The one about 2024
And strategic scaling too
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.
Today, we look back at the year that has been and ahead to the one that will be. For premium subscribers, there is also a continuation of last week’s discussion of strategic scaling.
Additionally, as ever, there are the market vitals and some personal notes, this time featuring Christmas colds, too much cooking, the last few remaining keynote slots for H1 (spoiler alert: get in touch ASAP), market perception vs reality, worrying trends in leveraged loans, and the many narratives surrounding OpenAI.
Now accepting keynotes for 25Q1-25Q3
Every year for the last decade or so, I have created three main presentation decks. For 2025, however, I have (for the first time) added a fourth due to popular demand. They are:
What to Do When You Don’t Know What to Do: How to turn change into a competitive advantage. (Based on the new book by the same name.)
Leadership in a Time of Change: How to steer an organization through a sea of uncertainty.
Resilient Retail: How to build a profitable retail business in the modern marketplace. (Based on the 2025 follow-up to the highly praised 2022 white paper The Gravity of e-Commerce.)
Artificial Intelligence Beyond the Fantasy: How to understand the narratives, risks, opportunities, and best uses of a new technology.
If you want to book me for your event, corporate speaking slot, or workshop, merely send me an email. To make sure I am available, please do so at your earliest convenience; my availability is limited and the schedule tends to fill up fast. More information may be found here.
A couple of updates before we go-go
Ah, the holidays. Food, family, bonhomie, and colds. This time around, the wife and yours truly are knocked out, as is the youngest. The eldest appears almost entirely unaffected.
Thankfully, we did not have any travels planned for this year; the weather is too dull up north (not enough snow, too much wind) to bother going. But trying to get much of anything done at home is… …challenging.
Thus, if this newsletter appears unusually incoherent, I can only apologize; I am writing it with a fever and a massive headache while my eldest daughter is playing in my office (and asking her to leave is, for obvious reasons, out of the question).
As for Christmas itself, it was nice, though somewhat bittersweet. Due to prior engagements - the reality of doing what I do - I had to spend about eight hours on the day in the kitchen, which meant that I missed a lot of the family stuff that I had most looked forward to. Certainly, you cherish the moments, but you also wish that there were more of them.
Anyway.
H1 is shaping up quite nicely, with a significant number of international keynotes already confirmed. There are only three slots still available:
First week of February.
Mid two weeks of April (a schedule re-opening due to a cancelled event).
First two weeks of May.
H2 is decently open still, but requests are starting to come in.
Should you be considering bringing me in, now is thus very much the time to let me know. Ideally as soon as possible.
Moving on to the markets.
The market vitals
As previously alluded to, the main thing I am seeing in the markets is the continued discrepancy between what people think and what is. So far, perception has been deemed far more important than reality, a perhaps unsurprising fact given that it is there that Wall Street stands to make the most money. But going into 2025 expecting a smooth ride appears naïve.
As per FT, defaults in the global leveraged loan market are at their highest since 2020. The main contributor is the US, where defaults on junk loans are even worse: decade highs. The reason, in simple terms, is that leveraged loans have floating interest rates. Companies took on the debt during the pandemic when a) changes in consumer behavior caused financial duress, and b) the rates were unusually low. Now that rates have been high for a while, firms are starting to hit a financial wall.
The situation is not exactly miles better for fixed rate loans. To a point made three weeks ago, with higher interest rates come higher bond yields. For anyone holding large amounts of long-dated, fixed-rate asset, that could mean greater unrealized losses as bond values decline. We already know from Silicon Valley’s demise last year, and First National Bank of Lindsay this year, what that may lead to.
Although the Fed has brought the rates down, it is far from a given that more cuts are on the way. On the contrary, the Trump administration’s fiscal policies will likely cause higher inflation, which would force Powell & Co. to raise them again.
At the very least, as a strategist, I would think carefully about where the company keeps its funds. If the deposit is uninsured, or insured to a low amount relative to the total placed, and sits anywhere other than at a too-big-to-fail bank, I would consider moving it.
From one thing to something completely different, it is interesting to read the various narratives surrounding OpenAI. Depending on whether the commentator has drunk the proverbial Kool-Aid or not, conclusions vary spectacularly.
On one hand, it is clear that the “dramatic improvements” that Sam Altman promised a couple of years ago are still missing in action. GPT-5, his firm’s supposed next big step, is not only being delayed but also proving immensely costly to develop even by AI standards - both in financial and data terms. And yes, that is saying something.
On the other, the market seems to be buying whatever OpenAI is selling regardless. The other day, the company released a new version of its reasoning model, o3, that supposedly “achieved a step change in benchmark scores” (the words of Benedict Evans) and has people believing it might be the next milestone after ChatGPT. But while a more advanced and efficient reasoning model could form the underpinnings of Orion (GPT-5 by another name), the news is hardly equivalent to evidence that it has or ever will.
Moving on.
2025: A Retrospective
The years that were and will be
Every year, for the final installment of Strategy in Praxis, I take a look back at the previous twelve months. My reasoning is simple: many hundreds of you have joined since we last woke up the morning after the night before, fireworks and champagne still fresh in mind. A look back provides an opportunity to catch up.
In retrospect, it is clear that we delivered on the foundational promise. That is to say, we began with theoretical insights, applied them to practical matters, and learned from the implications; is this modus operandi of praxis from which the newsletter gets its name. However, there is always room for improvement. Thus, if there are any particular topics that you would like me to cover within the three main themes for 2025 (see below), please let me know via the comment section or an email.
All articles referenced are possible to access via the archive. Though I am entertaining the idea of opening year-old articles up to all readers (effectively putting them behind a 365 day paywall from the day of publishing), for now, premium articles will remain available to premium subscribers only.
Q1
Along with a new weekly feature - market vitals available for all - the year began with a deep dive into uncertainty. We explored not only what the term entails and the various forms that uncertainty takes, but also what most people (including risk managers) get fundamentally wrong. Once we had, we moved onto more practical matters and invited Steve to talk about his professional experiences.
With an understanding of uncertainty established, we took a look at its strategic implications, including the crucial importance of adding strategic resilience to a firm. Two key concepts were subsequently introduced: the law of stretched systems and the market dynamics that define the 4E model. We concluded our investigation with an interview featuring none other than David Woods, arguably the foremost resilience engineering expert on the planet.
After a one off about knowledge work, we launched a new theme inspired by a subscriber reflection: there are many others like Woods, masters anonymous outside of their respective fields, who ought to be highlighted. And so began a series on the undeservedly unknown with William Starbuck and Robert Burgelman.
Q2
The second quarter continued as the previous one had finished. We highlighted the works of Alicia Juarrero, David Graeber, Jane Jacobs, and John Boyd, before taking a brief hiatus to discuss the worrying state of modern management discourse and developments in artificial intelligence, respectively. After the pause, we returned to John Boyd to break down his famous OODA loop.
The newsletter then shifted gears to another new theme, as we began to introduce the differences between adaptive strategy and conventional schools of thought. In particular, we broke down how not all theoretical foundations are alike, how much (if not most) of what we think we know about strategic management is demonstrably untrue, and how to get out of flawed modes of thinking.
Q3
H2 began with a couple of odd ones - the purpose paradigm and another strategic analysis of AI - after which the summer guest columnists arrived. This year, the star-studded lineup consisted of:
Paul Bailey on constraints in branding
Robert van Ossenbruggen on understanding metrics
Doug Garnett on action, instability, and profitability
Nils Wimby on the architecture of marketing
Colin Lewis on managing oneself
Neil Perkin on the importance of contextual understanding
Claire Strickett on what made a wine book author give up drinking
Christopher Bramley on going from case to context
Mark Rukman on how creativity is the new literacy
Steven McCrone on leadership in complexity
Each brought something unique to the table, but also added a list of entirely practical takeaways - another example of how we used the theory to set up the pragmatics.
Q4
In the last quarter of the year, we began to prepare for what is to come: the biggest and most important step that this newsletter has ever taken. And I do mean that. Adaptive strategy, the practical aspects of which will be covered in the year to come, is becoming so successful that the big firms are starting to poke around. We are about to put our flag down.
To be able to successfully do so, we first defined the most important concepts in complexity science as well as their origins. Among the topics covered were the adjacent possible, emergence, how to build adaptive capacity, the limitations of numbers in complex contexts, and the fundamentals of adaptive strategy.
We also found time to break down the practicalities of experimentation (and somewhat disagreed with Jeff Bezos), and analyzed what a strategy really is.
The year ahead
In 2025, our focus will remain on praxis but be more heavily skewed towards the practical. Although we will continue to establish the reasoning behind our actions, it is the latter that will take center stage; by now, you have all had a chance to get up to speed on the theory. I will, of course, provide links to previous newsletters, but it is high time that we moved on from that which has featured so heavily of late.
There will be three main themes, all directly related to adaptive strategy:
Strategic management (in a broad sense). We will discuss another number of frameworks and models commonly used in practice, but also the everyday tasks and assignments that strategist have to face, so that we may contrast conventional “solutions” with adaptive strategic approaches.
Innovation. One of the most common problems with the ways of old is that they stymie innovation, but few firms understand why or how. Hence, we will attempt to provide help - and establish the counterintuitive power of not knowing what to do.
The ABCDE framework. Yes. It is time. At long last.
And there we have it. 52 emails later, a quarter of which contained two newsletters in one, we have arrived.
Before we finish, however, a last word.
Thank you for being with me. I know that authors write such words almost as if it were demanded of them, but I genuinely mean it. As an independent consultant working hard on a revolutionary new approach to strategy, I am effectively climbing up a very steep mountain without rope. You make the journey worthwhile - and our next step will be our most thrilling yet. There is no doubt in my mind.
Until then, I wish you the loveliest of New Years.
Onwards and ever upwards,
JP