Platt Perspective on Business and Technology

Developing strategy from a solid foundation 13: thinking through and developing strategy from the fundamentals 2

Posted in macroeconomics, strategy and planning by Timothy Platt on August 12, 2015

This is my thirteenth installment to a series on strategy as it is developed in practice, and on where it is developed from (see Business Strategy and Operations – 3, postings 490 and loosely following for Parts 1-12.)

I began discussing a more general approach to long-term strategy in Part 1 of this series, and then switched directions on the basis of that start to offer a long term, historical narrative-organized case study of how strategy develops and evolves, turning to the public sector as a source for that. And my specific area of discussion and analysis there was on how United States policy and practice have been formed and how they have evolved and changed in maintaining troop levels in their national military defense force.

I then turned back to consider general principles again, citing this case study as a source of working examples for illustrating more general points made (see Part 11 and Part 12.) And I focused in large part in Part 12 on the more traditionally used strengths, weaknesses, opportunities and threats (SWOT) analysis approach to strategic planning, and on its limitations as an essentially static snapshot-in-time tool. I have been arguing a case for developing and using more dynamic tools for developing and maintaining overall strategy along with tools such as SWOT analysis, since the start of this series, and I discussed that specific tool in Part 12 in order to put more dynamic alternatives to it into context.

I have stated that one of my goals in this series is to at least offer a start to the process of developing such dynamic tools and my goal for this posting it to take at least a first step in that direction. But before doing so I want to build a foundation for that, by discussing by way of my case study example, how only recurringly using static tools such as SWOT analysis can in and of itself create problems. And then I want to more clearly articulate what “dynamic” functionally means in this context.

• One of the case study-based points that I made in Part 12 was that the circumstances that strategy and policy and their implementation seek to address, can and sometimes do change quite literally in a matter of hours or even minutes, and dramatically so.
• Slow, predictable, essentially linear change happens. But with time it becomes essentially inevitable that at least one dramatically disruptive, unpredicted change will arise too, that challenges basic operational and strategic assumptions and presumptions that were put in place during more predictable periods.

To repeat two points of example of this more nonlinear, immediately demanding change from my case study (that I noted in Part 12), the United States government and its military faced dramatic change in both what was needed as far as military personnel levels and what had to done to achieve that personnel support on December 7, 1941 when the Japanese attacked the United States naval base at Pearl Harbor. And an equally profound change faced their later generation successors in office and in responsibility held, on September 11, 2001 when operatives of al Qaeda attacked the World Trade Center in New York City and the Pentagon in Washington as well as attempting to attack a third high profile target with a hijacked plane crashing in rural Pennsylvania.

• In both cases it was immediately known that outside, unpredicted events had brought the United States into compellingly dire crisis.
• But all of the evidence that I have seen would suggest that strategy and planning exercises that were carried out up to then and leading up to both of these attacks,
• And both for national defense planning and for planning on how to meet defense force needs were essentially all static in nature, even if recurringly applied
• And with multiple fundamental assumptions never questioned or even examined, restricting all analysis and planning that could be carried out to consideration of predictively linear change.

National defense threat assessments have been conducted under one name or other for quite a while now in the United States and I add in many other countries as well. But simply offering three case study analyses at a time, to cite a commonly employed approach: a negative “worst” case assessment, a positive “best” case assessment and a normative “more predictably likely” one, cannot in and of itself change static analyses into more dynamic ones. This only increases the number of static analyses offered. And while that can allow for more nuanced overall reviews and analyses with more voices and opinions listened to and considered, history has shown that this can also give the ideologically driven more of an opportunity to cherry pick between the scenario alternatives offered, to find the predictive analyses that best match their own preconceived preferences and understandings too.

But let’s turn back to those two dates and to the events that transpired on them, precipitating their respective crises. And let’s at least selectively consider some of the strategy shaping outcomes of those events, or at least some of the early-arising ones as they were framed and executed upon and on what in retrospect would appear a more of an ad hoc and ideologically driven basis.

I have reservations about the expression “fog of war,” and especially given how this phrase can be and often is invoked as an excuse for the consequences of what in retrospect turn out to have been readily avoidable faulty decisions made and flawed actions taken as a result. But those reservations aside, every disruptive nonlinear change in organizational context and in the challenges and opportunities now available to it, begins with a cloud of uncertainty.

For Pearl Harbor and December 7, 1941 this uncertainty crucially included immediate concern that Japanese forces might already be on their way to further attack other United States interests, possibly even including West Coast continental United States ports or even United States cities with their unprotected high density civilian populations. And the September 11 al Qaeda attacks triggered analogous concerns that the United States and its cities and its government centers might be facing immediate continued attack too.

• Overall US government response in both strategic decisions made and actions taken and long-term, were born in the early uncertain hours in the immediate aftermath of these attacks as their impact was first felt by government leadership, and I add by members of the general public as well. Early and even initial, “fog of war” assumptions made, became as if engraved in stone.
• Both of these attacks and the threats that were seen as having been possible as follow-up to them, led to their perpetrators being deemed existential threats to the United States as a whole and to its overall interests. And this and immediate early assumptions as to the nature of those perpetrators shaped overall responses to them and on all levels, long-term too.

I began this series in its Part 1 looking at underlying assumptions. The bedrock assumptions that led the United States into World War II, that influenced and even significantly shaped all that followed were built on the foundation of that one day as news of this event and of parallel attacks elsewhere in the Pacific by Japanese forces reached Washington. And similarly, the entire War on Terror, as initiated in the presidential administration of George W Bush, and as continued under the Barack Obama presidency was shaped by the events of its one first day in September too.

But let’s step back for the moment from these watershed events, in and of themselves, and consider the larger historic pictures that they fit into.

• Both were surprise attacks. Neither was in any way predicted ….
• But both had precedents in actions that had been visibly, openly taken by the attackers who perpetrated them, and both were in fact warned of as possibilities on American soil.
• al Qaeda had already very publically avowed that it and its leadership saw the United States as their primary enemy, globally. And this organization had already launched suicide bombings on American embassies and on an American naval vessel, the USS Cole, among other targets attacked – and with significant loss of lives. They had made a wide range of such attacks and both directly against Americans and overseas American interests and against American allies.
• And Japan in the late 1930’s and the first years of the 1940’s had actively proclaimed hegemony over large areas of Asia, claiming this as its Greater East Asia Co-Prosperity Sphere. And it had both aggressively moved on its Asian neighbors militarily in support of its ownership claims, and it had proclaimed that it was being economically threatened and even economically attacked by actions taken against it in response to those actions.
• As particular American-led points of concern for the Japanese government there, consider the rubber and oil embargos placed on Japan that virtually entirely blocked access to these key resources as essential industrial raw materials imports. And consider the United States government decision of July 26, 1941 to freeze all Japanese owned financial assets held in the United States, after Japan sent troops into southern Indochina.
General William “Billy” Mitchell both predicted that the United States would find itself in a war with Japan as a consequence of that country’s belligerence and US responses to it, and he specifically predicted that Japanese forces would militarily attack Pearl Harbor.
• I began this set of bullet points by stating that “both were surprise attacks. Neither was in any way predicted ….” But both were in fact predictable and in both cases direct attacks were at the very least predicted as being very likely – even if the precise how and where and when of these likely attacks were uncertain. They were completely unexpected and unpredicted by the people who were responsible for setting and enforcing strategy and policy.

And this leads me to a crucial question, that I raise here because the empirical evidence of strategy and policy disconnects of these two historical examples are not unique exceptions, and certainly categorically, and either for governments or for businesses:

• Do static strategic assessments and reviews lead to avoidably static response systems that cannot effectively entertain conflicting though potentially significant evidence?

And this brings me to at least the start to a discussion of what “dynamic” means in this context, and of what specifically enters into strategic analytical tools that would bring them to being dynamic.

Dynamic strategic analytical planning tools do not in some special way predict the disruptively unexpected. They do not predict the novel and emergent and either for challenges or opportunities that arise. They do offer approaches for more rapidly assessing changing circumstances, facilitating more rapid, effective, agile responses. And they offer routes out of simply following initial, “fog of war” stage assumptions, making it easier to see them for what they are and are not, so they can be moved beyond when needed.

And this brings me back to the checklist of details that would go into an explicitly dynamic strategic analytical tool, as listed at the end of Part 12 for this series installment. These tools consist of series of cyclically repeated process-defined steps, which I somewhat expand out for their details here:

1. Identifying and prioritizing current and rapidly approaching short-timeframe goals,
2. Identifying the underlying assumptions, the stakeholders and the constraints that have to be taken into account in meeting those goals,
3. Identifying what operationally constitutes successfully achieving those goals and what consequences that entails, as well as likely consequences of not successfully reaching them,
4. And with that, you cycle back to perform a next iteration consideration of goals again and so on.

I have, up to here, primarily focused on assumptions made, as a failure to perceive and understand the full range of underlying assumptions constitutes what is probably the commonest point of failure that leads to strategy planning break-down. I will continue this discussion in a next series installment where I will explicitly look into this cycle and its issues and implications. Meanwhile, you can find this and related postings at Business Strategy and Operations – 3 and also at Page 1 and Page 2 of that directory. Also see Macroeconomics and Business and its Page 2 continuation.

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