Friends,
I hope that all is well with you and yours.
In the northern hemisphere, whereabouts one finds my humble abode, we are moving swiftly towards glorious summer. I must admit I that am more excited about it than I have been in many years previously; one of the (innumerous) privileges of having a small child is getting to see the world through their beautiful eyes. Of course, there is also almost no end to all the imaginable (and unimaginable) events that might unfold thereafter.
For the long-time subscriber, this may provide a hint about today’s topic. I have written about what can come to be – in fact, I even half-jokingly created a theorem about it – and it is there, in what is called the adjacent possible, that we will start our thematic journey of discovery into the world of the ‘other’ Ps of marketing.
But before I explain why, I thought that I would very briefly share a couple of updates on what has been happening of late on my side of the screen.
Firstly, I can officially confirm that I will be making my debut at the Cannes Lions festival this year. Alongside James (Hankins), I will be presenting key insights from our latest e-commerce report for WARC. In addition to what we consider to be another set of groundbreaking (and very timely) findings, we will be offering advice on what steps businesses and marketers alike might want to consider next. More details will follow soon. Should the stars and moons align, and you happen to be in the area, please do swing by and say hi.
Secondly, I can for the first time reveal that the new book on modern strategic management and the ABCDE framework is being co-written with Steve McCrone. To say that it is an honor to have him on as a co-author would be an understatement of biblical proportions. Steve is an absolutely brilliant business strategist and has a grasp of organizational complexity that few on the planet (yours truly included) can match. For an introduction to his work on adaptive strategy, have a look at this video. I highly recommend it.
Now.
Onto the topic at hand.
A reminder
Among the many aspects of applied complexity theory that I find invaluable for a holistic understanding of strategy in practice, the principle of the adjacent possible is not only among the most powerful, but also the most accessible and therefore useable. Obviously, it is for this reason that I have continuously made reference to it and am going back to it today.
In short, as a reminder, it can be defined as ‘what can come to be’ in any given context; that which is one step away from what currently is.
When we last discussed the concept, I used Stuart Kauffman’s original protein acid example to demonstrate how only a fraction of all possible combinations had come into existence, and how nowhere near all will. It was not a matter of evolution of the fittest, but a pure mathematical exercise.
Crucially, however, the sample space (how many variations of a particular length of protein chain there were) was known. In complex adaptive systems such as markets, it is not. This meant that while the events that could unfold – just as those following decisions made by a toddler – were not infinite, they were indefinite. As a result, it was (and is) impossible to calculate the probability of market occurrences with perfect accuracy regardless of the amount of data collected. The future, in other words, remains something we cannot entirely plan for. Shit, as they say, happens.
This has obvious implications for how organizations should approach strategy in general, and the planning school of thought in particular, but the principle of the adjacent possible also has a significant impact on how we perform diagnoses and generate insights – our focus for the next few newsletters.
At least so I would argue. Ideas, it would appear to me, can only ever begin at the edge of what is currently known. It is not until we have identified where we are that we can identify where it is possible to go and thereby maximize the evolutionary potential of the present (what one might even claim to be the essence of strategy).
A starting point
All strategic diagnoses begin with data collection in a broad sense. We gather stories, behaviors, patterns, statistics and facts from both inside and outside the organization to understand the context in which we are intended to act. Although it should not need saying, this also includes information about the business model as it will inevitably constrain any subsequent work.
Once we have firm(er) ground to stand on, we can start to identify what the adjacent possibles are and whether they might lead us somewhere beneficial. To paraphrase James McQuivey, this means focusing on today’s adjacent possibilities, not tomorrow’s distant improbabilities.
Traditional strategists might, of course, balk at this suggestion. They love the idea of the ten-year plan. But the uncomfortable truth is also undeniable. As we have established previously, there is no way to anticipate all the adjacent possibilities that might combine between now and a faraway future to accurately predict what could happen and what response might be suitable; most adjacent possibilities on which one will depend have yet to emerge from the combination of other adjacencies on which they will depend.
Fortunately, few in the corporate world are, from my experience, as well equipped to identify promising combinations – and thereby come up with new ideas that, even by incremental improvement, are those that lead to disruptive change – as strategists are. For such is the strength of the generalist; she is able to see connections, identify patterns and imagine recombinations. By comparison, specialists tend to see the world through a much narrower lens, limiting what might come into the adjacent possible.
This also means that strategists should lead the organization in any given (what I call) Clash point – the moment in time where it has to decide the balance between whether to stay (and exploit that which has worked in the past) or go (and explore that which may work in the future). The adjacent possible defines the options. The trick, as Steven Johnson once put it, is to figure out what they are and whether they might lead us somewhere beneficial; an uncertainty that can only be mitigated by posing the right questions.
And it is those that we will be spending the next few newsletters trying to define. I do hope you will join me in my efforts.
Until next week, have the loveliest of weekends.
Onwards and upwards,
JP
From an ecological perspective the “adjacent possible” is an affordance, an action possibility that the environment presents or “affords” us with to achieve our purposes. Finding affordances is the essence of improvisation, which entrepreneurs excel at. In my experience affordances are more easily discovered “on the ground” than seen “from the air”. This best places and times to search for affordances is in the spaces and on the occasions when value is either being created or destroyed. The Japanese call them “gemba”.
I recall when I was responsible for a wholesale steel distribution business occasionally getting up at 4.30 am to ride in the steel delivery trucks with the drivers. It turns out that the customer’s yard is an important gemba. A sharp-eyed driver can assess the state of the customer’s business, determine whether competitor’s trucks are present, what they are loaded with, and develop relationships with the yard boss to get our load taken off as soon as possible. Looking to your drivers for this kind of intelligence and behaviour and sharing that knowledge ties them into the organization’s mission in new ways.
In organizations the only way to turn abstract ‘Whats’ into concrete ‘Hows’ is to connect the ‘Whats’ to individuals’ experiences. When this happens, the drivers as a group can become a source of advantage to the company; they will grow in the process as they start to connect actualities with possibilities – what they see and hear with what they do. They will start talking to each other, telling new stories about themselves and their experiences. Their activities will take on new significance. Horizontal communication will increase, a sense of coherence will emerge and slowly the corporate narrative will change. In what many people think of as a commodity business, like steel distribution, the competitive edge consists in many people performing scores of mundane actions all together and a little bit better than the competition. The same is true of top performers in many fields; excellence is often mundane!