Wednesday, June 11, 2008

Strategic Principles - Apple, iPhone and John Boyd's Maneuver Conflict



Time to scratch the webcast itch again. This time I am talking about principles of business strategy.

Some time ago, I Googled out more about Apple's iPhone strategy. More than a million hits, yet I found nothing about the strategic principles Apple uses.

As it turns out, almost every move Apple makes can be interpreted in terms of Maneuver Conflict, a military strategic doctrine created by the late col. John Boyd, U.S. Air Force.

Boyd's ideas has had tremendous impact on military strategic thinking the past twenty years. His ideas are slowly trickling over into the business community.

There will be more videos on Boyd's ideas, and on Strategic Navigation, a business strategy method that combines Boyd's Maneuver Conflict and The Theory Of Constraints.

7 comments:

Vasco Duarte said...

I believe that you have some good points, but don't forget that th ebest explanation is the simplest one, and the simplest explanation is very simple: Apple just wants to develop the best product possible in the fastest time possible.

I mena think about it, it would explain everything you tried to explain in your video using a much more complex/elaborated model...

Henrik said...

Making the best product possible in the fastest time possible are (sub)goals.

Strategy is the method and means to achieve goals.

The difference is important. Having a goal does not mean one can automatically achieve it.

Most companies want to produce good products fast, but few are good at it.

In the case of Apple, it is likely that they use a strategic method that combines careful planning with the ability to take advantages of emergent opportunities.

The principles behind such methods are fairly simple, but not quite as simple as setting goals and go for them without planning or organizing for it.

Today, very few companies do any real planning. Most just set a course and hope for the best. (Hoshin Kanri and Strategic Navigation are the only methods )

A company that can combine good planning with a decentralized organization able to take advantage of emergent opportunities has a very great advantage over almost all existing companies today, big and small.

I intend to show one way to do that in the new series of webcasts. It is not the only way, but it is a way that will suit companies that must be very adaptable, like software companies, and other high-tech companies.

Henrik said...

A few words disappeared in the comment above. The sentence in parenthesis should read:

Hoshin Kanri and Strategic Navigation are the only business strategy methods I know who explicitly integrate planning and execution.

(Chet Richards has a method that is also based on Maneuver Conflict, and I expect that method too does integrate planning and execution. However, I do not know enough about his method to say for certain.)

Vasco Duarte said...

Strategy is critical, but goals are everything.

I understand the importance of making a difference between the goals and the methods to plan/strategize to achieve them.

However, goals are the key. No amount of strategy is going to make a bad goal any better.

Take a very simple goal "Make the Best Phone Ever!", now expand that and repeat it ad infinitum with a single minded focus and you get a better phone, even if not the best.

That's what Apple is doing.

I do think you have many good points, and yes, there's more to goals than setting them and repeating them, but when we look at methods/tools as "the silver bullet" we run the risk of focusing on the wrong thing. It is their goal that makes Apple successful, not their strategic method...

Henrik said...

>No amount of strategy is going to
>make a bad goal any better.

I agree completely. A good goal is necessary. However, a good goal is not sufficient.

You need at least:
* A vision (goal)
* Grand Strategy
* Operational Strategy
* Tactics
* An organization designed to implement the strategy and tactics

(Of course, you do not have to use formal terms, or as formal a structure as I do, but the components must be there.)

For example, as you point out, an organization must focus on the goal, but this is not easy.

Most organizations can't focus very well, because of their internal design. They are designed as collections of parts, where each part has its own goals.

Because resources are limited, and must be shared, the parts must compete in order for them to reach their own goals. When they do this, they can easily compromise the goal of the organization as a whole.

Take a software development consultancy as an example. The company hires out individuals and teams who are (usually) paid by the hour.

Now we take one of the teams and turn it into an agile team, with the goal of maximizing ROI for the customer. The team can suddenly complete its project in one third the time it took using the old method.

The sales department didn't change anything when the development team went agile, so contracts are still time and materials contracts.

If the sales department continues to make as many sales as it had before, the development team will now make two thirds less money for the company.

For the company to make money from going agile, it must make changes throughout its organization. That requires strategic planning.

Just setting the goal of maximizing ROI for customers wasn't enough. If done without strategic planning, it would actually reduce profits for the company.

I do agree that methods are not a silver bullet. That is why good strategic methods, like Strategic Navigation, stresses the importance of understanding the systems where the method is applied.

I am writing a book about business strategy. The first third is about how systems (including people) work, the second third about strategic principles and adaptive organizations, and the third part is about planning. Remove one of these parts, and the other two will fall.

BTW, how to set goals is part of the strategic planning method.

Tom Looy, Tacit Knowledge PM said...

I am currently reading The Living Company and I find his points on corporate strategy very interesting. The author essentially says that a living company does not have a strategy other than continuing to exist. Strategy is a verb - something you do continuously like Boyd does in his OODA loop. It's not something you have.

I'd be interested in your thoughts.

Henrik said...

I agree that strategy must be a continuous process. Reality has no obligation to conform to our plans. The plan begins to diverge from reality the moment we fix it in our minds.

I believe that bad strategic planning can be worse than no explicit strategic planning at all. If one tries to plan everything up front, then blindly executes the plan, the results will usually not be very good. We've tried that in the software industry for forty years. Didn't work.

I also believe that failing to plan is planning to fail. If we do not plan at all, we will be totally unprepared for every difficulty life throws at us.

The trick is to regard strategic planning as emergent, and retain the ability to quickly take advantage of a situation as it unfolds. A good martial artist pays a great deal of attention to strategic planning. So does a master chess player. It does not mean they follow a predetermined list of moves when in a match.

The core of the strategic plan for my company is a three page Future Reality Tree. That is all that is needed. On the other hand, I believe those three pages are a necessity. I would not want to be without them.

I haven't read The Living Company (thanks to you, it is on my reading list), but the idea that a company is, and should be treated as, a living work community is right on the spot. (I got that much from reading about the book at Amazon.)

It meshes very well with Boyd's idea of having a Noble Vision, and a common orientation for the entire organization. Boyd too was concerned with the "organic whole" of organizations.

One thing we have to be careful with when talking about strategic planning is our definition of strategy.

There are several different schools of strategic planning, and some of they are so different they do not consider what some other schools do to be strategic planning at all.

For example, I am in the Strategic Navigation camp. Strategic Navigation defines strategy as:

Strategy is the methods and means required to satisfy the Necessary Conditions that must be fulfilled in order to reach the ultimate goal of a system.

"Methods and means" means planning and execution must be seamlessly integrated.

On the other hand, I had a look at a strategy book from another school recently, and it said explicitly that implementation was out of scope of the book. (The book also botched a description of Boyd's OODA loop by simplifying it to a degree that made it useless.)

To me, that other school is weird. On the other hand, Strategic Navigation looks mighty strange from the viewpoint of some other schools:

Future Reality Trees? Project planning as part of the strategy development process? Brainstorming with little slips of paper? Explicit focus on people over technology? Allow people to fail, then encourage them to talk about it? Having teams that make their own plans for how to achieve objectives? Relying on well defined goals and tacit knowledge more than explicit, detailed instructions?

Scary stuff. Sounds like agile at the organizational level...