Platt Perspective on Business and Technology

Developing strategy from a solid foundation 14: thinking through and developing strategy from the fundamentals 3

Posted in macroeconomics, strategy and planning by Timothy Platt on September 7, 2015

This is my fourteenth 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 1-13.)

I began this series with a first step consideration of a key element that would go into developing more effective tools for conceiving and executing organizational strategy in general, with consideration of basic assumptions made (see Part 1.) Then after that, I systematically offered an extended historical narrative-formatted case study of strategy and executed policy in action, and over a lengthy, multi-generational span of time (see Parts 2-11.) I chose a government policy and practice example there, focusing on how the United States military has maintained its overall troop strength in its Army. And I then began explicitly citing and pursuing that case study discussion and analysis in Part 12 and Part 13 of this series, where I returned to consideration of a more general approach to strategy formulation, execution, outcomes review, and next-step refinement. I continue that here. And I begin that by repeating a fundamental question that my discussion of Parts 12 and 13 led me to, and that I offered towards the end of Part 13, in the context of discussing the limitations of more static strategy analysis tools such as the standard strengths, weaknesses, opportunities and threats (SWOT) analysis:

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

I would argue the case that way too often and way too thoroughly, a candid and considered answer to this question must be “yes.” (And see Parts 12 and 13 for my example based reasoning as to why, at least as this question would arise in the context of this series’ case study.)

If, as I argue, SWOT and similar analytical tools can only offer static snapshot in time perspectives on a strategic approach and its context, then this leaves us with the challenge of finding a more dynamic and change accommodating alternative to at least add to the tool set used.

Soon after posing my above repeated question in Part 13, I began addressing that challenge by posing a four point, temporally connected list of functions and actions that such a tool might be expected to include, at the very minimum, which I repeat 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.

And I followed that by stating that I had, up to there, “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 and planning break-down.” And I stated that I would continue the more general discussion offered there, up to the end of Part 13, by explicitly looking into this process cycle and its issues and implications.

I keep finding myself thinking back to my two case study-based strategic failure examples as briefly noted in Part 13, as I approach that next discussion goal here:

• The failure to accurately perceive or understand or plan in any significant way for the in-retrospect overt threat offered by the Japanese government and their military leading up to the Pearl Harbor attack of December 7, 1941, and
• The “history repeating itself” failures in perceiving or understanding the risk posed by al Qaeda leading up to their September 11, 2001 attacks.

If the strategic goals in place, and both short-term and long-term, were to safeguard the United States and US interests, and they were, then the failures to do so for both of those events began with that second numbered bullet point, above. And I begin addressing that by making note of Occam’s Razor and its more restrictive formulation: Occam’s Procrustean Bed: a presumption that not only is a simplest explanation most likely to be a correct explanation as Occam would suggest, but that no other possibilities besides a (usually initial) simplest explanation can ever even be considered.

When planners and strategists, and the policy makers they worked for, ignored the warnings of Billy Mitchell and others like him, leading up to Pearl Harbor and World War II, they were pursuing their simplest explanation with blinders to all other possibilities, and similar, more Procrustean approaches where pursued to the exclusion of all other possibilities leading up to 9/11 too. This meant:

• Unconsidered and ill-considered assumptions, and denial of even possible validity of any alternative evidence that might not support the “simplest” predictive models already in place,
• Unconsidered and ill-considered stakeholders and sources of evidence and of alternatives that in retrospect needed to be included (such as Billy Mitchell and his reported concerns),
• And a failure to think through the constraints as to what might be seen as both possible and even necessary on the part of all stakeholders involved (there, the Japanese government in 1941 and then al Qaeda in 2001 included. Stakeholders do not just consist of supporters and allies.)

And a failure to effectively achieve step 2 of the above four point process cycle, makes a failure in steps 3 and 4 inevitable.

And this brings me to today and to possible tomorrows and to the developing events that I have been writing about in my series: China and its Transition Imperatives (see Macroeconomics and Business and its Page 2 continuation, postings 154 and loosely following for its Parts 1-20 installments , plus its three supplemental postings.)

China currently faces grave structural financial challenges that as of this writing are becoming impossible to ignore. And as a part of its response to that, and to what its government sees as grave threat to its capacity to grow itself out of its overall economic challenges, China under Xi Jinping’s leadership, is in effect seeking to establish its own version of a Greater East Asia Co-Prosperity Sphere by claiming hegemony over essentially all of the South and East China Seas, and any unoccupied islands, reefs and atolls there within, plus their surrounding natural resources (see my above-cited China series for details.) Yes, I am explicitly drawing parallels between the China of today and Japan leading up to that December day in 1941.

What will China do next? I think it very unlikely that the Chinese government or the leadership of its military would actively seek out direct military conflict with the United States, but the level of brinksmanship displayed by elements of their military do raise concern that a line might accidently be crossed resulting in at least localized confrontation and military action. China does, I add, have a long history of militarily attacking its smaller immediate neighbors and of invading at least select areas of their sovereign territories (see for example my series: Vietnam, Đổi Mới and the Search for Business and Economic Strength and Global Relevance at United Nations Global Alliance for ICT and Development (UN-GAID), postings 34 and following for its Parts 1-10.)

Why do I raise this here as a possible extension forward in my case study for this series? Because any effective planning for dealing with China as it seeks to find its way out of its current predicaments, will require wider ranging and longer term thinking, and wider ranging evidence and data collecting, going into that policy development analysis, than was carried out in my two above-repeated historical events. And this will have to include input and insight that is wider reaching in scope and inclusiveness, and it will have to allow for planning that is more open and that is wider reaching too, than would fit into any simple snapshot in time SWOT or similar analyses.

I am going to conclude this series installment and this series as a whole there, only addressing one further area of detail to my admittedly very incomplete discussion of more dynamic strategy analysis as started here in this series.

I have glossed over the issues of goals in this discussion, and quite specifically in my four point process strategy tools outline as offered above. One obvious area of oversimplification there, can be found in how I state my third point of that list in terms of “short-timeframe” goals. I offer this as an alternative to snapshot in time approaches such as SWOT analyses, so why do I write there of “short” timeframes?

To jump to my conclusion there, short is relative. Think and plan in terms of the longest timeframes that can be brought into clear and at least relatively unambiguous focus where allowance for the possibility of disruptive change can reduce that to very short indeed. But let’s set aside that possibility for the moment and consider timeframe lengths when at least in principle, change is going to be more orderly and predictable.

• The longer the timeframe considered, the more uncertainly enters in as more opportunity for change arises
• And as the number of branching possible outcomes contingencies expands out – usually at least exponentially.

Think shorter and manageable, and think of timeframe lengths as being flexible in duration. And think and strategically plan in terms of continuing updates on the specific timelines and timeframes under consideration.

And turning back to consider input data and assumptions again, here in this context:

• The more widely you gather and consider the input that you feed into the strategy analysis and development tools that you use, the more rapidly the range of possible causal outcomes that you would have to consider, expands out too and the more varied and diverse they become – and if for no other reason, because you are considering more potentially variable factors.
• So once again, start with short-term timeframes and expand them out along most likely and then progressively less likely – but still realistically possible lines.
• And do so with an awareness of disruptive change, as it can collapse all planning that takes place up to its emergence, down to a new starting point that you would develop your next-step strategy and planning from.
• And think and plan and develop strategy in terms of a more complex understanding of what your goals are, with long-term overall goals but with short-term, intermediate and step-wise goals and sub-goals where they would make sense.
• It is important not to get lost in the details, but you have to think and plan with an awareness of them.
• And remember: unconsidered but significant details, however complicating, can become your crucial points of failure: your critical blind spots.
• I am not completely denying Occam’s Razor here by any means, but I am denying as foolish, its extremist over-interpretation as Occam’s Procrustean Bed. And I am arguing the case for considering the complexities so you can more fully and reliably arrive at a wider range of perhaps simpler possibilities to consider.
• And ultimately, a core goal for any strategic planning is that it allow those who follow it to become more proactive and prepared for what actually happens next, and not simply reactive – as the United States found itself as a country after the events of December 7, 1941 and September 11, 2001.

I am finishing this posting, and this series here, as noted above but I am certain to come back to the issues that I have begun addressing here, and certainly in further exploring more dynamic tools for assessing and developing strategy and strategic planning. 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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