This article, by John C. Camillus, was originally published in SBNonline.com, August 19, 2016.
In business, some problems are easy, some are hard, and some are so complex, intractable and threatening to organizations — or entire industries — that they are best described as "wicked." To the horror of managers, wicked scenarios, and the consequent wicked strategy problems that follow in their wake, are becoming increasingly commonplace.
To managers facing a wicked problem, it can feel as if the ground is shifting under their feet; all that is clear is that traditional solutions no longer work. The wicked scenario is made more difficult because the perceived problem keeps changing as different solutions are considered.
The perceived "problem" is unusual and substantially without precedent.
There are multiple stakeholders with conflicting values and priorities.
There are many apparent causes of the problem that are inextricably tangled.
It is impossible to be sure when you have the correct or best solution.
The understanding of what the "problem" is changes when reviewed in the context of alternative proposed solutions.
Problems possessing these characteristics are far from amenable to solution by traditional methods. The question then becomes — what approaches will work in the face of such wicked problems? Based on extensive study and consulting, I have determined how to construct "Wicked Strategies" as a means of coping with wicked problems.
​To develop Wicked Strategies, I propose a management system that is driven by the organization's identity— its core values, its enduring aspirations and its distinctive competencies; that employs a Modular Organizational Structure that enables transformation and embraces change and that emphasizes Feed-forward processes that create a desired future — rather than feedback which focuses on lessons from the past.
Wicked Strategies differ fundamentally from classic strategies. For instance, classic strategies endeavor to grow a business by seeking and selecting adjacencies that can be served by a core competency.
Wicked Strategies, by contrast, because they are responsive to disruptions, do not have the luxury of restricting growth to adjacencies. Instead of relying on a core competency Wicked Strategies would seek to constantly develop and add to the existing competencies of the organization.
Classic strategic analysis attempts to predict and respond to an expected future. Wicked Strategies recognize the futility of attempting predictions in the face of extreme uncertainty and attempt to create a desired future, reaching out to new arenas that can be cultivated by a dynamic array of inter-related competencies.
To provide a preliminary taste of what a Wicked Strategy might be, let's look at an example from a 30,000-foot vantage point. For instance, the difference between a Classic approach and a Wicked-Strategies approach to expanding into fast-growing, large, emerging economies, such as Brazil, China and India, is fundamental.
Focus primarily, if not solely, on economic value added.
Seek the potential synergy, or the mutual enhancement, of economic value and social benefit.
In a world of uncertainty and complexity, wicked problems abound. It is up to companies to create Wicked Strategies to respond to these unprecedented challenges.
John C. Camillus is the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh. He is the author of Wicked Strategies: How Companies Conquer Complexity and Confound Competitors and has served as consultant on strategic management to more than 100 organizations on four continents, including many Fortune 500 companies.
This article, by John C. Camillus, was originally published in youngupstarts.com and yoshi.today, July 21, 2016.
Complexity and uncertainty are the two fundamental challenges that stand between entrepreneurs and the economic viability of their organizations. In today's business environment, complexity and uncertainty stare us in the face and provoke paralysis in decision-making.
Traditionally, business owners and managers alike have dealt with complexity by trying to break problems down into smaller problems. But there are degrees and variations of complexity that are not readily amenable to deconstruction. Instead, in the face of what I call these "wicked problems," managers and leaders must pursue "Wicked Strategies" – and as I will explain momentarily, this demands a new approach to hiring, training, and performance assessment.
While Wicked Strategies have a number of crucial components, one of the keys is a "feed-forward" approach to planning. Feed-forward planning processes work from the future backward, as opposed to the classical, feedback approach, which seeks to draw lessons from the past.
Another critical key to implementing Wicked Strategies is the need for firms to define their identity. In a world that is constantly changing because of myriad forces, including globalization, innovation, and shared value, conventional ways of defining an organization are obsolete or have ephemeral meaning. The construct of identity is intended to capture and articulate what is core, enduring, and distinctive about the firm, and will illuminate and guide decision-making. I believe "values" are core, "aspirations" are enduring, and "competencies" are what make an organization distinctive. Together, values, aspirations and companies constitute an organization's identity, just as it can be argued to constitute a person's identity.
Recruitment practices have to ensure that the values of the personnel brought into your firm are aligned with its identity. A combination of recruiting the "best athlete" and of recruiting for specific capabilities to address identified weaknesses or lack of capability within the firm needs to be adopted. The human resource system should be designed to grow employees' capabilities, and so building on a "best athlete" base would be an advantage. At the same time, new competencies may be urgently demanded by new businesses that the firm is entering, which may mean recruiting personnel with specific knowledge and skills.
There has to be more than just a willingness on the part of employees to grow their capabilities. There must be a corresponding ongoing process in the firm to add to the knowledge and skills of employees, which supports new competencies that are required by the new businesses and new business models that the firm will constantly seek to develop. In companies such as Merrill Lynch Credit Corporation, which I studied in depth as part of a benchmarking exercise, managers valued the opportunity to develop new capabilities in anticipation of strategic initiatives and new businesses. The managers saw such development as increasing their worth and contribution to the company. Such a mindset and the flexibility that accompanies it need to be developed and supported. It is important because the dynamic modular structure that is the third component of the feed-forward framework requires that personnel be moved across units to transfer capabilities and develop a firm-wide perspective.
​Performance appraisal in a feed-forward context would be used more to support the growth and development of the employees rather than to reward and punish. Personnel whose actions and decisions affirm that their values are aligned with the firm's should be cherished and thoughtfully supported. Individuals whose performance falls short but whose values are aligned with those of the organization are supported and provided with development opportunities. By contrast, high performers whose values are not those of the corporation are candidates for outplacement, even if their performance is good. Values are at the core of the organization and behavior that is in conflict with espoused values should not be acceptable.
​Only with this approach to people issues can an organization effectively implement the Wicked Strategies today's wicked problems demand.
This article, by John C. Camillus, was originally published in HR.com, July 22, 2016.
In business, some problems are easy, some problems are hard, and some problems are so complex, so intractable, and so threatening to organizations – or entire industries – that they are best described as "wicked." Based on extensive study and consulting, I have determined how to devise "Wicked Strategies" that will successfully cope with these challenges – and even permit companies to profit from them.
I have also determined that the importance of the human resources function in enabling the effective implementation of Wicked Strategies cannot be overemphasized. After all, competencies reside in personnel. HR is responsible for ensuring that the firm possesses the competencies needed to succeed in new markets by recruiting or developing the right personnel.
The strategic importance of human resources was conveyed to me by Don Beall when he was the chairman and CEO of Rockwell Industries and had gained the reputation of being the most sought-after manager in the aerospace industry. When describing how he was transforming the company, he emphasized that Rockwell's VP of human resources was as much or more responsible for effecting the transformation of Rockwell as the VP of finance and strategic planning.
1. Fortify the firm's values. The firm has to ensure, to the fullest extent possible, that the values articulated in its identity are genuinely subscribed to by all employees. When recruiting personnel, a firm must make alignment with and commitment to its values an essential requirement.
2. Eschew layoffs. In normal circumstances, the only personnel that may be outplaced are those whose values turn out to be unaligned with the firm. Jeffrey Pfeffer's description of the negative impact of layoffs on the bottom line of the firm has been persuasively presented in both an academic article and in a Newsweek cover story. The impact on morale is deep and long lasting. Personnel remaining in the firm after others are laid off are known to experience survivor's guilt. Many "survivors" will seek to leave the firm for situations they expect will provide them with more security. And it is inevitable that those finding employment elsewhere will be the best of those that the firm has chosen to retain, resulting in a loss of important capabilities.
3. Ensure shared competencies. The firm has to ensure that competencies are shared across the organization. GE and Rockwell Industries, for instance, are known to transfer personnel from high-tech growth units to less innovative and stable units to rejuvenate them. Sharp Corporation grew and prospered by leveraging counter-conventional niche technologies, and by engaging in a process that the company calls "chemicalization." This involved moving the top three per cent of researchers to new departments every year. Sharp also engaged in the practice, alien to most Japanese companies, of adding talent drawn from other companies at all levels of the organization, in addition to developing its existing personnel.
Only with the support of human resources can an organization effectively implement the Wicked Strategies for today's wicked problems demand.
About the Author: John C. Camillus is the author of WICKED STRATEGIES: How Companies Conquer Complexity And Confound Competitors (Rotman – UTP Publishing), and the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh. He has served as consultant on strategic management to over 100 organizations on four continents, including many Fortune 500 companies.
This article, by John C. Camillus, was originally posted on CMSWire.com, July 22, 2016.
​Companies embarking on globalization are thrust literally and metaphorically into a world of uncertainty and complexity.
When the power and priorities of multiple and diverse stakeholders interact with the complexities and uncertainties of globalization, the result is a recipe for decision paralysis.
Not only does the firm's future become difficult to predict, but also the extreme uncertainty and complexity that accompany globalization, when compounded by the different perspectives and priorities of diverse stakeholders, may lead to a chaotic ambiguity where the future is not only unpredictable but essentially unknowable.
Unknowable futures are the reason why firms that employ the best of the traditional planning processes and analytical techniques are sometimes unable to gain any traction.
Traditional tools of strategic analysis are designed to understand and predict competitive industry environments (e.g., five-forces analysis) or develop differentiation maneuvers for an anticipated future (e.g., generic value chains linked with customers' or supplier's chains). However, they are patently unsuited for and utterly helpless to deal with an unknowable future.
Additional approaches also fall short.
​Conducting strategic planning exercises more frequently, requiring additional analysis, separating strategic thinking from action planning, or using carefully developed return on investment (ROI) projections as a basis for selecting strategies are of little worth when challenged by this degree of uncertainty and complexity.
Unknowable futures are no less unambiguous when subjected to more frequent traditional analyses.
A greater degree of analysis is a waste of time and effort if it is predicated on incorrect or questionable assumptions.
Understanding the implications and the implementation challenges of new strategies are next to impossible without simultaneously exploring the feasibility of actions required to fulfil the strategy.
Faced with the probability of incorrect assumptions, unanticipated developments, and undeveloped action plans, employing ROI projections as the criterion for selecting an optimum strategy is dysfunctional at worst and an exercise in futility at best.
What, then, can an organization do in the face of an unknowable future?
A couple of decades ago, in my consulting, I became aware of the ineffectiveness of then available techniques that were intended to delineate or deal with an anticipated future.
I started searching for, researching, designing, and documenting planning processes that could better manage an unknowable future. The result was an article I co-authored with Dr. William Gilmore that deconstructed what we categorized as "wicked" problems, and we recommended processes and techniques that would, we believed, be responsive to these issues.
These processes and techniques are better informed now by the multi-year, multi-country research projects and extensive consulting I have done with more than 100 organizations, ranging from Fortune 500 companies to theological seminaries.
A key component of these processes is a "feed-forward" approach to planning and control.
Feed-forward-based planning and control processes work from the future backward, as opposed to the classical, feedback approach, which seeks to draw lessons from the past.
Feed-forward is an important and powerful approach to meeting the challenge of wicked problems. Traditional planning and control systems rely substantially on feedback — which means learning from experience and analyzing actual performance in relation to planned performance.
Disruptive technologies and wicked problems delink the future from the past, making traditional systems inadequate. The new models that result from co-creation of value could make the disconnection even greater.
Feed-forward processes and techniques address the disconnect that exists from the past by guiding management in making choices today by working back from an anticipated or desired future, without necessarily relying on past experience.
Feedback is basically an exercise in remediation: correcting, learning from, and improving upon performance in an existing business.
Feed-forward focuses on fashioning a future — a future that may be unrelated to the past — that the firm wishes to see happen.
Feedback essentially involves performance appraisal and learning, while feed-forward focuses on managing uncertainty and an unknowable future.
Feedback-oriented systems engage in episodic reviews of performance at specified intervals of time — say, monthly, quarterly or yearly, while feed-forward-oriented systems trigger analysis whenever assumptions that have been made appear to be mistaken and new issues are spotted.
Feedback employs databases that collect historical data, while feed-forward works with information and insights derived from possible future scenarios. In short, feedback analyzes the past and feed-forward strives to envision and realize a desired future.
It is important to emphasize that feed-forward often requires a leap of faith. The business model will have to assume cause–effect relationships that have yet to be demonstrated or proven.
It would be unreasonable to expect that every such cause-effect assumption will prove to be valid. Setbacks and failures will occur. Managers and especially the C-suite need to be prepared to take these failures in stride but to also examine whether the logic underlying the assumptions of cause–effect relationships is sound.
Managers, paradoxically, have to commit to an untested cause-effect model to the extent of investing resources and unreserved effort into making it work, but at the same time be actively examining if the cause-effect model is valid.
​This is difficult to do, though utterly necessary. Some years ago, when I had the occasion to speak with the top management of Fujitsu, I asked them how and when they determined that a strategic initiative or major project was a failure.
They patiently explained that my question had no meaning in the Fujitsu context. In Fujitsu, when initiatives or projects did not progress as planned, management's focus was on what needed to be done differently, not on labeling the initiative and the responsible managers as failures.
Similarly, in a feed-forward context, well-planned and thoughtfully implemented initiatives are experiments that provide a better understanding of cause–effect relationships and underlying assumptions.
Feed-forward is inherently inclined to render existing value propositions and business models obsolete.
This is not a bad thing if the firm at the same time strives to keep the existing business going until it is evident that the emerging business model dominates. A flexible and dynamic approach to the firm's organizational structure will be needed to execute this complex balancing act well.
About the Author: John C. Camillus is the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh and the author of Wicked Strategies: How Companies Conquer Complexity and Confound Competitors (Rotman – UTP Publishing).
This article, by John C. Camillus, was originally published on TriplePundit.com, August 3, 2016.
​John C. Camillus is the author of "WICKED STRATEGIES: How Companies Conquer Complexity And Confound Competitors" (Rotman – UTP Publishing), and the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh. He has served as consultant on strategic management to over 100 organizations on four continents, including many Fortune 500 companies.