10. VUCA Integration Flashcards
Competing on the Edge
companies need to literally sit on the knife-edge when thinking about their strategies
Allows a firm to change constantly and let a semi-coherent direction emerge
Assumptions in Competing on the Edge
The environment is rapidly and unpredictably changing
- central strategic challenge is to manage change. No static equilibrium
Traditional approaches are built on unrealistic assumptions
- Overemphasises predictability and lasting strategic positions
- Underemphasises development and execution of actual business plans
Deviation of practice and theory
The Current Phenomenon [MCT]
Marketplace is in constant flux: Non-static equilibrium; Non-benign operating environment; Creative destruction/ disruptive innovation
Competition: Strategic alliances and importance of ecosystems; System and market level
Coopetition : collaboration; competition
Technology is constantly shifting: Time pacing, Event pacing, Adaptability, Agility
Firms are Complex Adaptive Systems
Firms are systems with numerous parts, agents and stakeholders: Not a singular entity
Complex: close dependencies and intermediate relationships; self-organised behaviour emerges; diverse interacting agents in a dy-namical system
Self-organised: large structures emerge by themselves
No central control: leaderless yet orderly
- Orderly enough to ensure stability, flexible enough to surprise and adjust to changes
Adaptive: interactions generate changes
- Behaviour of systems cannot be fully predicted – constantly creates novelty and adapt
Semi-coherence Strategy: Where do you want to go
[DICUUP]
Diverse: variety of moves; varying degree of scale and risk
Inefficient: multiple moves result in error and randomness; change to drive reinvention; optimised = fragile, therefore inefficiency is a good buffer
Continuous: rhythm over time; no big disjointed moves
Unpredictable: surprises; make moves & observe
Uncontrolled: trial and error with multiple moves at the business units at the same time
Proactive: anticipate and lead change
How to Get There: The Edge of Chaos [S-EDA]
Structure vs Chaos
Captures complicated, uncontrolled, unpredictable yet adaptive behaviour that occurs when there is some structure
Constant experimentation
- Structure: experimentation process is structured
- Chaos: in the randomness and presence of potential errors
Decentralisation
- Balance between centralised processes and decentralised decision-making
Agile absorption
- Structured absorption capabilities
- Fluid agility
How to Get There: The Edge of Time
Present, past and future
- Too much in the past: locked into dated models
- Too little in the past: fail to learn from experience
Use the past to understand the present (path dependency)
To make sense of the present (theory)
Move towards the future (options; scenario)
- Too much in the future: neglecting today
- Too little in the future: reacting to marketplace that other firms create
How to Get There: Time Pacing
Managing transitions and rhythms
Creating internal rhythm that drives momentum for change
Law of Competing on the Edge
Strategy [TORP]
- Advantage is temporary: changes are opportunities, not threats
- Strategy is diverse, emergent and complicated: strategic options
- Reinvention is the goal: new ways to create value
- Live in the present: maximising minimum structure
Organisation [SRT]
- Stretch out the past
- Reach into the future
- Time pace change
Leadership [GSR]
- Grow the strategy: revamp; set priorities, responsibilities and operating measures; dismantle “megastructures”
- Drive strategy of business: cannot be driven top-down
- Repatch businesses to markets; articulate the whole: realign with emerging opportunities, articulate and shape emergent strategy
Implications
Collaboration is key
Creativity and imagination: opportunities
Integrative thinking
Double loop learning
- “what would have to be true for the idea to be a good one?”
Strategic thinking and planning
- “what needs to be done?”
- Energises and aligns employees
