There is a strategic model that incorporates this idea, the OODA loop. Look and behold the OODA loop in all its gory complexity:
The OODA loop is originally a military strategic concept created by U.S. Air Force Colonel John Boyd. Some experts consider Boyd to be the greatest military genius of the past two thousand years. Like Sun Tzu and Musashi, his ideas have been applied to business strategy as well as military strategy. Boyd developed a strategic model that is called Maneuver Warfare. (Boyd did not use this name himself. He called it Maneuver Conflict.)
The OODA loop isn't prescriptive in the way the PDCA/PDSA, TOC Focusing Steps, or Test-Driven Design loops are prescriptive. The OODA loop describes how we all interact with our environment, whether we know it or not. However, if we understand the OODA loop, and consciously develop our ability to go through it faster, we can develop considerable strategic and tactical advantages.
Look at the Orient phase in the OODA loop. There you will find several factors that influence how we interpret our observations. Therefore, they also influence our decisions and our actions.
Let's apply this to something I find particularly interesting: how organizations choose strategic methods. The act of choosing a strategy is itself a strategic decision.
If we only know one strategic paradigm, and choose a strategic method from within the range of options provided by the paradigm, we loose the ability to improve beyond what the paradigm allows.
Strategic Planning in Functional OrganizationsMost organizations are functional. That is, the organizational boundaries are organized so that each part performs a specific function. Such organizations have strategy, the What To Do, in one part of the organization, and tactics, the How To Do It, in different parts.
Prestudies, strategy, process development, and execution are often treated separately. Because the different phases are done by different people, there are a number of hand-offs. At each hand-off, information is lost or distorted.
Each phase is usually executed in series, so it is difficult to go back to an earlier stage if necessary. The people who did the job are busy with something else. If they were consultants, it may not be possible to find them at all.
In effect, the strategic models used by functional organizations often look like this:
Functional organizations like to be on the OODA bandwagon too. Because the organization has difficulties implementing the concepts, they modify the meaning of the loop instead. I recently saw a strategy book that depicted the OODA loop like this: The picture above captures the idea of an Observe-Orient-Decide-Act cycle. Unfortunately, the thing that makes OODA work are
- the many little feedback loops that have been removed
- the awareness of how our observed data is filtered and shaped in the Orientation phase.
- the conscious choice to use the OODA loop at all levels in the organization
- the strategic thinking that goes with it
Operating with a crippled OODA loop and a strategic model that separates strategy and action may not kill you, but the faster the environment changes, the more hampered your organization will be by its own strategic model. If the environment changes fast enough, the organization may eventually become so out of touch with reality that it collapses and dies. (Remember Facit, anyone?)
When business strategy experts like Sutton and Pfeffer, and William Dettmer, talk about most strategic methods being of questionable value, it is this kind of strategy they are talking about: strategic models that may very well produce impressive results on a planning level, but never manage to produce measurable results.
For example, the book where I found the crippled OODA loop stated that implementation was outside the scope of the book. Unfortunately, this is likely to kill the value of the strategic planning model, even if the model itself is good. Execution will be separate in time, space, and resources. This severely reduces the chance of success.
I am not saying a functional organization should ditch their traditional planning models on my say-so. I am saying their leaders need to think extra hard about which strategic models that fit their purposes best, and compare that with what they actually use.
The mistake most do, is to pick the strategic model that is most convenient for the current organization. This has the effect of freezing the organization in its current state. Everyone keeps doing the same old thing. New strategies are indistinguishable from old strategies, and are adapted to be convenient rather than effective.
Here is one thing to consider: If the strategic planning model has little feedback, or if there is a significant delay in feedback, how are the strategic planners supposed to evaluate their strategy? Even if there is feedback, the entire process is so slow the original planners may not even be there anymore, especially if they were hired guns. Without feedback, there is no basis for improvement. An individual can do strategic planning for twenty years and still be lousy at it, because he never gets any feedback. The same goes for the organization.
Strategic Planning in Flow OrganizationsIn a flow organization each part of the organization is responsible for a flow, a series of operations. Such organizations tend to use strategic models that integrate strategy and tactics into a unified whole.
For example, Toyota and Hewlett-Packard use Hoshin Kanri (Policy Deployment), sometimes called Hoshin Planning. Hoshin Kanri integrates planning and execution. Separating them makes no sense whatsoever.
The Hoshin Kanri strategic cycle is slow - usually a year, but there are smaller, daily feedback cycles that help keeping the organization on track.
Strategic NavigationThough Hoshin Kanri is proven to be very effective, my preference is for William Dettmer's Strategic Navigation. Strategic Navigation combines the principles of Maneuver Warfare with the analysis and planning tools of The Logical Thinking Process. The result is fast high quality strategic planning, and seamless integration between planning and execution.
Because of the short OODA loop cycle time, a Strategic Navigation team can run many passes through the strategic level OODA loop while the strategy is executed. At each pass, the strategy is refined, so that it is always current.
Of course, you don't refine your strategy twice a week just because you can, you change and revise as often as needed.
The OODA concept applies at all levels in the organization. That is part of its power. Using the same concepts everywhere furthers understanding. Understanding is necessary to bridge the gap between planning and execution.
The Strategic Planning model places great emphasis on the organization understanding what its leaders want. Upper management sets objectives and provides a resource framework. Units lower in the organization have a lot of freedom in how to achieve the objectives.
A functional organization can use Strategic Navigation as well as it can use anything else. There is a varying amount of organizational inertia to overcome though. fortunately, Strategic Navigation also offers an opportunity for an organization to improve itself, becoming faster, and more efficient.
Strategic Navigation has guidelines for how to make an organization more flexible and responsive. The ideas were originally developed in order to make the U.S. military capable of quick response, and countering guerilla tactics, but the range of application is much wider than that. Business organizations, hospitals, any kind of disaster response, police, non-profit organizations, all can benefit from becoming faster, more responsive, and less wasteful.
Thus, a functional organization that goes with Strategic Navigation can become as responsive to its environment as it wants to be, up to and including abandoning the functional model for a more modern flow organization or decentralized network model.
Oh, and don't discount the fun factor. A Strategic Navigation organization is fun to work in. Management is free to focus on the really important stuff. At lower levels, employees have a lot of freedom in how to achieve their goals. (When I began studying Boyd, I found I had to modify some of my notions about how the military works. My own military service, more than 25 years ago, wasn't very Boydish.)
Does it work? Yes, it has been proven to work. For example the U.S. Marine Corps has reorganized along Maneuver Warfare principles, making the organization much quicker to respond than it used to be. The most famous use of Maneuver Warfare to date is Operation Desert Storm.
I expect to be writing a good deal about Strategic Navigation the next few months.
I'm currently reading Beyond Budgeting, and I think it is a nice complement to Strategic Navigation.
Although I haven't yet seen an explicit linkage, Beyond Budgeting provides a set of policies and guidelines that enhance Strategic Navigation.
Under traditional budgeting, the link between strategy and execution is damaged by the slow, rigid, and politicized budgeting process. Moving to a less predictive, more adaptable approach to capital and spending makes the lower-than-executive levels of Strategic Navigation work in harmony with the organization. It truly implements the notion of "Commander's Intent."
Since you're a fellow Boyd/OODA advocate, I think you'll find Beyond Budgeting worthwhile.
Thanks, I'll read it. I do believe moving away from big batch budgeting is important.
I never could understand why the optimal budgeting period is the same time it takes for Earth to revolve around the Sun. Seems to much of a coincidence to be credible.
Also strange that one year is supposed to be optimal for all companies. :-)
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