Strategy Management – the new normal (2)

So, if we all agree that we are witnessing a new normal in strategy management, the question has to be: how do we deal with the new normal?

However, before discussing solutions to the new-normal enigma, we explore below the peculiarities of this new strategy paradigm This particular blog shall also discuss real life examples of nations, companies, and citizens that have stumbled when faced with the new normal. The new normal has no boundaries. It impacts nation-states, companies, families and individual citizens

We recently completed reading General Stanley McChrystal’s book Team of teams. Using the American Army’s 2003+ war in Iraq as the case study, McChrystal juxtaposes so very well the failings of the giant US army against the loosely organized but highly networked and effective Al Qaeda military machine. Despite its military prowess, the US army was losing the battle to Al Qaeda in Iraq. Upon close analysis, McChrystal concludes that something was wrong with the US military’s strategy in Iraq.

According to Stanley McChrystal, the problem the US army had failed to recognize, and address was a management problem. The US army was using the Fredrick Taylor linear and reductionist model to fight a non-structured, loosely federated Al Qaeda military outfit, that seamlessly changed its organization’s structure to suit multiple situations it faced in the field. Al Qaeda’s agility, flexibility and ability to move information fast was helping it win the war in Iraq. The US army found itself on the defensive and with its credibility on the line. The army suffered increasing casualties until it changed its strategy.

Suffice it to say that the large US army, had to copy Al Qaeda’s strategy and management model to beat Al Qaeda. Hard to believe but true. It’s the new normal!

Stanley McChrystal’s book elaborates so very well the drivers of the new normal. And we will see the drivers manifest in nations, organizations, and individuals at a later stage of this blog.

What are the drivers of the new normal?

It’s no longer complicated but complex. Complex business environments manifest via incredibly unique patterns:

  1. Forever turbulent, fast-moving, interconnected business environments. For example, a company may know what is bound to happen tomorrow but may never know how it will impact its activities. Businesses have to wait for things to happen before they know the impact it may have on their value chains
  2. It is impossible to forecast ‘business-impacts’ because the factors that shape impact like the interconnected world, the internet, mobile phones, social media platforms move information so fast and across a vast span of populations that foretelling future scenarios is near impossible.
  3. Yes, businesses may know what may happen tomorrow, but can’t determine with certainty what the impact on their value chain will be till it actually happens
  4. Efficiency is no longer the panacea to success – extremely efficient businesses have been overwhelmed by seemingly small events that for all intents and purposes initially appeared inconsequential.
  5. There are different solutions to the same problem on different days
  6. The fluid organizational structure is becoming the new strategy. We can no longer work under permanent silos

Complexity and its impact on the global business environment – real life examples:

  • The Citizen – Kenya Mortgage Industry:

We read an article on the popular Kenya online media house Citizen TV about the mortgage industry in Kenya.

It dawned on us that many well-meaning Kenyan’s continue to view the mortgage sector through the false lens of a stable and boxed business environment. The idiosyncratic setting that the African South of the Sahara is expected to follow to attain success goes like: go to school (for the few lucky ones), get a good job, get married, own a house and sire offsprings

Indeed, the family home market in Kenya today is symptomatic of the failure to shift from complicated but surmountable to complex and intertwined situation analyses. Middle-class Africans, in this particular example Kenyans, are failing to decipher a seemingly complex real estate market situation. They are still attuned to the linear, complicated, and consumerist real estate model. They still want to take a mortgage and buy a house whether that makes sense or not.

According to CitizenTV, it does not make economic sense to take out a long-term mortgage for the average middle class on a salary of approximately $1500. Instead, one is advised to rent a house and save the rest of the earnings for a turbulent future. A future that may, by the way, involve acquiring real estate cheaply.

Do your quick litmus test on the above – and you will likely discover that those that have aligned to the emerging thinking and opted to rent than buy are the type that can deal with complexity and its cause and effect.  The last Kenyan has put the would be mortgage payment money in secure savings.   On the other hand, the orthodox peers that still go to the bank to take out a mortgage are caught in the complicated problem domain and find it difficult to see through the mist of complexity. The latter extends to their other spheres of life.

It is analysis gone compound. It’s the new normal

  • Blue-chip company – United Airlines:

In March 2017, star performer, United Airlines CEO Oscar Munoz was declared US communicator of the year by the magazine PRWeek. One month later, Oscar found himself embroiled in a PR fiasco that threatened to bring an end to his tenure as CEO at United plus knocked millions off the airline’s stock valuation.

United had forcefully removed an adult passenger from one of its overbooked flights. The violent passenger incident was recorded on video, and it quickly went viral. The first response by the CEO was to defend his brand and team, terming the passenger disruptive and belligerent. The CEO insisted that his staff followed to the letter, the companies established procedures for managing such cases.

What did Oscar miss? The power of social media to move information from one end of the globe to another and in a matter of seconds. With social media houses broadcasting the violent incident, it quickly went viral. Oscar and his United Airlines brand were the subjects of venomous online exchanges. United Airlines customers and observers further afield saw Oscar’s response as overly callous.

As all this was unfolding in the US, the viral video was attracting massive attention in mainland China a key growth market for United Airlines. United Airlines quickly took the top trending spot on China’s Twitter Weibo

The United Airlines honcho and his top team failed to foresee the interplay between this seemingly small customer management case and the forever turbulent, fast-moving, interconnected business environments.

The result was a near catastrophe for United Airlines, and we still await the impact on its bottom line in both the US and China, as well as the long-term future of Oscar Munoz. The quintessential communicator stumbled when faced with the cause and effects of a complex business environment

  • The Nation State – Recent election in the UK and the Brexit quagmire:

In July 2016, the Effectiveness lab wrote about BREXIT: Organisations in induced comatose – The UK & Brexit

Growing up in Uganda, we knew that the ‘master,’ Colonial-Britain, could not put a foot wrong. ‘Made in the UK’ was the guarantee of quintessence. Quintessence both in the canniness to know what is best for the likes of Uganda, but also to produce the very best products. Many of us still adore and wear the orthodox British wardrobe and handmade English shoes from Nottingham. That is how respecting and cherishing we are to the ‘master’ – the ‘master’ did a fantastic job at making us believe.

Yet, on June 23rd, 2016, our ‘master’ was stripped, naked. The ’servants’ woke up to witness the ‘master’s’ front yard in disorder. The master was no longer canny and appeared disoriented plus confused. If it were a patient, the clinical signs were so bad that comatose had to be induced to save the patient.

Brexit left the UK divided but also a clueless and leaderless nation. How can this be true of the great UK?
Almost one year since the first comatose inducement and the master has had to be induced into a state of comatose yet again. This time, under the leadership of Theresa May

When Theresa May called the snap election early this year, she was guaranteed, by the now discredited polling agencies, a bigger majority than what David Cameron left her in the House of Commons

Fast forward to June 2017, and a combination of unforeseen factors has left the conservatives without a majority in the House of Commons and needing DUP’s support to form a government

The Youth surge via social media gave close to one million new votes to Jeremy Corbyn’s Labour party.

Who could have foreseen:

  • A Jeremy Corbyn renaissance?
  • The unfortunate terrorist attacks in both Manchester and London that threatened to torpedo the elections and had campaigns suspended at one point. If there is one factor that undermined Theresa May’s credibility, it is the terrorist attacks and the subsequent correlation of the attacks to the 20,000 police force reduction by Theresa May when she was Home Secretary

Theresa May wanted the campaign run on the promise of strong leadership for a hard Brexit, but unforeseen events instead forced an agenda shift to an uncaring lady that has brought terrorism onto the nation.

The rest is history. The Conservatives lost their majority, are weaker going into the EU Brexit negotiations, and the nation is yet again, in comatose

How do we deal with the new normal? Again, see you next week

Eid Mubarak! عيد مبارك



Categories: Strategy

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4 replies

  1. Ya sure Apollo. Businesses can ably predict what will happen tomorrow but cant figure out the impact of what will happen tomorrow. It is also more disastrous for them not to create impressions of what the impact will be . The new month is looming, over half of the year gone and things ironically ain’t the same. Strategic management – the new normal. Thumbs up Apollo

    Like

  2. Wow! Can’t get more surgical . Eid Mubarak

    Like

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