In general, I'm really interested in adaptivity. Many organizations need to become more flexible to thrive in a digital world, and strategies as they're composed today don't account for the complexity brought about by the proliferation of the internet.

With that said, emergence is so often presented as a do-everything salve. We even fall victim to the absolutist version of this worldview here at UC. I'd love to have a discussion about the application of this concept, why it works, why it doesn't, and what strategists should do about it.

Who wants to join me?

It doesn't work for big problems that big boys solve at big companies using billions of dollars. Telco, aerospace, heavy industry, commodities, etc.

It's cute strategy for cute problems like "I need a better email client," not "I need to figure out whether I should be investing $10+ billion a year in capital into developing a new industry." This applies to like maybe 2% of US GDP?

But you could say that it is responsible for Google's utter failure to successfully create a new sizable revenue stream, and Apple's success at creating entirely new categories.

Another way to think about it is that what he suggests has nothing to do with actual strategy, but merely just solution discovery. Which is small potatoes.

In response to John, I'd like to point out that that Jack Welch is renowned as having been a hugely enthusiastic supporter of relatively open experimentation at GE. Not a company known for doing 'cute' little things.

Also, I think small business is probably a much greater proportion of GDP than 2% (in fact, i just looked it up here: sba.gov - it was 46% in 2008).

Anyway, to move onto the substance of this thread, i'm not sure the use of the term 'strategists' in the post above is useful if it refers to a job given to someone - "you go and strategise this for the company".

I really do believe that strategy is what you do in the short term to advance your principles as a business. It's the principles that need setting.

Oh, and also that strategy is best done collectively and organically.

There seems to be some term confusion here. Experimentation, emergence, and being generative are not all the same thing.

I haven't seen too many corporate examples of emergence (besides Valve). Even Steven Berlin Johnson in Emergence (which I just finished) admitted that it's rare to find it in practice outside of ideal cases like fungi an ants.

And since we're usually all lovey dovey for startups: isn't unrelenting focus to product-market fit the hot strategy these days?

Define "relatively open experimentation." Relative to what?

Companies solving problems like Mailchimp at the scale of Mailchimp are probably about 2% of GDP. The figure you cite includes every private sector non-farm firm with up to 500 employees. I can only imagine that many of these firms are not creating minor applications like Mailchimp, or actively experimenting on a strategic level, nor that they would gain from doing so.

Strategy is most definitely not best done collectively. I'm not sure what organic means in this context.

Collective and adaptive approaches may work for a business with low or no capital requirements, or a firm with a low WACC.

It's also a bit of a logically vacant argument. For example, in his Google example, experimentation is the result of a deliberate strategy to: experiment. There's absolutely nothing emergent about that. Or: what Matt said.

Being an opportunist isn't new. It's difficult for public companies to do. The reasons it's difficult are durable. His recommendation doesn't address those durable reasons.

Some fair points there John. I was talking in some ways about a strategy of experimentation rather than strategy by experimentation or emergent strategy.

But I do think that your characterisation of the vast majority of small businesses (as defined above) as having nothing to gain by experimenting with strategy is closed-minded.

Any business could in theory gain a better strategy by experimentation. E.g. a cafe chain, which can experiment by lowering costs and prices to try to increase volume of sales, or increase quality and profit margin but sell less, and experiments with these approaches in relation to what their local competitors are doing, measures the outcomes and defines strategy based on the results.

No mail apps involved here.

Also, bald statements like "Strategy is most definitely not best done collectively" are not very helpful in advancing debate. Why do you think so?

Emergence is a lot to ask for from a large organization. It will work in smaller groups with the right cultural fit. Most organizations have a tough time keeping people inline with the mission, what they do, why they do. To me Emergence seems a difficult undertaking unless in a small well knit group. As for experimentation; it is well understood but hard to come to terms with and does not always gets supported (beyond lip service). Hence we have too many mediocre companies.. For an organization to succeed by experimentation they should have fear of mediocrity rather than fear of failure. Most experiments fail when the originality behind the experiment changes in the process of de-risking or in an effort to get everyone's buy in.

Kieron - that was bald of me. Apologies. I do think it is an empty statement to claim that strategy is best done collectively. And I think everything is better unilaterally or deliberately, ceteris paribus, because collective action problems (Olson's version, not the new fuzzy version) are nasty and result in suboptimal outcomes most of the time. Also, Christensen's value network framework neatly delineates the private market barrier between collective and deliberate.

Experimentation is great for rapid marginal gains but you rarely see anything revolutionary come out of the kind of experimentation we are discussing here. This isn't Bell Labs, or even Xerox Parc.

For me, the absolute ends of this argument are irrelevant. What is relevant is a shift along a spectrum of speed, steadily decreasing the cycle time of plan → action → learning → plan → action → etc.

Digital technology increases the number of opportunities to develop and launch new ideas faster and with less risk. As digital technology advances and begins to affect more and more types of businesses and business models, the opportunities for more rapid experimentation - and learning - increase.

This is why this discussion is so important in the world of strategy.

Clay - check out the Discovery Driven Planning approach, en.wikipedia.org and the HBR article on it hbr.org

Ana – I dig this; feels similar in many ways to most modern, scientific-method-ish ways of getting to a plan.

And I'll see your HBR link, and raise you another: hbr.org

My question to anybody who wants to answer it (thanks for the discussion, folks!) is as follows: what is the place for the charismatic auteur in this worldview? Amazon is certainly experimental. At the same time, I'd argue that Bezos' view on *what's right* dominates what they do in the marketplace. Can you celebrate emergence and experimentation while staying true to a strongly held vision of the founder?

To answer Clay's original question. I think the author of the Fastcompany article misunderstands the term 'emergent strategy'.

I don't think it's suitable for a company to say 'our strategy is emergent' because that's basically saying 'we have no strategy, we'll work it out as we go'. Which is essentially saying that strategy itself has no value at all, because the whole point of strategy is to act as a set of guiding principles. The idea behind 'emergent strategy' is to be open to seeing how strategy evolves in practice, and then to learn and adjust the strategy as appropriate, i.e. 'Mixing the deliberate and the emergent strategies in some way will help the organization to control its course while encouraging the learning process.'

i don't think that's true - emergent strategy means using the future position as a starting point and working backwards from there, instead of looking at the future from the current position and projecting the ideal scenario, which is what most strategies do and then are surprised when things don't work out.

Well I'm sorry but that might be how you define it, but the author that coined the term does not define it that way: planningskills.com

It's what emerges as the strategy, as distinct from what the deliberate strategy was meant to be.

Thanks, Clay - will look at it.

I don't see this as a black / white situation. Yes, a company may have a very organized way to plan its strategy but also adopt a "quick-win" positioning when the opportunity comes.

Have you guys read those best-seller books Build to Last and Good to Great from Jim Collins? There is a chapter in "Build to Last" that discusses the concept of adaptivity that Clay firstly suggested: "Try a lot of stuff and keep what works" - with some great examples.

Unfortunately I don't have a copy of the chapter online, but here goes the link to the book @ Amazon:

amazon.com

Some great links in here from everyone, I've got my next few weeks of reading sorted, thanks for sharing.

To Mike's point, I agree with you regarding the enabling effects of digital. But won't that just make this kind of experimentation a kind of commoditized strategy based on optimization?

The kinds of adaptivity proposed by the author are subject to all kinds of cognitive biases resulting from digital and quantification and misappropriation of the scientific method. And optimization from these things is almost always marginal. From the original article, it seems like we're talking about a method to identify new opportunities, but this method is incremental and would miss the boat on so many of the big innovations of the last decades.

What do you propose, John?

I think it depends, and that every particular strategy has its day in the sun but in general the failure rate for all strategies is very high, and successes largely result from unique circumstances particular to that case at hand. So I suppose that I think history is the most powerful analytical toolset for really critical strategic decision-making, and, ideally, you'd want someone in charge with the smarts, the depth of knowledge, the willpower, and the authority to make appropriate decisions with a minimum of friction.

We know from Steven Yegge's rant that Bezos did not experiment with APIs. He mandated their implementation. He saw past the first order difficulties into the end game and disregarded lots of internal feedback in doing so.

Lebron James uses emergent strategy:

youtube.com

To explore a different direction and tie back to the original article, it seems most of the examples are of prominent internal visionaries. Jobs. Bezos. etc.

For those of us who work at consultancies/agencies (seems to be most here), is there a place for us in either strategies of experimentation or emergent strategy? The latter seems unlikely, but perhaps there is a role in facilitating experimentation.