strategy out of chaos webster university leiden, 8 april 2002
TRANSCRIPT
Strategy out of Strategy out of ChaosChaos
Webster UniversityLeiden, 8 April 2002
Henk Hogeweg MBA
Field of work: strategy and change management
Consulting and Interim Management
One of the initiators of www.chaosforum.com a society thinking about Chaos Theory and Complexity
Management Book Reviews for www.managementboek.nl
Co-author ‘In Control with Chaos’ and ‘Consulting with Chaos’
Author of ‘Professionals & Interim Management’
Overmars Organisatie Adviseurs in De Bilt
How do YOU draft strategy? Started spontaneously by a small group of
people A pattern develops in time as a result of
the internal system structure Strategy grows from the search for the
solution of a random problem That what has happened gets (new)
meaning afterwards and that’s called the strategy
Strategy consists of a lot of self-fulfilling prophecy (action-reaction-action-reaction-etc.)
Drafting strategy is difficult. You can’t predict future human behavior and hear drivers
In spite of the complexity and unpredictability our collective organizational behavior appears to be rather predictable over time because of the patterns we seem to follow
As ‘outside’ the hectic increases we have to organize ourselves more loose to absorb the hectic. That’s why our own behavior sometimes is so incomprehensible and unpredictable
We are self-designing
In the end we all depend on the improvisation capacity of our people
Thought up and worked out upfront by a group
Originates explicitly by forces from outside the organization
Strategy is developed by a group of employees depending on each other and with a common goal
Strategy is the result of the widely spread wished future state
Change of strategy is adjusting to changes environmental variables
Drafting strategy is a useful activity. Most of the time the predictions become reality
The complexity of live makes it necessary to change the organization radically every few years. In that way our organizational behavior is unpredictable
As ‘outside’ the hectic increases we have to be more in control to find the right answers collectively. That makes our behavior predictable
We decide on the next step using environmental variables
As we disciplinary execute the planning and control cycle everything will be OK
-3 -2 -1 0 +1 +2 +3
What is Strategy?(Karl E. Weick)
Article Henry Mintzberg(NRC 4 maart 2000)
Drafting strategy is like pottery
Is business a poker game or justdoing the best you can everyday?
There is something in the air
Sometimes a strategy is brilliant.Sometimes it’s like muddering onwhen totally unexpected and unprospected a uniquePossibility pops up. Often the genius is brought inAfterwards.
Intelligent bees and stupid flies
’Let’s say, you put the same number of bees and flies in a bottle.You put the bottle horizontal with the bottom turned to the light. The bees
think they are smart. They know from their hive-experience (= best- practices) that the way out is there where the light comes from. So they
swarm to the bottom of the bottle and keep on trying to get out there(= more of the same). The non-programmed, stupid flies know nothing about this and are just flying around. Within five minutes all flies have
found the way out of the bottle while the bees are still trying the bottom and die of hunger and exhaustion. The problem is that we have too many
bees drafting strategy and not enough flies’(Henry Mintzberg in NRC 4 maart 2000, page 16)
The conventional methodPlanning & Control cyclPlanning & Control cycle (De Wit – e (De Wit – Meyer)Meyer)
Strategy (by Mintzberg)
Realizedstrategy
Intendedstrategy
Unrealizedstrategy
Emergent strategy
Deliberate strategy
What’s strategy about according to Mintzberg? creativity intuition persevere open mind coincidence learning capacity
Resourced bases schoolComplex / Chaotisch
Simple / Rational
Complex / Chaotic
Environment /Simple / Rational
designschoolentrepreneurial
school
organizationalaction school
organisationallearningschool
planningschool
positioningsschool
chaosschool
incrementalistschool
more emergent
more deliberate
Strategy Schools
the experts speak:
‘We don’t like their sound. Groups of guitars are on the way out.’ (A Decca Records co-executive about The Beatles in 1962).
‘The phonograph ... is not of any commercial value.’ (Thomas Alva Edison, the inventor himself in 1880).
‘There is no reason for any individual to have a computer in their home.’ (Ken Olson, president, Digital Equipment Corporation in 1977).
Re-formulating Here & Now(internal zapping)
STRATEGY IS:
The future hasThe future hasstarted today!started today!
Dilemma’s
Choosendilemma
complex paradoxalsituation
alternative 1 alternative 2
Valuesystem 1
Valuesystem 2
Various alternatives
based on values
between which a
tensed relationship
exists that can hardly
,or even impossibly,
be combined.
Examples of dilemma’s
Business:• Should say goodbye to my
biggest customer?• Do I really want this merger
or alliance?• Will my son take over the
business?• Do I have the guts to re-design
the main process?• Do I have the guts to change?
(between the ears)
Personal:• Should I keep this job or take
the other?• Do I want to start my own
business?• Which of the kids will be
general manager?• Study or work?• Do I have a life of my own?• Am I connected?
Elements of Chaos Thinking
CONCEPTS
Self-organizationand planning
Intuition and embodiedknowledge
Coincidence
Profoundunderstanding
Richenvironment
Paradigm andinternal zapping
CONTEXTFactors
(McDonaldisation)and Actors
3/4
1/2
V ?
3/4
H/V
H
H/V
1/2
Paradigm A set of pre-assumptions, built up in our history, which we use in every
new situation we have to deal with.
A lens which we use to look at the world and that determines what we see and experience.
A (personal) set of assumptions and pre-occupations about life and the world, most of the time under the level of our consciousness and thus seldom discussed.
The result of shared experiences in the past, recognized in our behavior, with what we automatically (without thinking) do complex tasks.
Prahalad:‘The dominant logic’
Aspects of “Organizational intelligence”
DATA Reinforced
behavior
Measures ofperformance
Values &Expectations
Competitivestrategy
Analytics and dominant
logic
Aspects of “Organizational learning”
Complexity at the dinner table
About settingthe table
About eating
About chaos
About taste
Aboutorganizing
About daily work
About change
About patterns
About strategyAbout shopping
What can we learn from that?
Chaos = lots of short stories, that have a hidden structure and influence each other. So, everything is connected with
everything. Behavior is unpredictable, but not
random Renewal starts with letting existing
structures (also between the ears) go.
Learning points homevideo(self-organization) Big changes start small Fundamental changes are not designed upfront, but appear to be good
strategies afterwards In the details you recognize the big The idea (intuition) goes ahead of thinking Change is a different way of looking (internal zapping, choosing a
context) The future has already started (self-organization)
Evolution
Golf I:
Golf II:
Level and characterof growth and change
Time
window ofstarting points
Changing phasesIt’s a bit of luck and choosing the right context
Co-creation & evolution
Golf I:
Golf II:
Level ofsystemfunctionality
TimeCTSCTSSS FFSFFS TCTC
dilemma
Golf I:
Golf II:
Character and levelof growth and change;Level of systemfunctionality
Time
I II
III IV
(best practices)
Window of starting points
(self-organization)
1.Define the axes with the
dominant and the weak underlying values
2.Name the windows
- Horizontal = acting: . Left = stay
. Right = move- Vertical = thinking . Up = current thinking . Under = new thinking
Old acting
New thinking
Old thinking
New acting
Defining the underlying values in the window of starting points
From scenario’s to strategy
Scenario 1 Scenario 2 Scenario 3 Scenario 4
NewStrategy
Consequences1
Consequences2
Consequences3
Consequences4
Strategyevaluation
Consequences for the control cycle
Measuring with two measures
Wrap up(Co-creation)
Contexts
Thinking
Live
Contexts
Thinking
Live
Conclusion of our little research Right: the design school Left: the chaos school
Definition of Strategy according to methe (learning of) re-formulating Here & Now