Strategy Paradox Meetup

I met Michael Raynor at a book launching event that was notable for two reasons — first, the thesis of his book and second, the nature of the event.

THE THESIS

The Strategy Paradox arose from Raynor’s observation that companies that dramatically succeed or fail have much more in common than mediocre companies that just get by. Spectacular success requires taking large risks and committing to your path. Unfortunately, if you commit to the wrong path you crash. The paradox is how can you ask people to commit and manage uncertainty at the same time? His solution is that you don’t. You separate these functions within the organization. The very top management should focus on managing uncertainty at the strategic level, leaving division heads to totally commit to their mission without fear of reprisal if they’ve been given a losing horse to ride. I’m probably not doing justice but to say more will spill out of the nutshell.

It was interesting to see the “revelation” of managing uncertainty to the executive business world when risk management has been a science in systems engineering since before I was born. Coming from a background in systems engineering I thought this was a place where some cross-fertilization would have been helpful to him. No matter, I agree with him that executives at the top should have more understanding of it and should take strategic responsibility. If his book helps that to happen it’s a contribution. I also think his observation about the tradeoff between the commitment to blast through barriers and the flexibility needed to lower risk is a keen insight.

Working for Deloitte, his experience has been with large enterprises and his book is directed at the leadership of the same. That’s great when you are large enough to have division heads below the corporate headquarters. His observation certainly applies no matter the size of the company. But, …how well does his solution translate to small companies? I asked him how small a company could be and still benefit from his prescription. He agreed that at some point you can’t separate those functions but didn’t know how far down you could go.

His take on startups was that they commit to their one big idea and then make it or crash, c’est la vie. Amusing but clearly a view from the enterprise world. We help startups dramatically improve their odds, most importantly by making sure they understand their customer and the problem they are solving before solving it, but also via standard risk management practices. Just because you are a startup doesn’t mean you can’t place more than one bet. Even with one big idea, you can have a “portfolio” of paths to do it, a “porfolio” of markets to try it on, etc. So though his prescription may only be suitable for large companies, his concept may very well translate into other presecriptions for startups. In fact, if someone were to study startups successes and failures they might see uncertainty management a vital part of the story already.

When I finish the book I’ll review it in more detail and there’s a good chance I’ll like it well enough to include on the resources page in our knowledge center. Knowledge Centerl

THE EVENT

The event itself was even more unusual than the book. It was best summarized by two words, “new media.” For example, it’s the first time I’ve ever signed myself up via a wiki. Strategy Paradox wiki It was a new twist for me but an interesting one. It let’s you get familiar with many of the strangers you’ll meet before you even get there. (Though some don’t show.)

Most surprising was that three quarters of the people there were not close to the target audience of Fortune 1000 executives or even business people that I expected. In fact, most of us present from the business side run or work in businesses too small to employ his suggestions. The Deloitte employee that organized this innovative event is deep in the “new media” community so most of the attendees were creatures of the blogosphere. That is, his e-friends and their network, or in other words, people whose lives revolve around digital communication about digital communication. So most of the people there were more excited about the new media way the book was being promoted than the book itself.

At Breakthrough NPD we are trying to come to grips with Web2.0 and you can see on the wiki sign up one attendee is already tired of Web2.0 and ready to move on to the next thing. One man I met publishes 4 blogs and 2 podcasts a week on his multiple websites. For these folks it was much more about the buzz, and creating buzz, in this case buzz about the book, than actually reading or using it. The book and event is something they can blog about (as I too am doing) and link up their posts to each other to drive more traffic, get a higher Technoratti rating, and so on. It seemed like it’s about handling more buzz than what one is actually buzzing about. As an outsider to this new media world I’m sure I’m painting with a little too much black and white. The people I met were quite nice and very entertaining. Without a doubt I got a taste of the future.

Other blog posts on this event.

Posts about it beforehand
(Notice these talk more about the book.)

Marksguide
Leadership Now

Posts afterward.
(If you look at any of these notice how much talk is about the event rather than the book or its concepts.)

Paul Gillin
Pardon the Disruption
Bryper

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