Strategy in a Connected World

There was a day, a long time ago (and still in a few industries) where strategic planning was run by a standard process, would have accurate forecasts for 5+ years, followed by simply executing the plan. Many forces began to change the landscape of the market, not the least of which is the interconnectedness of all parts of our business lives. The speed of change has completely changed the way organizations operate. No longer can the person at the top set the vision and goals, and cascade the actions plans down the hierarchy. In fact hierarchy has given way to flatter organizations, where input is coming from many parts of the organization constantly feeding a group of people who are not only strategizing for today, but experimenting with what will satisfy future customers as well.

One of our favorite thinkers in strategy, Rita Gunther McGraith, now trains executives to constantly create and update what she calls an opportunity portfolio. This portfolio contains small change strategy, platform based strategy, and blue ocean strategy, because the organization needs to be nimble, change direction quickly, and continuously realize that competitive advantage is temporary at best. By way of metaphor, the human body with its ability to be nimble, adaptive, responsive, and able to reinvent quickly is much better than a machine, which would need to be completely rebuilt, or scrapped altogether.

Alongside of this trend in strategic planning is a completely different one called “Remix Strategy” or “Business Combinations”. Some of the largest brands you know have created relationships with many outside organizations that can be aggregated into a whole that is much bigger than any of the single parts in value – the Apple and Google ecosystems come to mind. This remixing can be of capabilities in multiple organizations, it can be alliances, federations, or even acquisitions and mergers. These combinations run the gamut from very loose, hardly able to collaborate together to mergers, where the combinations are almost completely enmeshed to create the joint value.

An image from media will help us understand. The Avengers were a very loose knit crew, always in fighting, but they decided to check their egos a little bit to save the world together whereas the Power Rangers would all enmesh with each other to create a much larger monster to challenge the enemies – both got the job done, just very differently. When you look at all these combinations what is discovered is that three laws are central to all of these if they are to succeed:

  1. The combination of organizations must have the potential to create more value than the parties alone. Put in our metaphor, it is not focus on one organ system in the human body, but what all these organ systems create together in the whole person.
  2. The combination must be designed and managed to realize the joint value. In the language of our metaphor, the body must have a head, feedback and communication systems, many different inputs simultaneously to achieve action and goals.
  3. The value earned by each party must motivate them to contribute to the collaboration. In our metaphor, all parts of the body are needed, and be nourished with what they need in order for the joint value to be sustained over time.

Which brings me to a part of Paul’s writing about the body of Christ found in 1 Corinthians 12:  

Just as a body, though one, has many parts, but all its many parts form one body, so it is with Christ. 13 For we were all baptized by[c] one Spirit so as to form one body—whether Jews or Gentiles, slave or free—and we were all given the one Spirit to drink. 14 Even so the body is not made up of one part but of many.

15 Now if the foot should say, “Because I am not a hand, I do not belong to the body,” it would not for that reason stop being part of the body. 16 And if the ear should say, “Because I am not an eye, I do not belong to the body,” it would not for that reason stop being part of the body. 17 If the whole body were an eye, where would the sense of hearing be? If the whole body were an ear, where would the sense of smell be? 18 But in fact God has placed the parts in the body, every one of them, just as he wanted them to be. 19 If they were all one part, where would the body be? 20 As it is, there are many parts, but one body.

21 The eye cannot say to the hand, “I don’t need you!” And the head cannot say to the feet, “I don’t need you!” 22 On the contrary, those parts of the body that seem to be weaker are indispensable, 23 and the parts that we think are less honorable we treat with special honor. And the parts that are unpresentable are treated with special modesty, 24 while our presentable parts need no special treatment. But God has put the body together, giving greater honor to the parts that lacked it, 25 so that there should be no division in the body, but that its parts should have equal concern for each other. 26 If one part suffers, every part suffers with it; if one part is honored, every part rejoices with it.

Notice the same three principles coming out of the text. Paul reminds them without any one of the parts, the joint capability of the Body of Christ is diminished, and in some cases making it impossible to stay alive – 1st law. Notice that a group of Christians in this case, who are not governed or managed well (like the Corinthians at the moment) would exclude some, or fight for most importance. It is much harder to execute good strategy if the management processes are not focused on designing the interactions of the part well, with an attitude of equal regard. Finally, You notice that Paul mentions special care and honor the parts of the organization that seem weaker because if these parts do not work, or are not earning their appropriate part of the value, they will hinder the whole as the weakest link can, or quit cooperating all together.

Strategy today requires that we leave the hierarchical world of (mythical) predictable, long term forecasting, and cascaded direction and enter into the reality of the interconnected, human-body-like form.

Learn more about this topic in our podcast on Strategy in a Connected World.

Categories: Communication, Strategy, Structure

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