“Strategic fallout points”; is a term used to explain how innovative forms of new strategic thinking starkly differ from the norms of academic strategic practice and design.

13 Oct

We all have “strategic fall out points”. Mainly, it is because of the nature of our strategic reality changing still even today, the way we have to do things keeps changing. You can’t really compete in the world if you don’t understand it, and how change changes things.

Consequently “Strategic fall out points” occur where we do things in an “unorthodox” or radically different manner from the set norm, as taught academically, to stay both efficient and effective.

Even academic and qualified people also, deviate from certain “set piece” applications and taught theory, and then they fall out on that point, with the strategic norm…that is.

Surely no one is still “brave” enough to say that “one size strategy fits all” anymore – when looking at strategy from a academic perspective, no one set perspective can set the tone for all the practice of strategy existing, for all types of business and projects today still, which can be used throughout all industries and across the globe. No, even strategy and how it’s done traditionally has changed, strategy today is now more concerned with people… than at any other time in our human history…

The evolution of strategy could paint this picture more clearly, with some history.

Strategy itself as a discipline is still very young; however it has evolved much since its inception into business. Up until the late 1940’s it was military principles still, then in the 1950’s General Electric Co. (GE) had begun to develop the concept of strategic business units (SBUs). The basic idea-now largely accepted as the normal and obvious way of going about doing things-was that strategy should be set within the context of individual businesses which had clearly defined products and markets.  And it has never seized to do so to this day.

Strategy and its usefulness have long since the sixties even continued evolving steadily too. When the strategic management buzz came about around the mid-1960’s, most, if not all corporates embraced it, it gave them a tool, a tangible means to devise and implement plans uniformly throughout the organization, also the ability to use systems, and create structure, with the main focus of building on their competitiveness.

The 60’s was truly a time for competing… 1957-1975 – saw the space race etc. to give only one example, competing was on everyone’s mind, it was seen to be very healthy, we did it in our private lives too, right from pre-school already, and just about everywhere.

Competing gave formation to the onset of dominance; dominance in turn opens the way for – “the law of competitive exclusion”.

This holds that;

  1. Where and if the environment stays the same, constant, one competitor will eventually drive the other extinct…
  2. So things have to remain more or less constant for any dominance to become prevalent, any amount of constant change, to the nature of competing – and so too strategy – or competitors, will change the factors that prevail, that will impact on the possibility of dominance – of one over the other.
  3.  the law of competitive exclusion holds that if certain set conditions favor one competitor above all others… he will start leading, then excel, and eventually to dominate – as long as the conditions remain in place.
  4. Dominate includes these principles; to dictate, to command, to have better leverage, to control, and determine, to set the trends and benchmarks, as well as price…

Let’s make the point now; after the sixties strategy really moved into management intelligence, and became significant to business practice, planning, marketing, management and style.

  1. It became a corporate and academic affair. Corporate strategy in the 1970’s became concerned with the likes of; size – bigger is better, faster and stronger. They concentrated on firm size, market penetration, market share, stock options, and lots of case study, best practice and business theory. It was generally believed that a large size, would render better diversification, and market dominance, through many sectors, this would reduce risk and diversified companies could be managed better as divisions rather than a single entity.
  2. In the 1980’s a number of management writers argued that the costs of seeing high growth potential often outweighed that extra profitability from pursuing just such strategies. In fact the whole concept of growth for the sake of growth was being questioned by late 80’s. The whole strategic planning process was being criticized for becoming more a political exercise based on compromise, and at the expense of people, rather than rational decision making and optimization of resources. Things were stable, predictable, and controllable; the world was a big place. The focus on objectives could be set and strategies developed to meet them in the knowledge that the overriding objective would not change. Such an approach, identifying a target and developing strategies to achieve it, it became known as Management by Objectives (MBO).
  3. During the mid-1980’s to early 1990’s alternative approaches to Porter’s structural design became apparent with the more intuitive approach from Ohmae’s – where East meets West; Ohmae has written a number of books, including “The Mind of the Strategist”, The End of the Nation State and The Border-less World. Then the military theories emerged too and filled the gap between these two extremes. Some saw the importance of strategic investments in firm specific aspects like; resources, marketing, strategy, and then especially intellectual property that was difficult for competitors to imitate. Henry Mintzberg’s came with a book “The Rise and Fall of Strategic Planning” in 1994. He argued that “The confusion of means and ends characterizes our age,” explaining it thus; the highways are likely to be gridlocked. When the highways are blocked managers are left to negotiate minor country roads to reach their objectives. And then comes the final confusion: the destination is likely to have changed during the journey. Equally, while MBO sought to narrow our objectives and ignore all these other forces, success were the main objective. Today’s measurements of success can include everything from environmental performance to meeting equal opportunities targets, to mitigating risk and waste successfully. Success has expanded beyond the bottom-line, ending the war between sales and marketing.
  4. 2000 onward saw the concept of seeking out and closing the gaps between the numbers game and the people’s aims, we started getting better at articulating what we mean by giving work and strategy meaning. Finding the ideal niche, the cash cows, the age of innovation and reason came about, where the innovative advantage emerged as being an important aspect and since then innovation, modernization; technology its use and application, information management, data storage and integration coupled to the advancement of systems design, as well as giving all workers’ rights globally, democracy started turning its wheels. Globally the sociological aspects have become focal and very prominent too maintain integral balance worldwide and in the corporate environment.

Now on the practical side

George Steiner’s work as a critic has tended toward exploring cultural and philosophical issues, by particularly dealing with its translation and the nature of language and literature. He attempted to make strategic planning much more practical by presenting it as a step-by-step manual.

Among other things, he organized the methodical structure of strategic planning in such a way that even line managers in a firm could participate in the process of strategy. Steiner argued that strategic planning should be “…inextricably interwoven into the entire fabric of management and not just something separate and distinct from the processes of management”

Things have changed much since then:

However, still No degree can prepare you totally today for what is happening in the real world today, either operationally, sociologically and all around you, as things are changing way to fast.

Further to this aspect, we are all slaves, bound to our own specific unique environment, habits, management style, trade, and even now industry specifics – (legislation, ISO (International Organization for Standardization) standards, and certain banned goods, practices and materials) play a huge role on how strategy can still play a part, as well as influence and guide human nature, and its attributes, it is a sociology that affects constant change…

Social change and reforms are not random, they take time, they run in tandem with our quality of life; influenced by levels of education, and socio-economic factors mostly.  Strategy is always trapped within this web; we cannot expect people to operate beyond their scope and area of influence…

Strategy for most has still not changed much. We all remember the step-by-step formulas of strategy, we all have been taught strategy as if set pieces – like a machine that has been carefully and elaborately planned to work in a very specific manner – like in a game of chess, that have set pieces – with specific functions – and moves, uses; in strategy we have them too; vision, mission, goal, structure, it all had meaning. However, to what extent still? Do you still practice strategy along this ridged set piece path every day, or has strategy evolved into a liquid system of following strategic principles for you?

Overcoming that first bit of inertia is the biggest challenge to bridging the mental gap.

So truly speaking; if you don’t have a system in place for getting things started and done, be it in private life or business you’re likely losing a lot of productive time to repetitiveness and inefficiency.

Strategy has a strange way of materializing only once the wheals start turning, only once we actively ACT – or start – then only do things “start” looking better.

Shaping the path

I think strategy for most of us have become a daily ritual of all the fore mentioned, but better described as a new set piece game of “shaping the path”, to get things started, the importance of “shaping the path” to an objective for the labor force is a strategic one too.

The clearer the path is the clearer the objectives become, the path creates focus, intent, purpose, it’s a process. Its aim is to get people and resources moving. This has become the forward thinking approach, a what’s next, and then, linked up with planning skills, and boosted by tactical insight required by strategic operators today, where in the field they seem to use more intuition to go over to action; observation, orientation, improvisation, adaptation, facilitation, decisions and then actions; like the mantra of the marines, it’s all about problem solving; diminishing risk, removing obstacles and diminishing waste, as well as negotiating with people, all at lightning speed. This is the path…

For, strategy in its application and focus has become much more tactical, situational, intuitive and social, then short and medium ranged. Than the taught medium and long term planning of the past.

Its main emphasis is on better situational awareness 

Solving problems now, is also mitigating future ones, and removing on negotiating obstacles falls in that principle too. This all requires as a new mindset; being plugged into situational awareness that stretches from the here-and-now to well into the future, has become a required skill.

Situational strategic awareness is often studied from the context of leadership; and its roles and functions, involving time-critical tactical applications, however, it needs to be extended to medium and long rage aspects too, not just by means of systems, and processes standardization and design. Situational awareness should target every aspect that has a bearing and influence on operational success, short, medium and long term, so that we may develop the capabilities now, to survive certain future trends emanating now already. For example, in the study of social and political studies, their focus is long term, and so too their influence is short and medium as well as long term. Situational strategic awareness is therefore found to be a critical component of social interaction in governing business units strategically..

This then becomes the strategic fall out, the point where everything we know and understand about strategic planning, designing and implementing strategy gets washed, as it should look, feel, taste, smell, it is all gone, as it gets reshaped by a new cultural and political will, a reality that falls just outside the realm of a decade old strategic doctrine, of sterile academic strategic practice and perspectives that still exist, we need to be able to connect the two extremes of business practice with social aspects seamlessly for strategy to remain key and center to business theory. We can’t have the I say you do approach, this gets peoples backs up, it needs to become a politically correct and very social affair rather.

Strategic designing; planning and management are just no longer exclusive, an out-of-the-way sterile process that happens on the top floor with the CEO anymore. No, it’s all-inclusive, everyone wants in, our current situation demands it, we all need to have a say…

strategy making has become a constant process, a minute-by-minute act, interwoven throughout the entire organization today, with all the variables of the environment and everyone in it, at that point and time, impacting on the total direction and all directives, it takes both a social and managerial mindset combined to manage skill, resources, and planning, and some good situational awareness to still balance an organization in all its facets with a strategy today. The aspect is referred to as having a global comprehension

Global Comprehension

A “Global Comprehension” is what is required before we can have strategy, well everyone with the ability to read, write and speak, has a comprehension, of himself and his environment. So everyone is a strategist in his own right. However, to have insight of what will inform and speak to the success of a task requires “Global Comprehension”.

Global comprehension means understanding the general meaning of what you are listening to or reading.

It can be compared to selective comprehension, which means understanding specific information in the text or verbal, in context to the information given, then creating a detailed comprehension of it for oneself, a understanding, which means understanding everything there is to know, and being able to extrapolate the relevance of the facts and assumptions from it.

Global comprehension includes; selective and detailed comprehensions- having parallels with the ability of knowing fact from fiction, true from false, feasible from unrealistic at a glance.

For strategy performed in this mode of comprehension only functions within – set and certain parameters; all the other business aspects are sacrificed or minimized, so that this process of acting on one’s intuition can become streamlined and fast pace.

Only when strategist understands that there exist a huge difference between strategic planning and strategic thinking, and that it is no longer corporate specific, but general or generic strategy too, as it exists today in operations, then they will tell you that the strategic landscape has changed much; to also include more assimilation, learning, and absorbing from the collective to build a street smart strategic perspective with global comprehension.

Once comprehension is good situational awareness grows. The problem with this aspect is its very hard to find people with good to great global comprehension. For it is only built up with reading skills, people who can’t read well can’t understand complex issues, can extrapolate information, find meaning well, and consequently can distinguish between fact and fiction, good and bad, very well…

Then we also have technology

Most of it is pretty useless, no matter how classy and smart it is designed, if you can’t read well, and then follows the aspect of global comprehension too as described. Systems do not think for us, as much as they are smarter and faster today, and contrary to popular belief, it is still the “operator” that needs to interoperate the information, and when and what that information should be used for, for if used for more than the facilitation of human thinking, then it tends to become the only premise of all understanding of the problem, the formula for the problem statement, then it can even prevent strategic thinking too follow.

Statistical data has lost a lot of its usefulness; we rely more on the collective today, and their instincts, to get business information fast; too and from management, strategic and otherwise.

Project styled work packages should flow. People like having their work in small doses, with a start and finish. They also become strategically relevant by capturing what the manager and team learns from all their sources.

They pick up on queues, by drawing from his or her personal experiences, ability, resources and their experiences of others throughout the organization, if it works for them it will work for me.

Strategic thinking, in contrast, is about this type and level of synthesis into the main stream of strategy.  It involves much more of the human aspects like intuition and creativity, opposed to set pieces thinking.

The outcome of strategic process is an integrated perspective of the enterprise as a resource itself, having resource within a resource is the thinking, the thinking machine, rather than the top down planning of old, which had a not-too-precisely voiced vision of direction…

This then is still “strategy” performed never the less – but at a “minimalistic level”, on a cleared path, its more “streamlined and an operationally geared and ready strategy”, (and no its not tactics) where we truly keep things very simple, lean, it cannot in most instances becomes a grand strategy, or even a strategic template to carry over, to get used by others, or even be taught and re-applied elsewhere.

All strategies that operate under such severe constraints and conditions have one thing in common, be they big or small, they all have some; set and certain parameters – informing the strategic intent for example; It answered to the law of dominance – “of competitive exclusion”; where if the environment stays the same, one competitor will drive the other extinct…so only if you can change the parameters will the situation change, and hopefully in your favor…

Set Strategic Parameters –are for instance dictated by;

  • Industry specifics – The type of “industry” we find ourselves in for instance – will set the parameters for us more specifically, local governments for instance; are mostly regulated by strict set laws, bylaws, bureaucracy and political oversight too, dictating the political will. Thus rendering certain business aspects and concepts of strategy void, I.E; like best practices; so hiring BEE candidates over best qualified candidates for the job opening will be a best practice here, sourcing quality materials from overseas manufacturers is out, everything must be local. Policy redefines strategic concepts and theory, resource acquisition and use.  Set parameters also determine the limitations of operation – in this case local governments are run politically specific…with further implications.
  • Political ideologies – I.E, with various committees with their “sacred cows” – where you will find that people are afraid or unwilling to criticize or question them, their purpose and insight – still it will define the scope of operation. You will have NO – authority, within authority…in other words, one committee will only be allowed to approve the purchase of a car, the next will approve the specks, the next the financing and so it goes on and on for example…until someone gets the car that was never meant for him…top heavy structures emerge, that breed unforeseen consequences like;
    • Budgets and spending – gets stuck in finance, tender and procurement committees.
    • Political oversight committees sidetrack projects, or stall them…
    • Project leaders – have very little capacity and or capability, they just steer…as outside committees make the decisions – if you are lucky, or just leave it standing over.
    • Privatization of service suppliers causes inflated value, delayed turnaround times and elevated increases in cost on all projects – that’s if they deliver.
    • Quality control becomes subservient to job creation, community pressure, political interference as one example of focus alignment,
    • Efficient and effective – is over-written by (politically informed decision making) – side tracking policy and procedures.
    • Cultural diversity – really thickens the plot, if the culture is not of one philosophy; way of life, religion, attitude and thinking, there will be no set parameters – then normally they will have to be established from scratch. When people are not like minded on all things strategic and relevant it creates skewed outputs. It brings about inconsistency, friction, disparity in all manner and application of strategy, also touching strategic thinking and strategic management styles. With a mix-up of traditions, language, rituals, superstition and even customary beliefs, it will surely all impact on the style and activities of management and their own production, and directives, its inputs and outputs, making it very unique and dynamic in nature. You cannot apply one standard here, as it won’t fit; it needs to be individual standards in each and every case.
    • Capacity and capability – does not refer to ability and qualifications for occupying a management position for instance, with a senior title – here it has a different interpretation, it does not imply competence in line with any such positions requirements in the public sector for instance. Here different criteria get used to promote and appoint senior people. It is always directly linked to the interest of political correctness, we will set all business concepts aside in the interest of political agendas –  “progress”.

Then we have Strategic Certain Parameters, things that still hold their implicit value and serve the same purpose they are for instance;

  • Location – we can be certain that location will directly affect our strategy and so to our business, its design, inputs and outputs, and resources available. As well as cost etc…
  • Time – timing becomes a certain factor, imperative in any scheme of a strategic nature; managers must establish certain parameters for beginning and ending certain tasks and conducting the assessment process, so as to know how well they had performed to expectation…all good and well on paper as well as in theory, now we have torrential rains, industrial strikes, stay ways, and extended absenteeism – how to balance time?
  • Risk – is a constant, there is always the aspect of risk, how we mitigate and calculate it accurately will set the parameters within which we operate, loosely, or tightly – with a certain amount of certainty.
  • Objective – lastly, but not least, you can be very certain that when setting the objectives of the business, the plans, or the strategy, which every way you want to string it, it all speaks to and informs a reality that has to be certain to materialize. Otherwise the scheme is for naught. This requires global comprehension – otherwise it will be uncertain, and people will not give it much effort.

Final notes; “Strategic fallout points” is a way of describing an alternative strategic reality that really exists, especially when only managing strategic principles without following the set piece approach…

We all suffer strategic fallout points in our day, in our planning, and managing where strategy fly’s out the window.

Prevention is better than cure, so too is some planning better than finding and establishing a good medium, between speed, efficiency and effectiveness; strategic principles should always form a good fulcrum point. We need both balance and brilliance… strategy today needs to make allowances for deviation from the norm…

There is no separating of our strategic thinking from any prevailing ideology; strategy cannot fall out on these points. We cannot say that strategy cannot become political, or be politically steered. If that is the case then strategy is not flexible enough to still add value.

Management today is doing the impossible, this may be one of the single most relevant clues as to the significance of all social forces acting in on rational behavior, as well as aged old business philosophy, so too our strategic common sense, thus opening up a new world with the need for critical and design thinking today, it is becoming more and more apparent that people want strategic projects over pure strategies. Strategic projects combine two fields, to form one identity; at strategic level, this requires high level planning, stakeholder management and co-ordination, with clear goal definition – managed along project lines, and path creation for resources to achieve the desired outputs

This aspect is especially visible in our public organizations, where the pros say they are requiring much more planning and strategy, as it is lacking, seemingly on the surface this is the case, and in forensic reports too, specifically on the lack of service delivery this is sighted as the number one aspect for a turn around.

However, clearly it’s not the lack of strategy, or planning, it’s the environment itself that does not allow for strategy to function, then strategy serves no real value, only as a means to funnel political debates. What we need more of is political will…in the right direction.

So, clearly Business school strategic models do not always fit the reality as it exist, nor understand the dynamics of the under currents and tones within politics, and its influence on the strategic environment, as in this example, sighting the public sector in general for instance.

I would argue that privatization is never the answer to get efficiency back; it creates more problems that what it solves.

However, state run departments and services exist only today still, because they turn a good profit, and can bury their mistakes in those profits, but for how long? Many senior officials are also owners of these private companies they utilize directly in their tenders, some shareholders, and their family and friends staff members, and as such they can continue to exist because of a political ideology being promoted, like BEE. To hide the skeletons behind…, as BEE is not inherently bad, it’s the will and the people that drive it…that exploit it to only their own betterment.

How can strategy turn human nature around, the quest for dominance, fueled by political aspirations and control, and otherwise, breeds greed, anything to powerful, loses its conscience, at that point “the law of competitive exclusion” will play its tricks, for it will lose its grip on the situational, for the current reality will change, and soon, governments the world over are buying votes, subsidizing ill-conceived strategy, and then the dominant will fall…and hopefully become extinct. For they lack the insight of global comprehension…

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