A firm’s Identity – its core values, enduring aspirations and distinctive competencies – is intended to guide management’s decision making. This article discusses the effective methodologies for translating the values, aspirations and competencies embodied in a firm’s Identity into a decision framework.
Many businesses today find themselves in situations where industries are converging, disintermediating, transforming and dying. Products are ephemeral, markets are transient, and technology is dynamic. Organisation boundaries are unclear and consciously made permeable. Businesses are now facing problems that are so complex, intractable, and threatening to organisations – or entire industries – that they are best described as “wicked”. To the fascination and horror of managers, wicked scenarios are becoming increasingly commonplace.
Wicked problems are different and substantially without precedent. They involve multiple significant stakeholders with conflicting values and priorities. There are many apparent causes of the problem and they are inextricably tangled. It’s impossible to be sure when one has the “right answer” to deal with a wicked problem.
Managers facing wicked problems often lose their strategic bearings. Their long-held strategic vantage points and strategic foundations now rest on quicksand. Conventional strategic analysis seeks to develop “strategy” as the construct or mechanism that harmonises the organisation with its environment. Important tools of strategic analysis focus on the industry in which the business operates. But, for example, to what industry does the ubiquitous “cell phone” belong? Is a “cell phone” a phone, a voice recorder, a messaging system, a GPS device, a data storage device, a music player, a video player, a remote security monitor, a calculator, an organiser, a camera, a video recorder, a mobile internet access device or something else? If you can’t specify the industry how do you conduct a traditional five-forces analysis? And when the organisation’s products are obsolescent, markets are transforming, and disruptive technologies are taking over, how does one conduct a value chain analysis?
So, how can managers caught in this crucible of mutating environments, unsettled organisations, and wicked problems confidently and effectively approach the task of strategy making and strategy implementation? In my book, Wicked Strategies, I develop a framework for creating Wicked Strategies that can handle wicked problems. This framework is comprised of three components. One component is a dynamic Modular Organisation Structure that motivates and embraces transformation. A second component is Feed-Forward – processes that support visioning, and develop and analyse possibility scenarios to identify robust actions and enable a real-options approach. The third and most important component is the organisation’s Identity. It is the question of organisational identity, and its fundamentally important strategic implications, that I will address here.
In the challenging world of mutating environments and wicked problems, the organisation’s Identity should be designed to serve as a touchstone for strategic decision-making. It should provide stability and consistency of purpose and perspective in the midst of ambiguity and even chaos. It should articulate a vision, and offer a roadmap and compass that guides the organisation toward realisation of the vision. The need for firms to define such an Identity is beyond compelling – it is an absolute necessity.