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 | A significant intellectual contribution

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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

Strategy for Change

Dr. Raynor's book is required reading on dealing with change. Accepted wisdom is to adapt to change, and not to adapt is to be left behind to go out of business. As a consultant in understanding customers and performance management, I certainly see first hand the benefits of the former and the consequences of the latter.

"The Strategy Paradox" describes the limits to adaptability, that it is only viable when the pace of organizational change matches the pace of environmental change. Responding to either fast or slow change can leave strategies mismatched, and that increasing adaptability will eventually destroy strategy.

Dr. Raynor also provides new insight to the concepts of requisite uncertainty, and responsibilities for longer strategic horizons at higher levels in the organizations.

Of course, he also brings great clarity to his main themes, the strategy paradox of risk and return, strategic options, and resolving the conflict between commitment and strategic uncertainty in real situations.

This means that all of us dealing with strategy and culture change, which is almost everyone, need to read this book as soon as possible.

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A significant intellectual contribution

A significant intellectual contribution and a welcome addition to the serious management literature.

The author basically argues that most studies of "great organizations" are incomplete because they compare companies that are spectacularly successful against those that are simply "mediocre." Drawing management practices solely from "great" companies in studies like these, he says, is fundamentally flawed, because they omit the most revealing comparison set, namely, those companies that have failed. His surprising finding is that when you compare the spectacular successes with the spectacular failures, they actually look pretty much the same: they both tend to have very clear strategies and consistent, focused execution against those strategies. The difference being that the failures simply picked the wrong strategy.

The "Strategy Paradox" is that the strategic bets you need to make to pursue "spectacular success" (high commitment of plant, capital, technology, etc.) simultaneously increase your odds for "spectacular failure." The rest of his book presents a mind-set and tool-set leaders can use to mitigate the risk inherent with high-return strategies, increasing their odds of success.

The job of the CEO is central to his approach. Basically, the CEO plays a "different in kind" strategic role. Instead of making strategic "commitments" (this role falls to operating unit leaders) and "executing" against them (this role falls to functional leaders), the CEO should be in the business of creating strategic "options," so that as the future changes, operating units have alternatives.

Because of the extreme uncertainty about how the future will turn out in the long term, the CEO's ability to create "real options" against various scenarios of how the future will turn out becomes critical to long-term organizational success. The CEO does this through intelligent investment (partial equity stakes in emerging technologies, etc.) and other mechanisms that create options that divisional leaders can "exercise" or "abandon" as the future unfolds.

I recommend this book highly and consider it one of the few true "paradigm shifting" books out there--meaning, one that can permanently affect your leadership mindset for the better!

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Perspective Plus Critical Insight on Strategy

This book deals with some of the most important issues in strategy direction, integration and execution by posing the true paradox of commitments made under conditions of business uncertainty. Through deep and insightful thought, and the terrific depth of the supporting research on strategy principles and practices referenced, the author nails three issues that separate reality from myth and noise in strategic leadership and management today.

First, it tackles the issues of hard choices versus options in strategy direction, suggesting that companies can derail themselves with overcommitments.

Second, it recognizes the uncertainties that surround decision making and resource allocation at the strategy integration level.

Third, it opens discussion about strategic cause and effect, in essence, reframing the factors that influence the creation of strategic and economic value.

This book is part of a great new genre in strategy material, one that escapes from the attractive but suspect story telling and fad surfing that has tended to pollute critical strategic thought and behavior over the last decade. For serious students and practitioners of strategy, and for those in board positions with strategic oversight roles, this is a five star book that demands study. For those just entering the strategic journeys of their respective organizations, this is important work that should become part of your analytic and planning agenda.

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An exploration of commitment

This book does an excellent job exploring the dynamic nature of strategic commitments. Building a strategy is a learning process. What Raynor shows by argument and example is that each investment in a strategy, is in effect a test of an hypothesis. The results need to be examined carefully, because "success" measured in current profits is not necessarily evidence that the premises of the strategy are correct. Raynors arguments are particularly useful at a time when financial markets and the financial press focus on "success" making it easy to make precisely the mistakes he highlights.

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Birth of a Classic

The Strategy Paradox is one of the most useful analyses of business success in the last decade. It is not a quick or simplistic set of secrets to success, followed by a one-size-fits-all, 7 step implementation plan. Instead, it starts with a careful analysis of both business successes and failures, then demonstrates how the challenge of making strategic commitments in the face of uncertainty can be managed effectively. Raynor's description of strategic flexibility provides one of the most useful approaches to integrating scenario planning and real option portfolio management to create a customized, flexible and difficult to copy strategy for success. Rich with examples from his research, and supplemented with extensive, explanatory footnotes, Raynor has created what will certainly become a classic.

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

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