Strategy and Practice 3 - Living Strategy

Strategy and Relationships

• Organizations can learn
• Organizations have multiple influential layers - employee, team, division
• Organizations past present and future are interwoven
• Organizations are greater than the sum of their parts

Knowledge society - learning organisations, Strategic Stories, Communities of Practice, Social Capital, Networked Organizations are all themes

Knowledge society

De Gues believe that the world has moved away from capital requirements to knowledge requirements - asset poor knowledge rich companies like Consultants

Four stages of the cycle towards the knowledge company

• Perceiving - change of govt ot interest rates
• Embedding - understanding it in relation to the business world
• Concluding - What if's
• Acting - The change or action resulting

Learning can be done by Assimilating the information into existing structures or Accommodation - changing the structures or the basis of the information

Assimilation can be mechanical and predetermined whereas Accommodation can be infinite

e.g. International banking has gone away from the mass adoption of automated services towards those based upon the transaction and trying to play the relationship card. HSBC - the World's local bank

Strategic Stories

Communities of Practice

Social Capital

Networked Organizations

The Emergent Nature of Strategy

The Resource Based View focuses on

• Physical resources
• Financial resources
• Human resources
• Organizational resources

When networked together they enable a Competitive Advantage

Helming

There is a need for multi-rational or janus-faced approach. That is, the stratgeist cannot engineer the waves but can guide the company through the storm. The CEO can no longer be the strategist but can trellis and prune strategies into shape. Strategists need to acknowledge the past and move towards developing new strategies. That is away from Best Practice towards good practice, spotting, developing and promising practices as they emerge

Bibliography

• Brown Duguid - Organization learning and Communities of Practice
• Evans Wurster - Communities of Practice
• Evans Wurster Strategy and the new economics of information
  • All businesses are about information
  • Hyperarchies - like the web multiple connections (deconstruction of tradtional value chain) and exchanging information
  • The trade off between the Richness an Reach of Information and how much it can be customized
  • switching costs will drop
  • Trust will be key - New Branding opportunities
• Nonaka Knowledge Creating Company
• Krackhardt, Hanson Informal Networks
  • Organizational structure - managers find do not work - success lies in informal networks
  • Build on the informal networks where it works
  • The (advice) (trust) networks uncovers the prominent players, trust is increased - helps rewire faulty networks
• Shaw How 3m is rewiring Business Planning
• Wenger Snyder Communities of Practice

See Also Strategy as Organizing and Strategy as Orchestrating Knowledge and Strategic Thinking

Orgainizations should be seen as organisms that can learn not machines that are programmed

• Organizations are subject to many levels of influence
• The organization's past present and future are interwoven
• Organizations are greater than the sum of their parts

This has led to the acknowldgement of Knowledge Society with the need for learning organizations, strategic story-telling, communities of practice, social capital and the notion of a networked society

The Systems Thinking reflects and acts upon the big picture

• See inter-relationships and processes not things and snapshots
• identifying things that have a big impact and those that do not
• focus on leveraging the 20% that generates the 80%
• Look beyond quick fixes

De Geus in the Living Company explains that society has move away from requiring business capital to one requiring Social Capital based upon knowledge. Thus asset poor knowledge rich companies such as consultancies The Learning company is:

• Sensitive to the external environment
• has cohesion and identity
• has tolerance and decentralization
• conservative financing

De Geus has the cycle of learning comprising 4 parts

• Perceiving - change in governent, or interest rates
• Embedding recalibrating thoughts in response to the change
• Concluding asking what-if
• acting - The change or action that results

The learning process can happen by accommodation - change ones internal structure to meet the changes environment - banks looking like shops or assimilation assimilating and choosing the structures that best suit the event. Assimiliation can be very mechanistic but accommodation can be infinite

Management by storying around

Three Anecdotes and 3M are examples of Strategic Narratives

Communities of Practice

Communities of Practice, Social Capital Networked Organizations

The emergent nature of stratgey

using the Resource Based View are networked together to ensure effective operations these can lead to capabilities that are superior to other organizations and where Best Practice is not enough

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