In a recent Article, author Greg Satell describes strategy in a post-Digital world. Michael Porter positioned Competitive Advantage and dominating value chains as the foundation of strategy. Like many of our institutions and ideas, multiple forces are pushing that view into the dustbin of history. Two key forces are the shift to horizontal ecosystems versus vertical value chains, and technology cycles outpacing planning cycles. I have written extensively about Ecosystems and their impact on the value equation. Maximizing bargaining power among suppliers, customers, and new market entrants gives way to value-sharing scenarios where all participants in an ecosystem win.
The pace of science and technology is a force that changes everything. The convergence of these forces Transforms our World. Digital has been the story for almost two decades, but now, the story is shifting. In a different Post, Mr. Satell states that the next decade is about new computing architectures and advancements in areas like synthetic biology and materials science. These advances will reshape entire fields, such as healthcare, energy, and manufacturing. The time to prepare is now. How then do leaders think about strategy?
To that question, Mr. Satell makes a great point: if there is one thing that the Covid-19 crisis has shown is that if you don’t prepare, no amount of agility will save you. Preparing to dominate value chains fails, when the challenges of the future are too complex to go it alone. Collaboration lies at the heart of preparing, and strategy focused on an isolated organizational view must shift to Ecosystem Strategy. Here again, COVID-19 proves Instructive, as innovation has accelerated. The virus serves as a Catalyst for collaborative efforts.
I continue to say that prediction is impossible. I am a proponent of relentlessly rehearsing the future, not attempting to predict it. Mr. Satell links this belief to strategy, saying that it can’t depend on prediction. He states that we can prepare for this new era by widening and deepening connections throughout relevant ecosystems, acquiring new skills and focusing on solving meaningful problems. Ecosystems provide a platform for accelerated learning and those who can acquire a Return on Learning are poised to address these meaningful problems.
I believe the world will experience a Burst of Possibilities. However, unless we as humans can Unlearn, we are trapped in a way of thinking that undermines our ability to succeed. That applies to strategy as well. It is not a yearly process, a 3-year plan, or a static document. It is an iterative, relentless effort to learn, unlearn, rehearse, and prepare for the future. Along the way, some our our greatest societal challenges will be addressed.