Chapter 3 Strategizing

Chapter Objectives

By the end of this chapter, the reader should be able to discuss:

 how strategy is viewed in a b2change organization  the key components of strategic intent  the key elements of the strategizing process

There are both content and process issues involved. That is, strategy is an integration of identity and intent, but it is not a static “thing.” Strategizing involves the orchestration of identity and intent over time and in concert with the creating value and organizing processes.

Readers will quickly note that there is no chapter on the second core process – Creating and Adding Value. We decided, fairly early on in the book, that the creating value process was really integrated into both of the other processes. So, creating and adding value is an integral part of the strategizing process (as shown in Figure 3.1), and it’s a critical part of the designing process as the reader will see in Chapters 4 through 10.

Built to Change Strategy: Craft a Series of Temporary Advantages

The third built to change strategy is similar to the first one…with a twist. In the first strategy, we suggested that organizations need to seek temporary advantages. We wanted to challenge the notion of a sustainable advantage and shift people’s thinking from stability to change. In this strategy, we take one step toward refining that idea –craft a series of temporary advantages. The b2change organization, utilizing information from a future-looking environmental scenario process, thinks carefully and shrewdly about how the organization will be successful now, in the very near future, in the near future, and in subsequent periods of time. Seeing strategy as a series of advantages prevents the organization from designing a single organization and prevents the assumption of stability from taking root. Chapter Outline

1. Strategy in B2Change Organizations 2. Identity  Clarifying Identity  Identity and Change

Note: Identity is an important concept in the Built to Change Model. As we thought about an organization that was changing all the time, it quickly became apparent to us that we could not push the metaphor too far. If EVERYTHING was changing all the time, we believed the people in the organization would go crazy. Sociologists call it “anomie” or feelings of alienation and anxiety resulting from a lack of structure or purpose. As a result, we believed that even a b2change organization needed something that was not going to change. The concept of identity – a combination of the organizations internal culture and external image – provided the answer.

The difficulty of identifying and changing identity is the key reason why transformation is such a difficult and hazardous type of change.

3. Strategic Intent  The Five Elements of Strategic Intent Breadth Aggressiveness Differentiation Strategic Logic Orchestration

Note: we settled on these five dimensions of strategic intent by integrating the models from population ecology (breadth and aggressiveness) and the work of Hambrick and Fredrickson (2001). In Hambrick and Fredrickson’s article, they described arenas, vehicles, differentiators, staging, and logic. We substituted breadth for arenas, replaced vehicles with aggressiveness, retained the elements of differentiation and logic, and really extended their staging concept into our orchestration concept. We believed this definition and operationalization of intent has some real advantages. First, by expanding and developing the orchestration idea, it honored one of the best parts of Hambrick and Fredrickson’s frameworks: formulation and implementation cannot be divorced from each other. Second, the pieces of the model are all very changeable and under management’s control. Third, it was much more management friendly than the population ecology model.

Orchestration is an important element because of is dual and integrative role in a b2change organization. It is both an element of intent (the implementation plan) and a capability (the social capital that results from experience in changing the organization over time).

See the presentation slide deck for summaries of the model and the

Exercise: It’s important that people “get” the notion of strategic intent. As an exercise, have people pick an organization they are familiar with and diagnosis its strategic intent using the five elements. The tricky part of identifying intent is not the characterization of the five elements (although that can be difficult and it is not always important to identify all five elements), but in coming up with a phrase, metaphor, or summary statement that captures the essence of the five elements. elements.  Quality of Strategic Intent Robustness and Intent Identity and Intent Capabilities and Intent

Note: People often ask, “what are the characteristics of a ‘good’ strategy?” In the context of a changing environment bounded by alternative potential scenarios, robustness is probably the most important, and that’s a deviation from the normal answer. Similarly, the intent must honor identity and leverage capabilities.

4. The Strategizing Process

Note: What’s really important about this section is that it describes the process a b2change organization changes the way it is changing. A b2change organization is making strategic adjustments all the time. The strategizing process is designed to help the organization determine if it needs to shift into a different type of change in an effort to achieve improved proximity or a better critical configuration.  Phase 1: Strategic Review  Phase 2: Strategic Choice  Phase 3: Strategic Change Orchestration Leads the Change Reorientation Is Planned Transformation is Risky

Note: See the presentation slides for a graphic of this process that can be used in class.

5. Conclusion

Strategic adjustments and reorientations are the point forte of the b2change approach. Their identity, strategy, competencies and capabilities, and organization design all support the mind-set and reality that change is a normal and routine process. B2change organizations • Are concerned about the future and use environmental scenarios as important inputs to any discussion of strategy. • Comprehend the power of a well-understood identity. They take the time to be clear about what their identity is, where it comes from, and how it contributes to success. • Have an identity that focuses on the environment and supports change. • Have a robust strategic intent that is likely to bring the organization into proximity with a variety of future environmental demands. • Make changes in their strategic intent in anticipation of shifts in the environment. Intent is not changed randomly or frequently but is informed by analyses of what the future is likely to hold. • Ensure widespread participation and involvement in the review of strategy, the communication of changes in strategy, and the reconfiguration of strategy. • Rely on a vibrant orchestration capability not only to manage strategic adjustments but to initiate changes in intent. • Find the positive aspects of their current identity and leverage them when change is needed.

Hambrick, D. and Fredrickson, J. (2001). “Are you sure you have a strategy?” Academy of Management Executive 15(4): 48-60.