Strategy As An Ever-Changing Algorithm

Neil Perkin and Peter Abraham

"Everybody has a plan until they get punched in the face."Mike Tyson

If we think about strategy as an ever-evolving algorithm, then the rules or guidelines that we set should help us to navigate the terrain that we need to cross. Just as algorithms constantly change to take account of new inputs, so a strategy should be emergent, constantly taking account of new contexts and what data and insight is telling us in order to find the path to the optimal solution. Google updates the search algorithm hundreds of times a year but periodically undergoes a major overhaul that impacts how it works in more fundamental ways, in the same way that strategies continuously morph but periodically need a significant correction to keep us on track when we are in danger of getting thrown off-course.

While rigid, top-down strategy is the more traditional domain, the requirement in the agile business is both to set the strategy in such a way that it can evolve utilizing a continuous stream of insight, data and feedback from customer facing teams, and in an environment of increasingly transient competitive advantage to be ready to disengage and refocus, even when the business is still viable. As Rita Gunther McGrath describes it:

One of the most significant differences between the assumption of sustainable competitive advantage and more dynamic strategy is that …

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"It is an important and popular fact that things are not always what they seem. For instance, on the planet Earth, man had always assumed that he was more intelligent than dolphins because he had achieved so much -- the wheel, New York, wars and so on -- whilst all the dolphins had ever done was muck about in the water having a good time. But conversely, the dolphins had always believed that they were far more intelligent than man -- for precisely the same reasons."

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