The Strategy Paradox: Why committing to success leads to failure (and what to do about it) |...

The Strategy Paradox: Why committing to success leads to failure (and what to do about it) | Michael E. Raynor | Read this book before your competitors do

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The Strategy Parad...

	The Strategy Paradox: Why committing to success leads to failure (and what to do about it) Michael E. Raynor Doubleday Business, 2007 - 320 pages average customer review:based on 35 reviews view larger image
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highly recommended

Requisite uncertainty and human capabilities

Zachary Stein ((Harvard Graduate School of Education) & Theo L. Dawson (Developmental Testing Service)

We agree with many of the other reviewers of this book. It combines high quality scholarship and accessibility, making it stand out from most of the popular leadership literature. But we think most of the other reviews have missed a key dimension of Raynor's model, a facet of his vision that sets it apart from the more traditional literature on strategies and organizations. With a nod to the research of Elliot Jaques, Raynor makes it clear that the proposed model of "requisite uncertainty" would have us build organizations that are sensitive both to the demands of the marketplace and the realities of human capabilities. We all know that organizations need to be responsive to socio-economic trends and uncertainties, but only a select few are privy to the notion that organizational hierarchies need to be designed in light of facts about human cognition and cognitive development. In our minds, this latter point is what sets the "Strategy Paradox" apart.

Individuals occupying different roles are faced with different demands. This we all know. But Raynor helps to clarify just who should be doing what, and moreover, what those at the top need to do to handle the unprecedented uncertainties of post-modern socio-economic conditions. As Raynor explains, these high-level demands cash out in terms of dialogically rich inquiry-based procedures for "crystallizing and preserving a diversity of opinions" regarding strategic options. Needless to say, that's a tall order that not just anybody can fill. What's preferable is not always possible. Our only criticism is that Raynor has too little to say about the cognitive capabilities that would make his vision possible. There is a rich literature about adult cognitive development and its measurement that Raynor does an inadequate job of referencing. Jaques and Kegan are the tip of a very complex iceberg. And frankly it's an iceberg that might sink this ship.

From where we sit, the model is incomplete without further consideration of the cognitive demands of "Strategic Flexibility." Any life-span cognitive developmental psychologist will tell you that less than 3% of the adult population in the developed world has the cognitive skills to meet these demands. We don't mean to rain on the parade, but for this model to work we need to ensure that those who engage in the highest levels of strategic planning are equipped with the requisite cognitive and discourse skills. Without them, real-world implementations will be less than stellar.

To sum up, our reading of the "Strategy Paradox" reveals a devil in the details. We think that Raynor's radical suggestions regarding human capabilities and organizational strata are the trend-setting elements of his model. Zeroing in on these suggestions exposes a formidable challenge.

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Read this book before your competitors do

I have very high hopes for Raynor's book - it might force business practitioners to think more deeply about formulating real strategy and structuring the organization for competitive advantage. Most treatments of strategy address competitive dynamics (in the line of Porter), likewise positioning, or competency leverage (Collins). Raynor brings forward insights from his research and publishing in innovation (The Innovator's Solution), Harvard doctoral research, and the practical understanding that comes from actually consulting. While his book could anchor a top-notch MBA course, it might lead a good company's board to make much better strategic decisions.

I would not compare The Strategy Paradox with popular business books, such as The Long Tail or even Good to Great, but instead deeply-researched work like Alfred Chandler's. Raynor reveals the perils and promises of strategy formulation, the management of strategy and commitment, and the design and execution of strategic options. Keep in mind that most of what's published in journals and books is very loose, or even just junk research. Strategic management remains largely influenced, in the actual practice of corporate decision making, by Porter's 1980's work, resource allocation, and what I call Powerpoint SWOT. So who should care? Just about every executive and business unit-level manager. And, of course, educators and consultants focusing on business strategy and organizational dynamics.

It is one of the few works on competitive strategy that guides organizational structure as well as business positioning - not directly through guidance on design, but in terms of organizational function necessitated by requisite uncertainty. Raynor never mentions "strategic alignment," a troublesome notion from consulting with no good research support. Rather, he demonstrates how organizational focus on strategic action (as implied by "alignment") results from appropriate structural management, where uncertainty and commitment are appropriately weighted in the hierarchy. In time for Alfred Chandler's handoff to history with his passing in May, Raynor retrieves the original effectiveness of hierarchical management, and maps it functionally to uncertainty. This cleanly obviates the necessity for fuzzy nostrums such as "strategic alignment." (Or perhaps it saves it, for fans of alignment approaches).

Raynor explains complex business scenarios with a brisk storyline. The footnotes are a fascinating secondary read - the points are backed up by his research, Harvard studies, and dozens of well-cited papers. While optional to the main points, the research is actually useful and interesting. Some key concepts are novel in strategy research, such as the application of Elliott Jacques' work on requisite organization to support the principle of Requisite Uncertainty.

I highly recommend this book, and if you are an executive or board advisor, I urge you to read it before your competitors do.

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Raynor has put time back into strategy

I won't repeat the powerful insights stated by many of the other positive reviewers. Read them yourself. They are special in their own right!

Raynor's latest book is beautifully written. It should all be savoured (slowly if necessary)...

The chapters which I believe Raynor will be truly remembered for are nestled in the middle (chapters 6-8). In these wonderful pages he rightfully restores "time" into strategy-making ("who stole time?", should indeed give rise to several more business books).

Leveraging Elliott Jaques' seminal work on time-spans of discretion, Raynor introduces "strategic flexibility" with compelling clarity and irrefutable logic. As an added bonus, he also illuminates the real role of corporate boards with such lucidity, that reading SOX prescriptions in future will seem sadly impoverished.

I have seen and heard Raynor speak in public. He is a virtuosic whirlwind on stage. Read this book. It is even better than the live performance.

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Key Concepts Make it Worth Buying

I enjoyed The Strategy Paradox, and have added it to the Pearls of Wisdom page on my site. Powerful concepts in the hands of enlightened leaders, particularly those leading large organizations:

1. Extreme strategies do not come without risk
2. You don't have to predict the future to be successful
3. Divide responsibility for strategy formulation by time horizons
4. Give your organization a chance to adapt and succeed in the most likely future scenarios through options not commitment

In my mind if you get come away from a business book with one or more useful insights, then it was more than worth the time invested. This book is definitely worth the time if you are already (or aspire to be) a corporate leader or strategist.

Five star content!

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The system encourages mediocrity.

Raynor's book is not the easiest read, but then again, that says more about the reader than it does about the book. The concept is rather revolutionary--and thus, difficult to digest immediately--in that it suggests almost everything we know about strategy and success is wrong. All the books, studies and anecdotes are comparing successful companies and mediocre companies instead of what they claim to do: compare success and failure. If they actually did compare the two, Raynor claims, you'd find a lot of similarities. That all too often, the keys to success are the recipes for failure. And that the people who we hold up as fearless leaders are really just one change in fate away from being the people we mock as losers. He's saying that this is inevitable, after all, how can a study include the business that started and failed and no one ever heard of? Thus, we only see wild success or middle of the road, bet hedgers.

Von Clauswitz talked of this too, saying that as we examine history, before we judge military defeats we must consider what our opinion would be had they succeeded. In other words, if the insurgent resistance in Iraq hadn't been so strong or if the WMD had materialized, would Bush's unilateral, undertrooped strategy be as derided as it is right now? Or if weather hadn't beaten back the Persians at Thermopylae, would we still think them arrogant and brash?

Accordingly, Rayor's book is a very unique look at some of the most illustrious examples of business failure. We see that some of Sony's biggest gaffs, had the market gone the way they'd hoped, would have been their biggest successes. This is true because of the theories two assumptions:

1) A successful strategy requires full commitment
2) Full commitment, in light of unpredictable futures, can mean catastrophic failure

And thus, the more you strategize, the more likely you are to be both massively successful and massively unsuccessful. The only middle ground--and often the most commonly taken--is mediocrity, where the company is neither successful or driven out of business.

Raynor poses a conclusion we often find ourselves also coming to:

"The only way [Company X] could have managed the situation any better is to have predicted the future...and that of course, is impossible. The future never gets here."

He sees strategies as equity or stock. You're purchasing the stock, and if you guessed right, you make money and if you guess wrong, you lose. The real way to succeed then, is to buy options on stocks. Essentially, to set up multiple, concurrent strategy options, from which you can then "agree to buy" the winners. These options then make your chosen strategy mobile in the face on an unpredictable future. This gives you strategic flexibility.

Overall, this was a very interesting book. The review deriding it above are to be expected--if we could all understand this, it wouldn't exactly be a paradox or problem would it? Pick it up and even if you don't understand every word, merely being cognizant of the dilemma would help you.

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reviews: 1, page 2, 3, 4, 5, 6, 7

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