On Strategy: "Engagement-scapes" are changing in the 21st Century and altering strategyOrganizations today, must accurately and quickly (as speed is essential) redefine their strategy to compete based on innovation and creative optimization of resources, rather than on the profits of how to do things cheaper, and sustainable competitive advantage if they wish to survive in this 21st Century.21st Century strategy moves away from command-control and competitive advantage objectives to focus on new concepts for engaging employees and customers more smartly; for bringing R&D and its innovations and IT and its communications/intelligence into the very core of the organization; and for rethinking the engagement-scape from something that acts like a linear playing board into something more multidimensional and non-linear that considers the changing velocities of cycles, the weak signal areas at the intersection of basic and applied research, and that embraces all of the dimensions of a collective and collaborative network-connected world. Frank SowaFS_1983ac66-ef0b-11e5-ab79-232f81186f3cFrank Sowa is the founder/CEO of The Xavier Group, Ltd. and has helped over 40 Fortune 500s, multiple government agencies and educational institutions, and over 600 organizations (companies, non-profits, and start-ups) with their strategy since 1981. Copyright©2016LeadersTo remain viable today, leaders need to create a more visionary culture shaped around an organizational core that encourages its people to seek out and share 'evidence' on anything they can find that shows that things are changing. Further, those leaders must have access, acquire an understanding and an 'art' of what they are looking at (i.e. weak signal patterns) and for (i.e. tactical purposes and objectives), have the skill sets to determine what should shape the 21st Century business portfolio, what should be prioritized in R&D (so researchers can explore more freely and develop more innovatively), and then make real-time decisions based on what they’ve learned. ... survival in the 21st Century._1983af22-ef0b-11e5-ab79-232f81186f3cTo redefine strategy to compete based on innovation and creative optimization of resources_1983aff4-ef0b-11e5-ab79-232f81186f3cEngagementIn this sixth post in the "On Strategy" series, I'm going to discuss how the“engagement-scapes” are changing in 2016, and why that’s important to understand for creating successful 21st Century strategies. ("Engagement-scapes" -- a key aspect of strategy formulation -- are the places or the physical, territorial, digital, virtual, or real arenas where you dynamically engage in activities with rivals, customers, workers, suppliers, and other resources and assets.) Traditionally, these scapes were imagined like a playing board for board games, but in the 21st Century they must be conceived as something broader.ForesightAny good 21st Century strategy today must be forward-looking, multi-dimensional, and tackle how to properly deal with disruption and changeSpeed... speed of decision is of the essence, and is what will provide any advantages now and into the future. As for strategy, it can no longer be slowed through long periods of deliberations, nor can it be so formalized into elaborate details for sustainability’s sake, as with the seven-week product/service cycle this no longer makes much productivity or financial/profitability sense.TransformationFortunately for some, the 20th Century command-control power structures still remain in place and dominate things -- even if they are outmoded, socially and humanly destructive, and dying by today's standards. In the transitional period, which may remain for a few more years, those organizations that approach 'transforming' their operations, culture, and strategy formulation with a focus on speed and an improvisation and adaptation to change will be more successful than those who remain in the outmoded mire.ImprovisationAdaptabilityResourcesKey elements in formulating any new strategy remain. All new strategies today still need to know what resources are needed and how and why they should be positioned within the engagement-scape. (Resources are: materials, suppliers, marketing, product/services, employees -- all human resources, patron customers, facilities, contractors, automation and robotic systems, etc.)OptimizationAll strategies today still need to be able to understand how and why to use its engagement-scapes (as defined above) in the most optimal way to achieve the desired outcomes of the strategy. However, key objectives (as I stated in the last post) have changed. Any strategy that does not deal with these changes can become a "bad" strategy quickly!SourcesTake advantage of new sources of resources._1983b094-ef0b-11e5-ab79-232f81186f3c1Resource sources are changing. Resources still can come from "stock" or via a supply-chain, but they now can also be made from raw resources on-site by advanced manufacturing, nano- and meta-technologies, cellular and/or rudimentary chemistry, custom-job-shops, they can be created in-house from raw materials using 3D printing (additive manufacturing), or they can be altered using software that is now designed to alter functionality and processes without changing hardware (i.e. Tesla cars). This will alter supply-chains and supply-chain management in the very near future, as the changes actually began to take shape nine years ago (or earlier)._1983b152-ef0b-11e5-ab79-232f81186f3cSupply ChainsConsider alternative supply-chain models._1983b1fc-ef0b-11e5-ab79-232f81186f3c2Supply-chains and supply-chain management are changing. Strategy must consider (it must systematically weigh and measure) whether it makes sense any longer to begin with an assumption that the linear and scalable (mass movements of volumes of resources over distances) within current supply-chain models are the only viable means to remain in control of its resources. If not, then how do any changes in supply affect the strategy and its corresponding engagement-scapes? They must also understand that high-speed information flow, communications, and data transfer DOES make anything linear somewhat obsolete -- and that by 2025, that obsolescence will be so evident that it may destroy those organizations who haven't dealt with that change._1983b2b0-ef0b-11e5-ab79-232f81186f3cChangePrepare to respond to the ever-increasing velocity of change._1983b36e-ef0b-11e5-ab79-232f81186f3c3The value of competitive advantages and "winning" are changing. Strategy in 2016, needs to shift priorities away from winning the "scape" as preached predominantly by Michael Porter (the five forces analysis strategy tool) of the Harvard Business School since the late '70's as the "accepted approach of sustainable competitive advantage." Porter's Five Forces tool is a simple and useful tool to help understand both the strength of your current competitive position within an industry, and the strength of a position you're considering moving into. But, there are many shortcomings with its use today. In terms of supplier power, (as we’ve mentioned) the supply-chain is rapidly changing and suppliers today will have less ability to control pricing -- even with unique products and/or services. In terms of buyer power, as more customers begin to really understand the value and reach of the Internet and other networks as well as alternative production and pricing methods, they can (and will) drive the majority of prices to commodity levels for most items or services (and eliminate shipping and handling costs) especially for anything that is mass produced or designed for mass distribution as a service. Porter also assumed that all rivals are "competitors." But, as we've seen with disruptive innovations, all "rivals" may NOT be competitors, nor are all competitors rivals. Further, as the product cycle, which is now at seven weeks, takes away more of the "cash cow" (competitive) advantages experienced in longer product cycles -- keys to success will fall further away from competition -- and will become more and more based on how fast an organization can respond to the ever-increasing velocity of change. As for the concept of threat of substitution, because we are still transitioning, it is still something that needs to be analyzed in the short-term. However, recognizing the "new normal" in product cycle -- once customers understand the product cycle ramifications -- you can consider the threat of substitution (and especially for all mass produced products and services) to almost always be a threat to weakening your strategic power. Finally, in terms of the threat of new entry, consider that threat to remain at the highest levels from the day you read this, onward. _1983b42c-ef0b-11e5-ab79-232f81186f3cBusiness ModelsConsider new business models._1983b4ea-ef0b-11e5-ab79-232f81186f3c4Peter WeillIn the mid-'00's, Peter Weill, chairman of the MIT Sloan School of Management's Center for Information Systems Research (CISR), created some great principles and a framework to revamp the fortunes of an organization as they adopt operations to an enterprise-wide digital business model (something that I feel is essential for all organizations that desire engaged customers and who wish to ensure employees work smarter now and through the 21st Century, as everything continues to digitize and grow in complexity). Weill's framework focused around three planks: content, experience and platform. This model has been the first "transitional model" that could be incorporated into the entire enterprise that seems to work. And, as such, it has been widely adopted and used for the best results in organizations today.ExecutivesBut, looking at this from a strategy lens going forward -- I personally see a few shortcomings if this were to be adopted for a longer-term "transformational model." For example, it still asks executives to decide on which plank offers the best approaches to (outdated command-control) competitive advantage (see above).LeadersFurther, leaders and organizations will soon learn that segmentation into planks, while this works extremely well operationally through the linkages the model provides, can potentially cause strategic issues as the velocities of change in cycles mentioned may not allow enough time for company-wide governance and project/operational management to remain segmented in their decision-making; nor allow for siloed planks of decision-making and engagement between non-IT factions and IT-based factions.The business model is changing. Strategy today also needs to reexamine business modeling.Content_1983b5b2-ef0b-11e5-ab79-232f81186f3c4.1Experience_1983b684-ef0b-11e5-ab79-232f81186f3c4.2Platform_1983b74c-ef0b-11e5-ab79-232f81186f3c4.3ITDrive all facets of IT to the core culture._1983b828-ef0b-11e5-ab79-232f81186f3c4.4Business UnitsThe new model has to drive all facets of IT to the core culture, in my opinion, and it must no longer relegate such decisions to some "IT" siloed business unit.OrganizationAdopt new organic and neural network organizational approaches._1983b8fa-ef0b-11e5-ab79-232f81186f3c5Organizational approaches are changing. Organizational models that represent the command-control hierarchy, including charts that show: rank -- "who outranks whom" in the decision-making; policies and procedural manuals that are not used; definitions in detail of strict procedural governance and accountability; reliance on outmoded systemic feedback loops -- the outmoded linear processes and procedures cascaded throughout the hierarchy -- rather than updating to current non-linear communication and networked structures of collectivity and collaboration; detailed "rules of engagement" before anything can be done (usually scribed in stacks of boilerplate from legal) -- are being changed by new approaches today and from now on will be instead focused on the underlying organic and neural networks of the organization._1983b9e0-ef0b-11e5-ab79-232f81186f3cSharingAdapt to the new sharing culture._1983bae4-ef0b-11e5-ab79-232f81186f3c6Intellectual properties and cultures of secrecy are changing. Strategy today must explore whether (what, why and how) loose lips, still sink ships, as some form of sharing now predominates all societies on the planet. Those strategic decisions must also re-examine whether intellectual properties in seven-week product/service cycles still best serve the organization, and whether or not "need to know" cultures remain relevant in such a velocity of change. Over time, I believe all of these 20th Century power rules shaped around competitive advantage and profitability in a linear world, will need to be dramatically transformed for the sake of organizations and trade in the "new normal" world of the 21st Century._1983bbd4-ef0b-11e5-ab79-232f81186f3cStrategy ApproachesConsider new strategy approaches._1983bcc4-ef0b-11e5-ab79-232f81186f3c7So, as a strategy approach, what should an organization now explore? I am just a strategy consultant. There are many more brains at work on this. I would only say that remember, by the time their books are in print -- some of the information is already outmoded -- and almost always they are shaping their visions based on actual "transitioning" of outmoded "thinking" companies. They are only (like me) suggesting a vision of how this will ultimately "transform" strategy. Having said that, I find that at least three strategy concepts are on the right track for the 21st Century (of course, when I consult, I admittedly find the best custom solutions use parts of all three of these approaches):Blue Ocean StrategyExplore entirely new markets._1983bdc8-ef0b-11e5-ab79-232f81186f3c7.1W. Chan KimCreated by W. Chan Kim and Renée Mauborgne in the early '00's, Blue Ocean challenges the tenets of competitive strategy and calls for a shift in focus from competing to creating new market space and hence making the competition irrelevant. https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy/ Renée MauborgneBlue Ocean Strategy is one possibility... Blue Ocean's paradigm shift away from competitive advantage to exploring entirely new markets with entirely new R&D directions makes great sense today.DARPA StrategyFocus on the intersection of basic and applied research._1983beae-ef0b-11e5-ab79-232f81186f3c7.2DARPADARPA, created in 1958 by Dwight Eisenhower in response to the Russian threat assumed by the overflight of Sputnik, developed a strategy to formulate and execute advanced research and development projects formulated from little more than visions of the next 45 years to expand and explore frontiers that reach beyond the immediate solutions. https://www.fastcompany.com/1784731/regina-dugans-innovative-strategy-darpaDARPA Strategy is another possibility... DARPA's strategy centers on rethinking the engagement-scape away from traditional views of what constitutes a traditional scape to focus on the intersection of basic and applied research, while also on speeding up the time from blue-sky idea to delivery of product so that it better coincides with 21st Century product/service cycles. As the article link also states it also embraces collective and collaborative network-based crowdsourcing for both idea creation and manufacturing.Transient Advantage StrategyFocus on innovation strategies that continually build new advantages._1983bfb2-ef0b-11e5-ab79-232f81186f3c7.3Rita Gunther McGrathMcGrath from Columbia Business School also thinks it's time for most companies to give up their quest to attain strategy's 20th Century holy grail: "sustainable competitive advantage" as it no longer makes as much sense for organizations to defend. http://hbr.org/2013/06/transient-advantage/ar/1 Rita Gunther McGrath's Transient Advantage Strategy is a third possibility... Transient Advantage is an organizational strategy that accepts that competitive advantages are often short lived. It focuses on innovation strategies that continually build new advantages.2016-03-152016-03-20https://www.linkedin.com/pulse/strategy-engagement-scapes-changing-21st-century-altering-frank-sowaOwenAmburOwen.Ambur@verizon.net