Steps Towards Business Agility
The Art of Strategy: Setup
4. How to create resilience
What is strategy? Why do you need it? How do you do it? And, how can you be more certain to succeed? The Art of Strategy provides timeless answers to these eternal questions. It is a modern reading of Sun Tzu’s Art of War using the lenses of strategists John Boyd and Simon Wardley (swardley). All parts. Other reading formats.
Sun Tzu
Skilled leadership
first makes the organization resilient;
then wait for competition’s fragility.
Resilience rests with the organization;
fragility with competition.
Skilled leadership can achieve resilience,
yet are unable to cause competition’s fragility.
Therefore, success is known
and secured when the opportunity comes.
Resilience lies in defense, success in the attack:
a defensive strategy alone is incomplete;
a pure attack strategy is wasteful;
defend at disadvantage, attack at advantage;
skillful defense uses landscape; skillful attack uses climate.
In such a setup, the organization is safe until success is certain.
Anyone can see the obvious success;
anyone can struggle for success and be praised;
anyone can lift an autumn down;
anyone can see the sun and the moon;
anyone can hear the thunder.
Skilled leadership’s success looks easy
since it is well-prepared.
Therefore their wisdom is without fame;
their courage without honor.
They engage without mistakes.
Without mistakes, success is certain
since competition is already defeated.
Skilled leadership create conditions for success
and use competition’s mistakes.
Thus,
success is secured before engagement starts;
failure comes from first engaging
and then trying to create conditions for success.
Skilled leadership prepare
by cultivating purpose and doctrine;
this governs success or failure.
The following determines strategy:
- Maps
- Capabilities
- Assessments
- Decisions
- Success
Landscape determines maps;
maps affect capabilities;
capabilities determine assessments;
assessments determine conditions;
conditions determine success.
A successful organization is
like a pound compared to an ounce;
a failing organization
like an ounce to a pound;
That is the weight of success.
A successful setup is
like the sudden release of pent-up water
plunging down a ten-thousand foot ravine.
Boyd
From A Discourse on Winning and Losing.
The Strategic Game of Interaction and Isolation
The aim or purpose of strategy is to improve our ability to shape and adapt to unfolding circumstances, so that we (as individuals or as groups or as a culture or as a nation-state) can survive on our own terms. The central theme is one of interaction/isolation while the key ideas are the moral-mental-physical means toward realizing this interaction/isolation.
The strategic game is one of interaction and isolation. A game in which we must be able to diminish adversary’s ability to communicate or interact with his environment while sustaining or improving ours.
Interaction permits vitality and growth while isolation leads to decay and disintegration.
Interaction
We must uncover those interactions that foster harmony and initiative—yet do not destroy variety and rapidity.
Interactions, as shown, represent a many-sided implicit cross-referencing process of projection, empathy, correlation, and rejection.
As human beings, we cannot exist without an external or surrounding environment from which we can draw sustenance, nourishment, or support.
Physical Interaction occurs when we freely exchange matter-energy-information with others outside ourselves.
Mental Interaction occurs when we generate images or impressions that match-up with the events or happenings that unfold around ourselves.
Moral Interaction occurs when we live by the codes of conduct or standards of behavior that we profess, and others expect us, to uphold.
Physically we interact by opening-up and maintaining many channels of communication with the outside world, hence with others out there, that we depend upon for sustenance, nourishment, or support.
Mentally we interact by selecting information from a variety of sources or channels in order to generate mental images or impressions that match-up with the world of events or happenings that we are trying to understand and cope with.
Morally we interact with others by avoiding mismatches between what we say we are, what we are, and the world we have to deal with, as well as by abiding by those other cultural codes or standards that we are expected to uphold.
Isolation
Physical Isolation occurs when we fail to discern, perceive, or make sense out of what’s going on around ourselves.
Mental Isolation occurs when we fail to gain support in the form of matter-energy-information from others outside ourselves.
Moral Isolation occurs when we fail to abide by codes of conduct or standards of behavior in a manner deemed acceptable or essential by others outside ourselves.
Physically we can isolate adversaries by severing their communications with outside world as well as by severing their internal communications to one another. We can accomplish this by cutting them off from their allies and the uncommitted via diplomatic, psychological, and other efforts. To cut them off from one another we should penetrate their system by being unpredictable, otherwise they can counter our efforts.
Mentally we can isolate our adversaries by presenting them with ambiguous, deceptive, or novel situations, as well as by operating at a tempo or rhythm they can neither make out nor keep up with. Operating inside their OODA loops will accomplish just this by disorienting or twisting their mental images so that they can neither appreciate nor cope with what’s really going on.
Morally adversaries isolate themselves when they visibly improve their well-being to the detriment of others (i.e. their allies, the uncommitted, etc.) by violating codes of conduct or behavior patterns that they profess to uphold or others expect them to uphold.
Wardley
From Wardley Maps.
Climatic Patterns for Setup
You cannot measure evolution over time or adoption, you need to embrace uncertainty.
Not everything is random. The probability that something will happen vs the probability when this something will happen.
There can be many climatic patterns involved in anticipation. Whilst there are many areas of uncertainty in a map, there’s an awful lot of things we can say about change as highlighted in the figure below
(1) Everything evolves. Any novel and therefore uncertain act will evolve due to supply and demand competition if it creates some form of advantage.
(2) Success breeds inertia. It doesn’t matter what stage of evolution we’re at, along with past success comes inertia to change.
(3) Inertia increases the more successful the past model is. As things evolve then our inertia to changing them also increases.
(4) No choice over evolution. The Red Queen effect will ultimately force a company to adapt unless you can somehow remove competition or create an artificial barrier to change.
(5) Inertia kills. Despite popular claims, it’s rarely lack of innovation that causes companies to fail but inertia caused by pre-existing business models. Blockbuster out innovated most of its competitors through the provision of a web site, video ordering online and video streaming. Its problem was not lack of innovation but past success caused by a ‘late fees’ model.
(6) Shifts from product to utility tend to demonstrate a punctuated equilibrium. The speed of change across different stages tend to be exponential.
(7) Efficiency enables innovation. A standard componentization effect.
(8) Capital flows to new areas of value. A shift from product to more industrialized forms will see a flow of capital (marked as a light blue line) from past product companies to utility forms along with investment in those building on top of these services.
(9) Coevolution. The shift from product to more industrialized forms is accompanied with a change of practice.
(10) Higher order systems create new sources of worth. The higher order systems created though being uncertain are also the largest sources of future differential value.
As you develop skill in understanding the landscape and climatic patterns involved, you will find yourself being able to increasingly anticipate common forms of change.
Doctrine for Setup
Manage failure. In any system there is risk. Use the maps where possible to help you understand failure modes, what can go wrong and what will be impacted if a component fails. Try where possible to mitigate risks by distributing systems, by designing for failure and by the constant introduction of failure (use of chaos engines such as Netflix’s chaos monkey). Avoid known failure modes such as building large scale (death star) like efforts.
Provide purpose, mastery and autonomy. Provide people with purpose (including a moral imperative and a scope) for action. Enable them to build mastery in their chosen area and give them the freedom and autonomy to act.
Be the owner. Take responsibility for your environment, your actions within it and how you play the game. You could outsource this to a third party in the way a chess player could outsource their gameplay to another but you won’t learn and it is still you that loses.
Exploit the landscape. Use the landscape to your advantage, there are often powerful force multipliers. You might decide not to take advantage of a competitor or a change in the market but that should be a conscious choice.
Think big. Whilst the actions you take, the way that you organize and the focus on detail requires you to think small when it comes to inspiring others, providing direction and moral imperative then think big. Your purpose is not to defend the narrow pass of Thermopylae but instead to defeat the Persian army and save the Greek states.
Be humble. Listen to others, be selfless, have fortitude and be humble. Inspire others by who you are and what you do. There are many ways to manipulate the landscape e.g. with marketing by persuading others that what is a commodity is somehow different or that a product is unique to them. But these manipulations come with a cost not just externally but internally. We can start to believe our own hype, our own infallibility and our “right” to the market. Avoid this arrogance at all costs.
Gameplay for Defense
Standard ways of protecting your market position:
- Threat acquisition: buying up those companies that may threaten your market.
- Raising barriers to entry: increasing expectations within a market for a range of user needs to be met in order to prevent others entering the market.
- Procrastination: do nothing and allowing competition to drive a system to a more evolved form.
- Defensive regulation: using Government’s to create protection for your market and slow down competitors.
- Limitation of competition: through regulatory or other means including erecting barriers to prevent or limit competitors.
Gameplay for Attack
Standard ways of attacking a market change:
- Directed investment: a venture capital based approach to a specific or identified future change.
- Experimentation: use of specialists groups, hack days and other mechanisms of experimentation.
- Creating centers of gravity: creating a focus of talent to encourage a market focus on your organization.
- Undermining barriers to entry: identifying a barrier to entry into a market and reducing it to encourage competition.
- Fool’s mate: using a constraint to force industrialization of a higher order system.
- Press release process: write press releases before building anything. Since you can’t write a press release for something not invented yet, this has the effect of concentrating people on commoditizing pre-existing acts which you can write a press release for.
- Playing both sides: in any war, there are those that will benefit from fighting and destruction that it causes.
The Art of Strategy: All Parts
Contents: A very short summary of each part
Introduction: What is strategy and why do you need it?
- Assessments: How to assess, prepare and shape
- Challenges: How to use and reduce inertia, entropy and friction
- Success: How to succeed together with stakeholders
- Setup: How to create resilience
- Momentum: How to use creativity, focus and timing
- Shaping: How to shape and avoid being shaped
- Engagement: How to engage using surprise
- Adaptations: How to adapt to shifting situations
- Movements: How to move to optimize momentum
- Landscape: How to approach difficult areas
- Situations: How to handle difficult situations
- Disruption: How to disrupt and avoid being disrupted
- Intelligence: How to use intelligence to create foreknowledge
Annex: Wardley Mapping Examples
Glossary: Explanation of key terms and symbols
Acknowledgements: Standing on the shoulders of giants
Sources: Where to learn more
Other reading formats: Hardcover, paperback and PDF
This is provided as Creative Commons Attribution-ShareAlike 4.0 International by the author, Erik Schön.
Wardley Mapping is provided courtesy of Simon Wardley (swardley) and licensed as Creative Commons Attribution-ShareAlike 4.0 International.
