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January 11, 2006

Why Strategists Must Think "IT" Through

Our big challenge with strategy is to tame it -- to translate the alchemies, voodoo and romance of intuitions and insights and intents, into something credible and practical; into capabilities and competencies that make a virtual opportunity real.

We took three shots at this.

(1) One translation is a thought experiment. Surveying the vast inventory of literature on strategy, we took a moment to try to parse its boundless advice into its typical themes -- with results such as: why to pursue execution for value; how to avoid a position of (poor) performance; and so on. Then we looked at the themes for their generic components. It gave us the following table of elements with which to reconstruct and predict themes:

This provides a hope that by mixing the building blocks (left to right) in different ways, we could derive the not-too-many worthwhile starting viewpoints, and thus throw a defensible practical fence around strategy! Each uniquely different combination of elements could be considered a certain known problem to solve -- addressed by strategy literature's various promotional and cautionary tales.

But such high-level problem definitions are mainly conceptual. To get them more specifically in focus, and get their corresponding solutions down to earth and in-house, we also need each element of a problem's definition to be detailed by the additional aspect of "management" vs. "infrastructure". Drilling down into the elements that way, we still "choose and add" the different elements to each other (left to right) to derive the problem statement. Connecting fine-grained elements to each other may actually give a more precise surface description of a particular organization's issue, but at the same time it accounts for how some problems leave us not being able to see the forest for the trees. Our table can help bring the forest into view.

(2) Another translation is already explicitly described in the literatures. Regardless of how many ways strategy stories begin, much of the discussion ultimately drives to the same counsel -- that decisions reshape the organization, after which the organization's operation must be motivated enough and funded enough to stay with the program.

This summary casts long political and cultural shadows over all discussions of any competency and capability that are to be acquired and committed.

(3) In a third and parallel translation, we note that all strategy refers to an opportunity (whether remedial or progressive) -- and opportunity always refers to the perceived characteristics of currently acknowledged conditions. In pursuing strategy, decisions follow the anticipation, observation and analysis of those conditions. Challenged by the conditions, much of this pursuit is competitive.

But the way we see those conditions increasingly finds them loaded with characteristics that exist only because of the impact of information technology. Because IT utilization dominates the shaping of the environment that strategy wants to exploit, strategists must always factor in IT. The way that IT changes things becomes the focus of concern, even moreso than the particular features that have been wrought.

Of special importance, "IT Innovation" means that people can know different things, in different ways, at different times than previously, and furthermore do different things than they have before about what they know. Put so bluntly, it is obvious why strategy cannot be well formulated without factoring in IT -- IT can be the thing that defines the competition -- whether the competition is an environment or another actor.

The question is, will the strategist's own organization manage IT utilization to virtually pick the competition that it wants to have?

Posted by Malcolm Ryder at January 11, 2006 8:13 AM

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