Practical Experience And These Approaches Business Essay
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Difference between analytical/Planned and emergent approaches. We explore the differences among the concepts of Analytical and emergent strategy. Critics challenged the traditional analytical-approach - impossibility of forecasting, introduces emergent approach. Strategic planning no more remains a ritual where future is assumed to remain more-or-less similar (Grant, 2003).
Planned strategy requires clearly articulated vision and associated plans, presence of formal controls to impose them, in a stable totally predictable/controllable environment (Mintzberg and Waters, 1985). We can argue the three characteristics of a planned approach as - a) precise mission of the firm, articulated to its staff in an unambiguous manner, e.g. become the market-leader in the cloud-computing domain in next 5years, b) existence of a shared organisational intention among the staff at all level, e.g. meet the CMMi ML-5 or Six-sigma quality standards in all deliverables, c) these collective-intentions must be realized irrespective of any environmental [external] forces, e.g. Tata-group places quality above all other aspects, often at the expense of profit. In planned strategy, leadership, devices a plan, articulates it precisely and strives for its implementation in a surprise-free environment; external-factors are not considered for any distortion of this plan. It is non-responsive to external-factors e.g. newer technology, change in customer-choice, government policy change etc. Though this could be applicable to Army, but surely not in modern business-environment. Does an organisation could have a totally predictable/controllable business-environment? No, referring to Shell oil-spill in Bonga oilfield, BP Deepwater-horizon oilspill in Gulf of Mexico, the financial turmoil in US during 2010 affecting business [both financial and IT domain]. Referring to the recent incidents of Boeing-Dreamliner [787-series aircrafts] which has been grounded worldwide, short after its much hyped-release, due to major technical problems. Concluding, firms normally have almost none or little control over the environment where it operates and hence 'purely' analytical approach is not advisable.
Vision could provide a holistic view of firm's direction, with room for adaptation, i.e. the ultimate vision could emerge during the journey itself Mintzberg and Waters (ibid). In an emergent approach feedback is welcome on past actions, opportunities and threat and thus firm's vision can be re-developed considering all these factors en-route. Flexibility to external factors and adaptation to turn the threats into opportunities are pivotal in emergent approach. We can consider this as an bottom-up approach, a necessary component of the strategic planning process, as it ensures that information from all parts of the organization is included in the decision-making process (Plant, 2006). We can refer to matrix project based organisation structure (Brooks, 2009) in this context where information flows freely and decision is taken considering all inputs. Transformational leadership can nurture such an environment from where strategies could emerge, e.g. leadership [captaincy] in a football or cricket match- with the common vision [win the match] leader need to formulate strategy based on the ground-situation which is totally unpredictable and uncontrollable [e.g. an injury of a key-player, rain, wind].
Formal plans, precise intention, centralised leadership in a controllable and predictable environment where as emergent is adaptable to new threats/opportunities, shared beliefs, collected vision and respondent to external inputs. We can refer to Gump's success in life in the movie Forrest Gump as emergent style. For a deliberate approach become successful the business environment, must be perfectly predictable and/or under the full control of the firm Mintzberg and Waters (ibid). Analytical/planned assumes a controllable/predictive environment which is almost impossible to have in recent high-tech, turbulent, boundary-less business environment. In an emergent approach the actions need to be consistent over time Mintzberg and Waters (ibid). But these are two extremities; pragmatic approach should be in between these. The presence of feedback (Roger, 1996) and the continuous strategy-formulation via learning - is two key aspects in my view of emergent approach over deliberate one. Often emergent approach is perceived by many that management is out of control; instead it establishes a feedback loop, a matrix structure which is open, flexible and a responsive learning organisation. This maturity to react to external factors makes emergent approach the advantage. But too much emergent can bring trouble on the other hand.
Practical experience and these approaches
I was working with a MNC-Bank in Benelux region, local government has mandated them to implement stringent security-measures to enhance its risk-exposure after the credit-crisis in 2010. Our vision was at very high-level and the threats/opportunities were unknown, as we progress down the program we take input from our environments [e.g. government regulatory bodies, Bank's staff, industry best-practices] and formulate the path to implement the vision during the journey. Had we chose an analytical approach it would have failed - as we did not have any hint on the external factors [what measures we need to implement, what are the external security threats, what are the significant Bank assets that needed security etc] and unpredictability of ground situation. We were challenged by both external factor [like government regulation, cyber attack] and internal factors [legacy of the departments, preparedness of the Bank staff, apprehension over possible lay-off etc] . planned approach perceived by the staff as imposed as there is less chance for feedback and re-formulate the strategy but only strong adherence to that planned tasks, in our environment [the MNC Bank, our customer] that won't work, we needed to motivate the staff and persuade them assuring that these measures won't affect them in any way. Once this sensemaking was done, their feedback was taken, workshops arranged to brainstorm on the challenges and we collectively turned those threats into opportunity and our programme was endeared by staff and once we had a motivated workforce rest was easier. It was also for us a learning experience as the concept of emergent approach opens the possibility of strategy formation by learning process, Mintzberg and Waters (ibid). Such a learning behavior is especially important when an environment is too unstable/complex to comprehend, or too hard to predict- as was the case with the Bank, stakeholders were - four vendors, mandating government-organisation, six internal-departments spread across two countries and competing with each other. Emerging approach, we took helped us to enhance our understanding of the situation over-time and to respond to an evolving reality, Mintzberg and Waters (ibid).
Analysis of Benefits
Pragmatic strategy-development need to combine both deliberate, and emergent approaches, Mintzberg and Waters (ibid) at first leadership need to establish a vision to direct its staff and a path to realize the same, at the same time it is highly important that strategy responds to the external factors during the journey. We can conclude that the emphasis may change from time-to-time based on situation demand but both are needed to succeed. It depends on the situation and business-domain too. An umbrella-approach, devised based on the ground-situation, which is partially deliberate and partly emergent, is the ideal to follow.
In a manufacturing unit [e.g. steel, car, aircraft] or in Banking/Insurance domain the planned/analytical approach would be successful - as they operate in Bureaucratic structure (Brooks, 2009) where Standard Operating Procedures are followed religiously with little scope of innovation. So are the government firms, hospitals [to some extent] and sports organisation. Once planned people unquestionable follow the instructions and stringent control implemented to realize the pre-defined path. Monopoly business [former Nokia, Blackberry over mobile market, IBM and its mainframe, Microsoft and its windows] could be a good place for successful deliberate approach implementation because the firms have to some extent control over their environment [market] and they are not challenged aggressively by external factors [e.g. Nokia until HTC, Samsung flooded the mobile market]. In Army/Police departments could follow deliberate [planned] strategy - but during the actual war-field they need to utilize the feedback loop and change tactics based on ground-situation.
Emergent approach, which is being developed over time in collaboration with and accommodating the changing reality, it is a front-line approach, tends to solve actual issues
In the modern volatile, fast-moving, boundary-less market, firms need to be more agile to obtain the competitive-edge over competitors, this makes emergent approach more pragmatic and beneficial in a slow-growth market too. We can view emergent strategy as a set of actions, or behavior, consistent over time Mintzberg and Waters (ibid). in the traditional deliberate approach idea was generated by individual [or a few leaders at the top-most rank] - whereas in emergent it 'emerges' en-route, collective ideas surely would be better than a single-one. Front-line staff and middle-managers who can spot a threat early [being close to production-line/customer] and swiftly react on that [to turn it to an opportunity] - this enables the firm to withstand the threat- this is paramount in emergent approach (Moore, 2011).
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