Traditional approaches don't work: Is it time to rethink our approach to strategic thinking?

Strategic thinking isn't just about setting a direction, it's about choosing paths that allow us to adapt and gain advantage amidst uncertainty. As Heinz von Foerster advises, "I shall act always to increase the total number of choices." This philosophy is invaluable today when resilience and flexibility are essential.

Increasing options offers flexibility and builds a more adaptive and resilient organisation. Expanding the range of possibilities avoids locking ourselves into rigid structures and fixed outcomes. Instead, we foster an environment where options evolve alongside circumstances.

As Col. John Boyd observed, "It's a biological imperative for an entity to improve its capacity for free and independent action." This insight aligns closely with von Foerster's principle, underscoring the importance of enabling individuals and organisations to act independently and adapt to evolving circumstances. To remain relevant and resilient, an organisation must continuously expand its capacity for choice and action, ensuring it can respond freely to environmental shifts.

Traditional strategy vs. Adaptive strategy

Many organisations cling to traditional strategies that assume stability and predictability. The same tired formula is predictable: What is our 'why' and what are our behaviours? What are our goals? Let's go ahead and tell everyone. But in reality, markets shift, regulations change, and new technologies disrupt the status quo. The linear, rigid approach of traditional strategy is increasingly ill-suited for such a volatile world. Three flawed assumptions underlie this outdated model:

1. Environmental stability: Traditional models assume the environment will remain stable enough to execute a long-term plan. Today's environment, however, is marked by constant turbulence and chance events.
2. Complete information: Traditional strategies rely on gathering data to predict outcomes. However, in a complex environment, information is rarely complete; unknowns are the norm, and insights change rapidly.
3. Linear execution: Strategy is executed as a straight path that aligns with a perfect Gantt chart. Yet, as you execute, your actions will interact with the external environment, causing competitors, customers, and regulators to adapt, creating a constantly shifting landscape.

In this context, a rigid approach leaves organisations vulnerable with limited choices, unable to pivot when market shifts occur or leverage emerging opportunities. What we need to explore is how we change our fit with the environment to our advantage.

Embracing emergent strategy

In contrast, emergent strategy thrives on flexibility, treating strategy as an adaptive, iterative process. Instead of a static plan, an emergent strategy involves constant reassessment based on environmental feedback. This doesn't mean abandoning planning; it means building a plan that evolves with each new development.

Leaders who adopt emergent strategies understand adaptability is as crucial as the initial direction. They know that strategy unfolds in response to real-world events and that rigidly following a blueprint is risky. Instead, they continuously shape their approach based on real-time feedback, strengthening their organisation's ability to navigate their intent.

The levels of strategic thinking in complexity

Emergent strategy requires a different level of strategic thinking. Moving from traditional static assumptions to a more comprehensive understanding of external dynamics involves three distinct levels of thinking, each unlocking greater adaptability and resilience in the strategy development process.

Level 1: No other actors, just internally focused – The illusion of stability

At this level, strategy development assumes a stable environment; only you exist in the environment, and it will remain passive as we execute our plans, and thinking turns internal. Traditional strategic approaches often sit here, assuming the world will hold still long enough for detailed plans to be fully realised. Yet, the world is anything but static: competitors advance, market demands shift, and regulations evolve. Relying on this illusion leads to strategies that quickly fall apart on execution or become outdated.

• Key takeaway: Abandon the notion of a passive, unchanging environment. Instead, prepare for continuous adjustments, recognising that every plan must adapt to survive turbulence.

Level 2: Other actors identified – Navigating dynamic relationships

This level acknowledges that strategy is not a solo endeavour; it's relational, shaped by interactions with external forces, such as competitors, customers, regulators, and other stakeholders. Here, organisations begin to see strategy as a dynamic process that must adapt as other entities react. For instance, new regulations might reshape market dynamics, or a competitor's innovation could transform customer expectations. This level requires ongoing engagement with the external environment and recognises these relationships' active role in shaping outcomes.

• Key takeaway: Regularly scan and respond to changes in the environment. Strategy is no longer a one-time plan but an evolving process shaped by the actions and reactions of external partners.

Level 3: Multiple Couplings – Embracing the full complexity

At the highest level, strategy transcends individual relationships and considers the entire ecosystem, a web of interdependent actors where each connection influences the others. Leaders who operate at this level see the organisation as part of a complex, adaptive system shaped by interconnected relationships with customers, suppliers, regulators, and broader societal trends. This approach doesn't just respond to immediate actors; it recognises the cumulative effects of all interactions and aims to adapt within this broader system.

• Key takeaway: Use tools like ecosystem modelling and frameworks such as the OODA loop (Observe, Orient, Decide, Act) to navigate these interconnected relationships. A complexity mindset fosters resilience and prepares organisations to adapt to trends as they unfold, building a strategy that thrives on flexibility and insight.

As a leadership team progresses through these levels of thinking, it requires a good level of shared consciousness, strategic sensitivity, an acceptance of perspectives, and the reality that there will always be limited or unknown information.

Structural Coupling: The dance with the environment

A concept central to emergent strategy and higher-level strategic thinking is structural coupling, the idea that organisations continuously co-evolve with their environment. This interplay between an organisation and external forces influences outcomes in real-time. Unlike traditional strategies that overlook these dynamic interactions, structural coupling sees strategy as a fluid, evolving relationship. Leaders should map and remap relationships with customers, competitors, and regulators to stay aligned with shifting realities.

Instead of treating strategy as a one-time decision, leaders should view it as an ongoing process of adjustment, where every action influences and is influenced by the broader ecosystem.

Autopoiesis: Building Self-adapting Organisations

Another critical element of an adaptive strategy is autopoiesis, the concept that organisations must evolve continuously to thrive. Traditional models assume that change can be managed incrementally, but change is continuous and disruptive in today's world. Leaders must build self-adapting systems rather than waiting for the following annual strategy review.

This means fostering decentralised decision-making, creating rapid feedback loops, and enabling teams to respond to emerging information. Autopoietic organisations are self-adapting, making them more resilient and better equipped to deal with complex and volatile environments.

The Wisdom of Sun Tzu: Adapt Like Water

Sun Tzu wisely observed, "Water shapes its course according to the nature of the ground over which it flows." This powerful metaphor reminds us that strategy should adapt to its surroundings. Flexibility, rather than rigidity, is the foundation of long-term success. Just as water finds its path around obstacles, the strategy must adjust as it encounters new challenges or opportunities.

Embracing this wisdom requires leaders to stop clinging to static plans and vague visions. Instead, they must create strategies that flow and adapt, responding dynamically to each twist in the landscape.

Traditional strategies that assume stability and control no longer serve today's organisations. Leaders who seek to shape the external environment to their advantage must embrace an adaptive, emergent approach to strategy that values flexibility, interaction, and continuous learning. Instead of trying to control every outcome, they must understand that strategy is an evolving journey shaped by dynamic relationships and responses.

Key Takeaways for Leaders

• Embrace Emergent Strategy: Move away from rigid roadmaps and allow strategy to evolve through environmental interaction.
• Understand Structural Couplings: Recognise your organisation's interdependence with the broader ecosystem and adjust strategy accordingly.
• Build for Self-Adaptation: Enable decentralised decision-making and foster an environment where teams can pivot in real time.
• Act decisively with the OODA Loop: Use the OODA loop to continuously observe, orient, decide, and act, maintaining momentum in a fast-paced world.

Time to Rethink Strategy

In a world where change is the only constant, strategic success requires leaders to rethink traditional approaches, embrace emergent strategies, and recognise the dynamic relationships in complex ecosystems.

How do you approach decision-making in a way that maximises choices for the future?

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