sloppiness of corporate living. It is not to ‘perfect’, per se, to be used by the typical person running or managing an organization. “ But "emergent strategy" offers little guidance to managers struggling with the problem of navigating their companies in an uncertain world.” (Turner, 1998, pg. 1) The fact is that neither the traditional nor the incremental approach is really valid. “The traditional approach assumes that the future is understandable and predictable and that action follows thought. The incrementalist approach is essentially reactive” (Turner, 1998, pg. 1). Fortunately, insights from the natural sciences can enable us to address the problem of strategy and uncertainty. These insights come from the emerging body of thinking known as complexity theory. Most of our current theories of economics and organisation are based on linear logic, where cause and effect are closely linked.” (Turner, 1998, pg. 2). According to a more recent non-linear approach that has been developed, future events are completely unpredictable because even one seemingly insignificant change in one area can trigger large changes throughout an organization. This makes for a highly complex system, which is a system that is comprised of quite a few properties (Turner, 1998). Simply describing the parts of which the organizational (or any type of system) system is comprised will not explain its behaviour patterns. It takes time for these types of behavioural patterns to develop and they develop in such a manner that is non-linear in nature. According to Turner (1998, pg. 2) on the topic of system complexity, “For example, some technological innovations like computers may develop slowly over many decades. Suddenly, because of the bringing together of distinct technological breakthroughs and/or the discovery of new applications, technologies take off and expand exponentially in a very short time. Complexity theorists refer to this as ‘punctuated equilibria’” Industry breakpoints are an extremely important component of complexity theory. These industry breakpoints occur after a product has been produced over and over again, enough to, over time, become standardized. Then, a new product comes out or a process or distribution channel changes and stirs things up, creating a type of chaos or complexity (Turner, 1998). According to Turner (1998, pg. 4), “The traditional approach to strategy is based on the notion of "fit": align the companys internal strengths with its external environment. This notion of fit works well when the fundamentals of the business environment remain the same. Fit enables companies to maximise their natural competitive advantage. But faced with radical discontinuities, like industry breakpoints, too much "fit" can prevent a company from making necessary adjustments to compete in a new era. Complexity theory suggests that organisations respond best to fundamental change if they are not perfectly aligned with their environment but poised on the ‘edge of chaos’.” There are quite a few ways in which an organization may position itself in such a manner where it can successfully complete the tasks above. First of all, it can encourage open communication so that people come together and drive positive changes of their own free will instead of because they are being told to do so. Second, they can put together groups and give them problems or paradoxes to work out without attempting to predict what the group will decide. Third, they can cross-train and rotate employees throughout the organization so that they become used to change and gain valuable experience (Turner, 1998). Diversity can be increased in the workplace even more so than it has been. Involve people in important decision-making who are not usually involved at that level. Fourth, reliance on the current management team should be reduced. Fifth, parallel advances should be endured. Sixth, excessive ‘fit,’ as described above, should be avoided. Finally, anxiety levels should be reduced as much as they possibly can (Turner, 1998). Turner (1998, pg. 5) speaks of the concept of complexity theory by telling his readers that, “Complexity theory challenges our existing view of strategy and shifts our thinking away from "steady state" concepts like: vision, mission, leadership and core businesses. It emphasises process and organisational dynamics, at the expense of content and analysis. It highlights the necessity for experimentation in strategy, but critically it also underlines the importance of revolutionary changes in business logic and competitive behaviour.” Complex Adaptive Systems: Modelling Complexity One can seek out patterns in complex systems in order to understand and model them. Descriptions alone are inadequate. “The operational model of the complexity paradigm is a complex adaptive system (CAS). Example of CAS would include economies, ecologies, weather, traffic, social organizations, and cultures, to name but a few. A CAS behaves/evolves according to three key principles: order is emergent as opposed to predetermined, the systems history is irreversible, and the systems future is often unpredictable.” (Dooley, 1996, pg. 1). The Practice Perspective Practice systems work in opposition to network analysis and systems theory. A practice approach longs to know what is happening in the present. Although various degrees the practice perspective is seen a wide variety of different disciplines, there are some overlapping areas that warrant mentioning for the purposes of this assignment. These include practice is conceived of as activities or sets of activities. How these are demarceted, labeled and analyzed may vary; activities are built on knowledge, skills or competences of those performing the activities or of the community in which the activities are performed; and practice involve humans” (Project as a Practice, 2008, pg. 1). Humans exist within a practice, and institutions and social structures are a result of this fact. Before one can understand this, however, it is first necessary to understand the definition of the field of practise. It is as follows: "The field of practice is the total nexus of interconnected human practices. The practice approach can thus be demarcated as all analyses that (1) develop an account of practices, either the field of practices of some subdomain thereof (e.g. science), or (2) treat the field of practice as the place to study the nature and transformation of their subject matter." (Project as a Practice, 2008, pg. 1) Managing Strategic Discourse: What is a strategist? According to the text of Merriam-Webster’s online dictionary (2008, pg. 1), a strategist is “a person skilled in strategy,” which in turn is, “Top of Form the science and art of employing the political, economic, psychological, and military forces of a nation or group of nations to afford the maximum support to adopted policies in peace or war (2): the science and art of military command exercised to meet the enemy in combat under advantageous conditions b: a variety of or instance of the use of strategy 2 a: a careful plan or method : a clever stratagem b: the art of devising or employing plans or stratagems toward a goal 3: an adaptation or complex of adaptations (as of behavior, metabolism, or structure) that serves or appears to serve an important function in achieving evolutionary success .” Strategy has its roots in military operations from a long time ago. Observing its success from afar, businesspeople and management teams of organizations discovered its potential and adapted it for use within their own organizations. Supposedly, this was quite an easy process because not much had to be altered in the adaptation (Nickols, 2000). Nickols (2000, pg. 1) tells readers that “In business, as in the military, strategy bridges the gap between policy and tactics.  Together, strategy and tactics bridge the gap between ends and means. In short, strategy is a term that refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides general guidance for specific actions in pursuit of particular ends.” “No matter which definition of strategy one uses, the decisions called for are the same. These decisions pertain to choices between and among products and services, customers and markets, distribution channels, technologies, pricing, and geographic operations, to name a few. What is required is a structured, disciplined, systematic way of making these decisions. Using the "driving forces" approach is one option. Choosing on the basis of "value disciplines" is another. Committing on the basis of "value-chain analysis" is yet a third. Using all three as a system of cross-checks is also a possibility” (Nickols, 2000, pg. 2). Where Does strategy happen Strategy can happen anywhere. It is most often used in the context of organizations of various sizes, but even an individual at home can plan, implement, and evaluate a strategy. There are no real limits to who can use them. Anyone with a goal in mind needs strategy to get there. “Organizations effective at strategy implementation successfully manage six strategy supporting factors”:     1.  Action Planning      2.  Organization Structure      3.  Human Resources      4.  The Annual Business Plan      5.  Monitoring and Control      6.  Linkage. These are the organizations who make it in the long run (Birnbaum, 2008). According to Nickols (2008, pg. 1), “Strategy is many things: plan, pattern, position, ploy and perspective. As plan, strategy relates how we intend realizing our goals. As pattern, strategy is the "rhyme and reason" that emerges in the course of making the endless decisions that reconcile the reality we encounter with the aims we hold dear. As position, strategy is the stance we take: take the high ground, be the low-cost provider, compete on the basis of value, price to what the market will bear, match or beat the price offered by any competitor, let no threat go unmet. As ploy, strategy is a ruse, it relies on secrecy and deception: "Let not thy left hand know what thy right hand doeth." As perspective, strategy is part vantage point and part the view from that vantage point, particularly the way this view shapes and guides decisions and actions.” Nickols also claims that strategy is ubiquitous, an abstraction, the art of the general, a general plan of attack, definition and destination, a set of decisions made, and execution (2008). How can I influence it? There are certain questions that every manager must ask when planning to implement new strategies. These questions deal with mission and vision (who the company is, what they do, why they are here, what kind of company they are, what kind of company they want to become, and what kind of company must they become); corporate strategy (what is their current implicit or explicit strategy and what assumptions have to hold for it to be true, how does the outside environment look, what are their goals, and in which markets, businesses, and geographic areas will they compete). (Nickols, 2000) There are also very similar types of questions that deal with the topic of competitive strategy (what is their current implicit or explicit strategy and what assumptions have to hold for it to be true, how does the industry and competition look, what are their goals, what products/services will they offer, whom will they offer these products/services to, who makes selling and buying decisions, how will the products be distributed, what technology will be used, what will they require and what is the most important, what will they make, buy, and acquire, and what are their options). (Nickols, 2000). Marwell & Schmitt have developed 16 different influence tactics that managers can use on employees, within their organization in general or to influence the outcome of strategies themselves. According to them, “This is Marwell & Schmitts Taxonomy of 16 influence tactics. Its a "classic" taxonomy (from 1967) that inspired a lot of subsequent research, writing, and thinking about the topic of influence. It is still used in modern research as a starting point” (Marwell & Schmitt, 2008, pg. 1). Their influences are rewards, punishments, positive expertise, negative expertise, liking/ingratiation, gifting/pre-giving, debt, aversive stimulation, moral appeal, positive self-feeling, negative self-feeling, positive altercasting, negative altercasting, altruism, positive esteem of others, and negative esteem of others (Marwell & Schmitt, 2008). Is Complexity Always a Part of Strategic Practice? In short, the answer is yes. Even in traditional times, managers could not accurately predict changes and chaos that might lie ahead. This is particularly true since even the smallest change on the lowest level can cause a domino effect that sends ripples throughout the entire organization. Complexity is especially a part of strategic practice today. In today’s global world, decisions have to be made a lightning speed and they have to be accurate. There is little room for guesswork, yet much guesswork has to be made since nothing is absolutely certain, no matter how it may seem. The best a management team can do is construct a well-educated and well-planned strategy, follow it to the letter, and try their best to succeed. An Example These are example goals and strategies that were planned and implemented by a bookseller (The Write Market, 2008): “These are goals, strategies, and measuring techniques weve used and have worked successfully (meaning we achieved our goals).” 1. Goal: Keep visitors at our site an average of 2 more pages per visit. Strategy: Put "Next" buttons on the bottom of each page in order to lead people to the next page. Measurable: Go into the site logs and compare the average # of pages hit per visit for four weeks before and after adding the navigational buttons. 2. Goal: To increase sales of our book by 5 sales this month at Amazon. Strategy: Get our book reviewed at Amazon by an independent reviewer. Measurable: Compare number of sales the month after the review with the number of sales during the month prior to the review. 3. Goal: Increase visitors to website by 50 unique visits per week from search engines. Strategy: Optimize 10 web pages of the site for keyword frequency and meta tags, submit to 6 most popular search engines. Measurable: When the pages are indexed and ranking, use Web Position Gold to compare the number of referrals from search engines for three months prior to and three months following the optimization. 4. Goal: Increase number of newsletter subscribers by 25 people per week. (The Write Market, 2008, pg. 1) Conclusion It is true that complexity is always a part of strategic process. The purpose of this paper has been to critically discuss this view in relation to an organisation developing its strategy and, in the process, discuss new ways of thinking about strategy, describe the process of modelling complexity, discuss the practice perspective, define the term ‘strategist,’ discuss where strategy happens, and discuss how the writer can influence strategy. It is the very nature of the global marketplace and economy today that makes it so essential for managers to learn how to deal with complexity in strategic processes. Just a quick plan jotted down on paper is simply not enough anymore. It requires hardcore thinking and critical analysis. It is something with which every person in the organization needs to become involved in and be a significant part of if it is to work correctly. It cannot be too structured or fit however, as it will have no flexibility. Flexibility is required of today’s organizations in a variety of ways. Managers have to be ready to adapt to change at the last minute with or without a warning. Even small, seemingly insignificant changes that happen on lower levels within an organization can shoot right to the top and cause major problems within a short period of time. For this purpose, it is important that everyone understand that strategy always involves complexity. References Birnbaum, I. 2008, ‘Strategy implementation: Six supporting factors.’ [Online] Available at http://www.birnbaumassociates.com/strategy-implementation.htm. Dooley, K. 1996, ‘ Complex adaptive systems: A nominal definition’, Arizona State University, [Online] Available at http://www.eas.asu.edu/~kdooley/casopdef.html ‘Marwell & Schmitt’s 16’, 2008. Working Psychology. [Online] Available at http://www.workingpsychology.com/marwell.html Nickols, F. 2000, ‘Strategy: Definitions and meaning’, Distance Consulting, [Online] Available at http://home.att.net/~nickols/strategy_definition.htm ‘Strategist’, 2008, Merriam-Webster Online, [Online] Available at http://aolsvc.merriam-webster.aol.com/dictionary/strategy Turner, I. 1998, ‘Strategy, complexity and uncertainty’, Pool Business and Marketing Strategy, [Online] Available at http://www.poolonline.com/archive/iss1fea5.html ‘What is practice’, 2008, Project as Practice. [Online] Available at http://www.project-as-practice.org/index.php/What_is_practice Read More