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What matters more to business – speed of change, commoditisation, focusing on user needs, innovation, dealing with inertia or building an ecosystem? The answer to that question is far from simple. To unpack this, we need to start by introducing a simple device known as the strategy cycle.
The strategy cycle combines OODA (observe, orient, decide and act), the decision process devised by military strategist John Boyd with Art of War author Sun Tzu in an easy-to-understand form that masks a world of complexity. On the surface, the strategy cycle is all about the “game” and then:
- Observing the environment – that is, the landscape and climatic patterns that impact it.
- Orientating around the environment – the doctrine or principles we might use to organise ourselves.
- Deciding where to attack including the sorts of gameplay that can be deployed and our capabilities.
- Acting – getting stuff done; the execution part.
Figure 1 – The strategy cycle
Observing the environment
However, dig beneath the surface and you start to discover layers of complexity. To understand the landscape, you need to map it and there are as many maps as there are industrial landscapes.
The map of the self-driving car industry is not the same as the map of the retail industry any more than a map of France is the same as a map of England.
However, maps of a competitive landscape are not static, but dynamic. There are many climatic patterns that alter the maps. For example, supply and demand competition drives the evolution of the once innovative to more of a commodity.
At the same time, another pattern known as componentisation describes how we can rapidly develop innovative systems based on commodity components. Getting to grips with the various patterns – of which there are at least 27 – is useful for anticipation.
Orientating around the environment
However, beyond observing the landscape and how it might change, you quickly encounter more complexity when considering how to orientate your company around a landscape. There is not just one principle (or doctrine) for any organisation to follow, but at least 40 universally useful patterns, ranging from focusing on user needs to a bias towards data.
Once you get beyond understanding the landscape and orientating around this, you will start to discover there are ways in which you can change the game. In fact, there are more than 70 different forms of context-specific gameplay, from open source plays to centres of gravity to specific ecosystem models.
This multitude of gameplays, combined with an understanding of landscape and anticipation of change, is extremely useful in scenario planning and deciding where you need to attack. Alas, the cycle does not stop because it is a cycle. Not only do your actions change the game for yourself and your competitors, but you have the speed at which you loop around the cycle.
If we take our original list – speed of change, commoditisation, focusing on user needs, innovation, dealing with inertia or building an ecosystem – then we have a cauldron of climatic patterns, doctrine and context-specific gameplay.
There is no simple list saying “this is more important than that” because they are different things. It’s like saying which is more important, a car or an orange? It depends upon whether you are trying to get from A to B or avoid scurvy.
Deciding where to attack
Most of the strategy cycle is context-specific – that is, the maps, the gameplay and where you might attack. But there is one small area of the cycle that is more universal and it is here we can make a comparative list. This area is known as doctrine.
There are least 40 different forms of universally useful doctrine, from focusing on user needs to a bias towards action, to removing duplication, to using appropriate methodology, to managing inertia. Each of these, in turn, expands.
For example, when it comes to managing inertia, there are at least 16 different forms of inertia, from previous investment to governance to financial markets. And there exist different tactical plays for each of these.
While doctrine is universal, the way you implement doctrine is context-specific. Let’s take the principle of “thinking small” as applied to team structure – for example, Amazon’s two-pizza or Haier’s cell-based teams. The principle might be universally useful, but the actual teams within Amazon will be different from the teams in Haier, whether in size, composition or number.
Read more about mapping
- Making sense of executive strategy: In this first excerpt from his book, Simon Wardley explains why business leaders need to understand the importance of maps for corporate strategy.
- Finding a path: In the second extract, Wardley explains how to draw a map to describe the changing nature of your business.
- Exploring the map: In the third and final excerpt, Wardley explains how maps can determine future business strategy.
However, we can use doctrine as a broad-brush stroke to compare ourselves and competitors. There are some web giants that are strong at all the forms of doctrine, and hence tend to be a tougher competitor to deal with. There are banks that are vastly weaker across all the forms of doctrine and would be easier targets if they weren’t hidden behind layers of protective regulation. Knowing yourself and your likely competitors can often help to determine where to attack a market.
But there is a problem. The list of doctrines has been developed through mapping many industries and discovering patterns that appear to be universally useful. However, although I can list doctrines, I cannot say which matters more on the list. Is transparency more important than a bias to action? Is using appropriate methods more important than a focus on user needs? Sorting this out will take decades of data collection.
To compound this, one of the climatic patterns – known as co-evolution – means that as technology evolves, practices and hence organisations tend to co-evolve. New forms of universally useful doctrine appear. It never ends.
Getting stuff done
Of course, without the priority order, it becomes difficult to say which you should adopt first. Using experience and inductive reasoning, I can make an educated guess about which should be implemented in what order, but it is only a guess. For example, when it comes to creating an organisation that can cope with constant change – that is, which shows what ecologist CS Holling would describe as engineering and ecological resilience – then the discrete steps needed include:
- Start by understanding your user needs.
- Improve your understanding of the detail by describing the value chain needed to support your user needs.
- Increase your situational awareness by creating a map of the environment. This is achieved by taking your value chain (step 2) and adding in evolution (how things change).
- Use your map to apply appropriate methods, to constrain the system into small contracts and to remove bias and duplication.
- Convert the small contracts into a cell-based structure with autonomous teams.
- Apply appropriate attitudes to the teams, such as pioneer, settler and town planner, and introduce a system of theft to enable a system that copes with constant change.
Depending on how far you are down this journey will determine how many of the above steps make sense to you. There is an order to these things and a journey of learning.
Doctrine is, of course, just one small aspect in the strategy cycle. Mastering the field is a daunting task and not one I expect to achieve in my lifetime. However, the good news is that you can learn in small steps.
Just the ability to map an environment will get you to challenge assumptions (a form of doctrine); focus on user needs (doctrine); provide a systematic mechanism of learning (the map); and help you appreciate that everything evolves (a climatic pattern). Loop around the cycle one more time and, with two maps, you’ll start learning how to remove bias and duplication (another form of doctrine) by comparing the maps.
Every action you take, every loop around the cycle, will drive you deeper into the subject and you will get faster in return. The speed at which I can map an industry and decide on action today outstrips my early attempts to map a single line of business in 2005. But once you start down this path, be warned – it’s hard to go back. What is seen cannot be unseen.
So, I give you the choice. The blue pill means you go no further, you wake up in your land of SWOT diagrams, stories, gut feel and magic secrets of success learned from the great and the good. The red pill is one where we embrace the complexity of strategy and you start your own journey of learning.
To help you along the way, Simon Wardley has provided a creative commons book that teaches the basics of mapping and the strategy cycle.
A community-run Map Camp event will take place in London on 5 October 2017, where a wealth of mapping knowledge is meeting up to discuss the field. Tickets are free, but numbers are limited.
Leading Edge Forum offers an online course – How to stop self-harm and get fit – designed to teach the basics of mapping and understanding value chains.