The Wisdom of Strategy

In his Wisdom Manifesto, Umair Haque shreds the idea that strategy development is anything other than a wallet grabbing scam for consultants. I'm trying not to be hurt by this sentiment, but it's hard. The author suggests that strategy be replaced by organizational "wisdom" and goes on to offer some rather pithy contrasts between the two concepts. My question is: why is it either/or? Why can't strategy design and wisdom co-exist? I don't believe they have to be mutually exclusive. In fact, where would strategy be without wisdom and vice versa?



Let's start with some definitions to establish whether strategy and wisdom are exclusive. Wisdom is the ability to discern or judge what is true, right or lasting; insight. Strategy is a plan of action designed to achieve a particular goal. Logic dictates that applying wisdom to a business opportunity is absolutely correct. An example of strategy without wisdom is the Dot Com bubble, when a sock puppet could appear on television to persuade you that buying pet food over the Internet instead of the grocery store was an idea whose time had come (RIP, Sock Puppet).



Umair Haque suggests that wisdom ignites, energizes and channels. Maybe, but to what end? As Walter Kiechel, author of The Lords of Strategy suggested recently in a Harvard Business Review interview, "If you don't think strategy is important, look at what happened to GM and Chrysler when they forgot about their customers and how to meet their needs." And then there's Toyota, who seemingly abandoned a 60-year strategy that frankly had been working well, and pursued a growth-at-all-costs strategy (and what a cost) without bringing its considerable wisdom to the opportunity. Strategy without wisdom is not confined to the auto industry, sadly.



Strategy allows businesses to think about their people, operations, customers and opportunities in an integrated way. It doesn't have to be painful or drawn out or rely totally on numbers. As Walter Kiechel suggested, a new way of thinking about strategy design today is bringing together people and analytics in a systematic way to be more granular and to become adaptive.



A process I've used for twenty years, adapted over time because of shifts like globalization and prcess engineering and the like, strongly relies on organizational wisdom.

• Values: know your Purpose and what you are about. In a crunch, do you stand by your Values or jettison them?



• Know where you are now: your competitive environment, your market(s), competitive advantages, customer base and internal resources including debt structure and access to financial capital.



• Frame the opportunity(ies) that are present. Assess the risks to your existing environment that each opportunity presents and the rewards that could accrue.



• Close the gaps so that your existing business is not strained beyond it capacity to absorb the inevitable change that new opportunties bring with them.



• Develop scenarios ("What if...") Changes in strategic direction never happen in a vacuum. Assumptions should be documented and become the source of a Plan B, Plan C, etc. Scenarios allow swift course correction when necessary.



• Use action plans to execute the strategy and metrics/scorecards to measure the reality against expected results.



• Keep on keeping on. Strategy design should be on the agenda of every Executive Committee and Board of Directors meeting. This is not a once a year project.

Does your business engage in systematic thinking about your future? Do you apply organizational wisdom or fly by the seat of your pants? Or, do you think the environment is too complex to design a long term strategy?