Adapting & Improving
On adaptive strategy
Friends,
I hope that all is well with you and yours.
A couple of updates on my end before we begin.
Firstly, the white paper that I am co-penning with James Hankins – the headline findings of which we presented in what was dubbed by some “the best ever talk at Cannes”, which obviously is a sign of impeccable taste and possibly early morning drinking – is just about finished. I have another couple of pages to edit and a few of items to add, then it is off to WARC for publication in September.
Secondly, some of you have asked me about my MarketingWeek columns; a long time has passed since my last one. The reason is as predictable as it is dull: I simply have not had the time. However, after a couple of fruitful conversations with Russell Parsons (the editor-in-chief), I have agreed to write one piece every two months. It will not be the standard opinion fare, as there are far too many of them around already, but rather an in-depth market analysis tailored specifically to marketers. I will begin working on the first one as soon as the aforementioned paper is done.
Lastly, as previously promised, we will start rolling out online lectures with some of the top experts anywhere this fall. Further information will soon be provided in a separate email, but I can reveal that premium subscribers will be prioritized.
Now onto today’s topic.
Born of Practice
In the early years of my career, which began a couple of centuries ago (or so it feels) as a lawyer specializing in corporate finance and corporate governance, my view of strategy was very much traditional. As is taught in most business schools of note, I considered it a purely top-bottom affair; those highest up in the organization, whose responsibility it is to make the business succeed, should dictate the future. Everyone else should do as they are told and stick to the plan.
Of course, I soon realized that this is an entirely theoretical, not to say naïve, way of approaching things. The abstract platitudes taught in MBA programs and suchlike – sustainable business advantages, robust strategies, focus and so on – work splendidly on the written page, but offer little practical guidance on everyday issues in the commercial reality. Akin to how neoclassical economic theory must assume that consumers are perfectly rational in order to make the mathematics work, classic strategic management doctrine hinges on the ability of strategists to foretell and control their environment.
As a result, it is common that strategists are trained to think that success is but a matter of engineering; as long as we accurately define in detail how we will win, victory becomes inevitable. Yet, as most with practical experience will know, once we have finished our strategic plan, full of groundbreaking insights about thereto hidden human truths and whatever else we tell ourselves amid the smug celebratory back-patting, something that we had not planned for inevitably happens. And so, we have to do it all over again.
Or at least I did. Granted, this was rather lucrative – another dip back into the client pool, another refresh and course correction. But I felt as if I was merely repeating a broken process.
In the real world, from my experience, if a strategist failed to correctly diagnose a problem, the strategy would inevitably fail to solve it. If the strategist had managed to correctly diagnose the problem, others might not agree with the proposed solution, and the strategy would inevitably fail to be executed as intended. If the strategist had managed to correctly diagnose the problem and convince others to agree with the proposed solution, there would still always be external interference, and the strategy would inevitably fail to be realized as intended.
Not all intended strategies were realized, nor were all realized strategies intended. Practical strategies, I discovered, could clearly form as well as be formulated.
In Strategy in Polemy, I wrote at length about this balance between deliberate and emergent strategies. The job of a strategists, as far as I was and remain concerned, is to master it. And that, in a nutshell, is what adaptive strategy is about.
Not an Antonym
Unfortunately, it is in our human nature to seek the opposite of whatever is not working; we overcorrect. The term adaptive strategy is thus often misused, its nuance lost in favor of a binary counterweight to strategic planning.
Take, for example, BCG’s interpretation:
“Adaptive firms continuously vary the way they do business by trying many novel approaches and then scaling up and exploiting the most promising before repeating the cycle. Successful adaptive firms outperform rivals by iterating more rapidly and effectively than their competitors.”
Although the idea that one should continuously disrupt oneself undoubtedly is a popular theme among the big four, it is also largely nonsensical; it would inevitably lead to organizational chaos. An endless series of pivots from one thing to the next is merely unconstrained movement – a massive waste of time and money. This is admittedly not a huge issue for a consultant without skin in the game, but potentially catastrophic for anyone with.
Actual adaptive strategy is not about running fast all the time, but creating the ability to run fast when one needs to. While experimentation, as we know from previous newsletters, is a large part of it, the point of the exercise is not to “vary the way in which one does business” by running perpetual cycles in sequence, but to make it resilient by running coherent, safe-to-fail experiments in parallel. Trial and error cannot, as Nassim Nicholas Taleb once noted, be unconditionally effective; it causes planes to crash, buildings to collapse and knowledge to regress.
Adaptive strategy, as utilized by those who know it well, is not about reinvention, but adding a responsive capacity that allows one to enhance that which one already knows to work in ways that makes the whole stronger than the sum of the parts. It is not about generalizations or all-ins, but refinement and context.
One cannot respond to everything, nor try everything; there simply will not be enough resources. So, inevitably, one has to prioritize and allocate accordingly. If all one’s resources are allocated to experimentation, to borrow a point from Steve, one has no idea what one is doing. Each experiment will start over from scratch. If one cannot allocate any resources to experimentation, well, then there will be no capacity to innovate.
Next in Line
Ever since I launched Strategy in Praxis a year and half ago, we have been building the argument for adaptive strategy. The culmination of it, or so I hope, will be the launch of the new book and the formal introduction of the ABCDE framework.
And so, in the upcoming weeks, we will continue to look at the practical obstacles that are so often conveniently overlooked in traditional discourse and move toward our shared understanding of success: a superior way of doing strategy in the real world.
And we will begin in seven days with something entirely negative. But not in the way that you are now thinking.
Until then, have the loveliest of weekends.
Onwards and upwards,
JP
This newsletter continues below with a market analysis exclusive to premium subscribers. To unlock it, merely click the button below.