structured_chaos

8/7/2019 structured_chaos

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Competing on the EdgeCompeting on the Edge

Strategy as Structured ChaosStrategy as Structured Chaos


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Change is pervasiveChange is pervasive react quicklyreact quickly

anticipate when possibleanticipate when possible

lead change where appropriatelead change where appropriate

competing on the edge is...competing on the edge is...

unpredictableunpredictable

often uncontrolledoften uncontrolled

often inefficientoften inefficient

best practice when change is pervasivebest practice when change is pervasive


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Theory and ResearchTheory and Research ResearchResearch

inin--depth research with 12 globaldepth research with 12 globalbusinessesbusinesses

interviews with 100+ managersinterviews with 100+ managers

TheoriesTheories

complex adaptive systemscomplex adaptive systems

evolutionary changeevolutionary change

origins of timeorigins of time


4/18

Edge of ChaosEdge of Chaos intermediate state between order andintermediate state between order and

chaoschaos

organizations do not settle into a stableorganizations do not settle into a stableequilibrium but never quite fall apartequilibrium but never quite fall apart

zone where all types of systemszone where all types of systems----

biological, physical, economic, socialbiological, physical, economic, social----are most vibrant and flexibleare most vibrant and flexible


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Laws of competing on the edgeLaws of competing on the edge 10 rules that articulate key assumptions10 rules that articulate key assumptions

and best practices aboutand best practices about

strategystrategy

organizationorganization

leadershipleadership


6/18

StrategyStrategy Rule 1: Advantage is TemporaryRule 1: Advantage is Temporary

continuously generate new sources ofcontinuously generate new sources ofadvantageadvantage

change as opportunity, not threatchange as opportunity, not threat


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Rule 2: Strategy is Diverse, Emergent,Rule 2: Strategy is Diverse, Emergent,ComplicatedComplicated

diverse collection of moves, loosely linkeddiverse collection of moves, loosely linkedin a semiin a semi--coherent directioncoherent direction

let strategy emergelet strategy emerge

play a broad array of options and expect toplay a broad array of options and expect toshift strategy over timeshift strategy over time


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Rule 3: Reinvention is the goalRule 3: Reinvention is the goal

seek new ways to create value, rather thanseek new ways to create value, rather thanfocus on efficiencyfocus on efficiency

focus on innovative products andfocus on innovative products andprocessesprocesses

profitable fortresses are rareprofitable fortresses are rare


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I cant say that we had a reallyI cant say that we had a really

smart strategy going forward.smart strategy going forward.We had a strategy and when itWe had a strategy and when itdidnt work, we went back anddidnt work, we went back and

regrouped until we finally hit onregrouped until we finally hit onsomething.something.

----Phil Knight, CEO, NikePhil Knight, CEO, Nike


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Rule 5: Stretch Out the PastRule 5: Stretch Out the Past

exploit derivative productsexploit derivative products

extend offerings to new market segmentsextend offerings to new market segments

refresh existing businesses with learningsrefresh existing businesses with learningsfrom new venturesfrom new ventures

but guard against being locked intobut guard against being locked intooutdated competitive modelsoutdated competitive models


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Rule 6: Reach into the FutureRule 6: Reach into the Future

manage a longer time horizonmanage a longer time horizon

launch more experimental products andlaunch more experimental products andservicesservices

create more alliances geared towardcreate more alliances geared toward

nascent markets and emergingnascent markets and emergingtechnologiestechnologies

employ more futuristsemploy more futurists

revisit the future oftenrevisit the future often


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Rule 7: Time Pace ChangeRule 7: Time Pace Change

set a rhythm and tempo aroundset a rhythm and tempo around

number of new products and services offerednumber of new products and services offeredper yearper year

refreshment of brandsrefreshment of brands

building manufacturing capacitybuilding manufacturing capacity

try to match tempo to change to rhythm oftry to match tempo to change to rhythm ofmarketmarket

choreograph transitions in products,choreograph transitions in products,

acquisitions, etc.acquisitions, etc.


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It was all in the rhythm. Have youIt was all in the rhythm. Have you

ever seen Michael Jordan playever seen Michael Jordan playwhen he is on a rhythm run? Itwhen he is on a rhythm run? Itwas exactly like that.was exactly like that.

----billionaire businessmanbillionaire businessmancommenting on his successcommenting on his success


15/18

LeadershipLeadership Rule 8: Grow the StrategyRule 8: Grow the Strategy

grow the business like a prairie, notgrow the business like a prairie, not

assemble it like a toasterassemble it like a toaster

dismantle megastructuresdismantle megastructures

pay attention to the order in whichpay attention to the order in which

strategy is grownstrategy is grown begin with current businesses, then incorporatebegin with current businesses, then incorporate

the past and work in future opportunitiesthe past and work in future opportunities

never start with the future but rather with thenever start with the future but rather with the

basics of todaybasics of today


16/18

Rule 9: Drive Strategy from theRule 9: Drive Strategy from theBusiness LevelBusiness Level

strategy cannot be driven topstrategy cannot be driven top--downdown----thethepace of change is too fast for tricklepace of change is too fast for trickle--downdown

success comes from skilled, fast and agilesuccess comes from skilled, fast and agile

moves at the business levelmoves at the business level


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Rule 10: Repatch Businesses to MarketsRule 10: Repatch Businesses to Marketsand Articulate the Wholeand Articulate the Whole

continuously realign businesses withcontinuously realign businesses withemerging opportunitiesemerging opportunities

senior managers articulate and occasionallysenior managers articulate and occasionally

shape emergent strategyshape emergent strategy


18/18

I thought it best to shut up andI thought it best to shut up andlisten.listen.

----CEO commenting onCEO commenting onstrategy meeting withstrategy meeting with

key business leaderskey business leaders

structured_chaos

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