Master Class in Strategy:
This course draws heavily on the on the new book Beyond Crisis: Achieving Renewal
in a Turbulent World. (John Wiley 2010)
Here you will find an a summary of the book that explains the model in which the
course is based.
Summary:
The world enjoyed very unusual conditions during the so-called Great Moderation.
Interest rates and inflation were at historical lows, global political disputes appeared
to be resolving themselves and the world's work force doubled. Science and
technology rained down new possibilities, and the future appeared unbounded.
Organisations responded in ways that suited the times. They cut costs, outsourced
activities and focused on what they did best. Asset prices soared to levels which
made a large number of people in the industrial world feel rich, and able to borrow.
Consumers borrowed as never before. Employment remained high, inflation low and
even the Internet bubble was unable to dislodge the underlying confidence in the
economic model.
This period is not going to return. The business model that underpinned
organisational behaviour is also obsolete. In its place, there is an anxiousness, a
frantic pulling on the levers that used to work and a universal malaise. Beyond
Crisis offers a diagnosis of this problem and a solution to it.
Overview
The Great Moderation enveloped us with a period of false tranquillity, finally
dispelled by the financial crisis. The world ahead of us will be very different, fastmoving and innately challenging.
The Great Moderation concealed an important trend. This concerns the style with
which many large organisations were managed. This style is not so much obsolete
as irrelevant and a distraction from to the issues which most organisations face. It
will still need to run in the background, but supplemented by a huge change of
emphasis.
The orthodoxy of the pre-crisis world held that everything that could be delegated
beyond the bounds of an organisation should be; and that what remained when this
was complete should focus on uniformity, on reducing its costs and bureaucratising
its processes.
Organisations pursued these goals through increasingly generic procedures and so,
inadvertently, became increasingly similar to their peers in cost profile, customer
offer and internal organisation. In the case of commerce, this situation leads to
what called 'commoditisation'. One of the consequences of commoditisation is
evaporating profits. However, this reductionist management style fossilises the
organisation, and greatly weakens its capacity to renew itself.
The world will not return to the conditions of the Great Moderation. Very fast change
is upon us. We turn, therefore, to the responses that organisations can make to
this. At the centre of any viable response lies the idea of renewal, the continued
change within the portfolios of activity that the organisation undertakes. This
change affects what it does, how it does it, why it does it and for whom.
The deep roots of renewal
Renewal has to satisfy a range of requirements. It must be coherent, in the sense
that the organisation remains a rational whole, or becomes an even more rational
whole, as renewal proceeds. This rationality has to answer to two deep sources of
insight:
First, it must respond to the nature of the external environment - that is, to
everything from competition to customers, regulators and voters. Rationality
emerges from the application of Insight, which is the first of five key qualities which
we are going to advance.
Second, renewal is a journey that has to go where the organisation "wants" to go.
This seemingly obvious statement conceals many complications. For example, how
does it know what it wants? What is actually practical and possible? What, and
judged by which criteria, is the "best" kind of destination: what it wants, or
something else?
Renewal is a demanding requirement on any organisation. In addition to doing what
maintains its current position, it also has to divert resource to undertake tasks
which, of their very nature, are uncertain and unknowable.
The source of renewal: productivity, innovation
Many organisations rely upon spontaneous ideas, happy propinquity, acquisition and
outside assistance to generate renewal. Ideas are thought to be so plentiful that
they can be scattered like seed.
In the world in prospect, however, renewal cannot be left to chance. It has to be as
professional as any other process in the organisation; indeed, as it is leading the
charge, it has to be the strongest element.
Organisations access an enormous body of knowledge. Attempts to systematise this
have not been hugely successful, as measured by contribution to renewal and
output. Rather, what is needed is a form of organisation that clarifies Insight into
what matters, Values around what the organisation "wants" to do, Options that
reflect practical possibilities and absolute imperatives that impose themselves on
the organisation.
Good ideas do not "just happen", or not very frequently. Organisations have spent
decades cutting their costs and inadvertently making themselves more and more
like their peers. Renewal reverses this process, making organisations uniquely fitted
to their niche, and resilient when that niche undergoes change.
We now introduce a new term: the Purposeful Self-Renewing Organisation, or PSRO.
The PS-RO is continually and actively changing its nature. It is doing this in order to
meet anticipated conditions.
The PS-RO model defines the broad shape of the organisation that is fitted succeed
in the turbulent, fast-flowing river of change. The book and the course are
concerned with the details of the PS-RO, and the tools that you can apply in building
one.
Almost by the definition of renewal, there can be no single correct form for a PS-RO.
Anything which is remotely generic is immediately susceptible to commoditisation,
to being made out of date. The PS-RO permanently strives to adapt itself to its
precise circumstances, which are unlike those of any other organisation.
How is all of this to be put in place? Curiously, implementation is relatively easy
once the understanding is in place as to what needs to be done. This book/course
offers you precisely such a perspective. We cannot, however, offer a more detailed
blueprint, both for the reasons already offered – that there is no one right answer,
except for this particular organisation within the context of its current circumstances
- and also because matters do not stand still. There will be times when technology
changes rapidly, or perhaps when stakeholders are particularly demanding. Your
structure - your Machinery - will need to shift its focus in order to accommodate
this. In the same way that education teaches us how to think as much as what to
think, this book is intended to show how to organise for a Purposeful Self-Renewing
Organisation.
What’s our authority to do this? Why listen to us?
Between us, the authors have over 100 years of experience, working as senior
managers in multinationals, and as consultants to major corporations, governmental
departments and third sector organisations. We have worked with hundreds of
organisations across the world, enabling them. You will see that we use many
examples and case studies; most of them come from our direct experience.
In this book/course we demonstrate how the future organisation will work and why
this will be successful. Every organisation is different, however, and there is no
single, generic solution. But we do know that to be successful, a PS-RO will need to
have five qualities: Values, Insight, Options, Narrative and Machinery. To that end,
we provide a tool kit which provides you with the necessary tools to create your own
PS-RO.
We believe that the future need not be overwhelmingly daunting; ‘getting the job
done’ can be challenging, stimulating, inspiring, rewarding and enjoyable. PS-RO
staff are respected and responsible, informed and insightful, exhibiting qualities of
confidence and leadership that lead to long term success – and, crucially,
profitability.
Finally, to create your own PS-RO we do not ask you to establish planning groups or
other cost centres because we believe that the wisdom of the organisation must be
tapped directly. What is needed are long, purposeful conversations, backed by
insight into which everyone with something to say has their voice. Then you will see
renewal: establishing clarity, hunting out useful ideas and capabilities, creating
options for the future and exploiting new abilities for the present. As you can see
this goes beyond traditional strategic planning; what we envision is the desire - and
the will - to create an environment which encourages and enables a whole
organisation to take charge of its destiny.
We hope that you enjoy reading Beyond Crisis, and/or attending our Master Class in
Stragety.