Monday, August 15, 2016

Towards A 'Natural' Strategy

Martin Reeves' TED talk, below, makes an important point: That there are other ways of thinking about strategy, business strategy, than the usual, mechanical, pursuit of efficiency. Whether or not you agree with Mr Reeves' point about building a business around the principles of the human immune system, you would perhaps agree that there is not much point in a strategy that crash and burn all too quickly.



As for me, I would want to see this conversation, though this is NOT the point of the talk, as a part of a broader conversation about making businesses 'More Human', the title of a book by Steve Hilton (his arguments summarised in the video below). This is not what Martin Reeves is talking about - he is indeed arguing about a cleverer way of making strategy and rightly pointing out that the current methods of optimising is getting us nowhere - but one should remember that Corporate Strategy is built and executed within an environment of ideas, which is mechanical and bureaucratic.



Unfortunately, 'Sustainability' has become a feel-good word, defined by bureaucratic government policies (which aims to define what is and isn't sustainable, while operating within their own pressure-group defined, often populist, parameters) and something that companies treat as 'antithetical' to 'shareholder value'. The point is, of course, the companies perhaps focus too much on those funds and traders who are looking to make money out of market movements, rather than those patient ones focused on dividends and real business performance. CEOs, with their two year lifespans, also couldn't care less whether the company lives or dies. This is why we should perhaps focus on the environment of ideas, rather than finding a smarter way of strategy-making.

One final comment about start-ups and strategy: Mr Reeves makes the point that they are perhaps most biologically oriented, making life not by seeking efficiency, but through adaptation and diversity. However, here too, the question of environment of ideas come up. Many start-up founders, carrying the legacy of their big company life, set up on a quest of efficiency from the word go. The current stereotyping that goes on in the investor circle, some funds would only invest in twenty- something founders, may have some justification: The college grads are far more used to the primal life of start-ups than those used to rules, systems and efficiencies. And, that, premature quest of efficiency, towards goals set up by a fantastical business plan, leads more start-ups astray than one would care to talk about. The 'Lean' start-up conversation, among others, seek to focus minds on this mistake - that start-ups are not small versions of big companies and rather, emergent organisms needing to explore and adapt - and yet, this advice, despite the hype, remains unheeded.




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