Lines & Boundaries
ABCDE part deux
Friends,
I hope that all is well with you and yours, and that this e-mail finds you on a boat with shoddy connection, in the tropics, three months after I sent it.
Now accepting keynotes for 23Q4-24Q2
Every year, I create three main presentations. For 2023, they are:
Delusions of determinism: Why planning for success leads to failure
Regression toward the meme: Why modern leadership continues to fall into old traps
Under pressure: Retail in a new financial era
If you want to book me for your event, workshop, or corporate speaking slot, just send me an email. To make sure I am available, however, please do so at your earliest convenience; my schedule is filling up fast - and I will be raising my prices at the end of the year.
More information can be found here.
A couple of updates before we go-go
The cardboard mansion is back with a vengeance. No longer do I live in the (relative) tranquility of a (relatively) renovated few rooms.
In this phase, we are doing the upstairs bedrooms (painted, but not finished; still need to put in a new floor, lamps, sockets, and suchlike), the downstairs hallway and the kitchen. This means that all of the new things for said kitchen - the white goods, lamps, stone floor, cupboards, and so forth - have to be stored somewhere else.
And yes, I know. It is very much a first-world problem. But I am currently sitting on a couch in our media room surrounded by dry foods, bowls, plates, cutlery, and mountains of whatever else as far as the eye can see. It is only a matter of time before I end up with a fork in my thigh, be it by accident, from our toddler, or just to see if I still feel.
Also, it is odd how my wife always seems to have a “work event” on any day that comes just before the builders are scheduled to arrive - the last day of tearing many things down and putting many others away. Hmmm.
On a rather more serious note, the webinar will take place on Thursday October 26, at 10am CET. We will discuss some of the eye-opening findings of the new book and, for the first time ever, reveal its name. If you want to join, you must reach out before the event via this email, so that we may send you the link to it. Needless to say, we will not use your email for anything else; this is a newsletter about real-life strategy, not some inbound marketing wankathon.
I was recently interviewed by Ian Snape for his lovely Salience podcast. Among the topics we discussed was that of today, but we also covered things such as vector measures in practice, the difference between adaptive strategy and agile at scale, and more. The episode should be out soon, so keep your eyes open.
Moving on.
The negotiable nature of boundaries
Strategies are better set in mud than etched in stone
Going back to what we were supposed to discuss – ahem – today’s topic will be strategic boundaries; the B in ABCDE.
Long-time subscribers will recognize it as a topic which we have covered before. In short, boundaries may be described by comparison.
In traditional strategic (planning) methodology, the effort can be said to be the equivalent of drawing a line in the sand and telling people to stand on it in the name of so-called alignment. The governing hypothesis is that this will make firm and employee behavior alike predictable, desirable, and controllable.
The problems with the approach, however, are manifold. Not only does it tend to become highly inefficient over time as employees waste time and effort trying to get back in line after a step outside of it, but it also kills innovative capabilities and destroys resilience. Sticking to the plan becomes more important than success.
By contrast, boundaries are the equivalent of drawing two lines in the sand. Employees are not allowed to cross them, but encouraged to adapt to their specific context in-between. Instead of being measured against the micromanagerial demands of linear alignment, action is considered appropriate if it is coherent (the practical details of which we discussed in last week’s premium section) and moves the firm in the right direction at the right tempo.
The implications are profound.
The positive approach (adherence to a strategic plan) assumes knowledge of an unknowable future. The negative approach (coherence within strategic boundaries) assumes only that there will be unknowns. One may say that it is the difference between foresight and insight, between the ability to seize only opportunities seen in advance and the capacity to make the most of them as they emerge, between tomorrow’s distant improbabilities and today’s adjacent possibles, between assuming the static and assuming the dynamic. Or to put it slightly differently, it is the difference between believing that management holds all the information and knowing that is rarely the case.
Where, when, why, and how to define strategic boundaries for any particular company will vary (naturally), but common to all is that they are subject to change over time. The reason is obvious: contexts shift. What is forbidden today may become allowed tomorrow. Consequently, boundaries should be durable but malleable; they should be firm but negotiable.
This is particularly important to note given the recent trend of defining bad practice.
One of the key issues with best practice, as we know from previous newsletters, is that it presumes repeatable order - that the same behaviors, rules, and heuristics lead to the same outcomes irrespective of time and place. That may sometimes be the case in operations (such as factory conditions), but is rarely the case in strategy.
Much like how we may define the strategy through negation, some have therefore taken to instead establish what is to be considered bad practice, thereby, or so the reasoning goes, creating wanted behavior through the elimination of unwanted behavior. The snag is that it sets in stone what bad behavior is, and what is outside of the line at one point may be inside of the line at another if said line moves.
But negotiability also allows for course-correction. One of the most dangerous traps with traditional frameworks is that, as we point out in the book, even if the winning aspiration is flawless, tiny flaws in subsequent strategic interpretation may eventually amplify like ever-increasing rings on the water and cascade throughout the organization. Supporting management systems then lock the issues in, effectively ensuring that they endure; the problems are either never seen beyond the operational level (to steal a line from Steve: good news is accelerated, bad news is stalled) or widely noticed but, due to path dependency effects, painfully slow to be fixed.
In other words, by inverting the traditional approach and shifting from one metaphorical line in the sand to two, one may enjoy a number of immediate benefits, ranging from strategic and operational adaptability to an evolving but maintained sense of identity, direction, and momentum. By ensuring that the boundaries are also negotiable, one may also avoid some of the most common pitfalls in modern management.
A start at least, shall we say.
Next week, we are going to apply some of what we have discussed to a practical case.
Until then, have the loveliest of weekends.
Onwards and upwards,
JP
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