Strategy as a narrative

A version of this post was delivered as a talk last week at a NASSCOM event for a few GIC leaders looking to drive innovation.

Fundamental questions around innovation are

      1. Scouting: What is the idea and how are we getting those ideas? Primarily it is about listening to ideas that are being tabled, presented or being talked about wherever and whenever.
      2. Investing: What is my next action after listening to the idea? Once you hear an idea, if it does not give raise to a “next action” there is very little chance for impact, even if it means just forwarding the email with a note and a presentation. Managers and leaders may choose to ignore an idea right in the inbox or kill it with many of those familiar techniques like death by delay or details. Point is there has to be a set of things that need to happen to the ideas that surface up, and of course lots of ideas surface up, and your capital, time and attention is very limited so you choose to do stuff only with very less number of ideas. When we say to do limited set of things the immediately “is this a process” comes to mind, but really it should be seen as a ritual, that whatever be the idea, your way to act has to kick in. It is generally never the same across 2 departments, I have seen in my company how, Finance is able to go live on ideas with a much lower management support, whereas marketing never goes live without a SVP approval.
      1. Testing:  What the world did about such ideas? Testing ideas at scale is a capability, it is easy for online or mobile; .com experiments are cheaper to run than  most other channels. MVP and lead user feedbacks are most important aspects to find if the idea is worth its salt, and if it can actually create the impact it claims. If the business decides to simply follow quickly rather than lead, testing of high capex technology can actually be delegated to competition that is raring/daring to lead.

Even if you understood how to scout, invest and test ideas, unless you are able to play to the current and historic narratives of the company, it will be very difficult to navigate structures and influence people to create the impact.

Enter strategy as a narrative

  1. If you take corporate and the CFO function, priority is given to investors where the narrative revolves around capex and return on investment, growth and these tend to be driven from the planning function that benchmarks against existing peer/competition. Specifically ROIC and EPS is set on the long range plans that can all be seen with a simple query.
  2. If you take customers as priority, you would account for specific trends for example shifting of shopping online and mobile (both experience and transaction), growth of subscriptions for everyday goods, willingness to pay for same day service, assuming free shipping and returns is affecting our business. Narratives here will be around who the customer is, why certain behavior change will profoundly affect the way of conducting business, how can business continue to provide the same level of experience and service across channels to the customer.
  3. Whereas a business pyramid may be interested in specific outcomes and ways (processes/technologies/partnerships) to achieve those. For example a supply chain or distribution narrative can range across the entire logistics ranging from sourcing countries to last mile delivery convenience to customers or a merchandising narrative cutting across the entire life cycle of the product (like partnership – product placement – price), while a marketing narrative may just focus on branding and advertisement and mode of delivery.

All of the above can be affected profoundly by technology changes, as Brian Arthur (who wrote The Nature of Technology: What It Is and How It Evolves and advises companies like Google), makes a claim that technology changes brings forward need and further another set of technologies, and an easy analogy could be with the invention of automobile leading to all sorts of technologies across, oil refining technologies, road technologies like highway networks, signal systems, systems like satelite mapping, and now we get real time traffic information on mobile etc. In and of itself, where narratives shift rapidly and has to be made sense with any of the stakeholder outcomes above.

Finally I want to talk about how technology investments are shifting to business functions rather than the IT department. This can simply be seen by growth of budgetary provisions in your company technology and other business. For example out marketing department budget will be easily more than 7 times that of IT department budget. And Marketing do spend a large chunk of these investments in technology.

To be part of any narrative or a broad objective involves engagement with HQ and this is usually achieved by getting a seat at the table, and then building your way across to both receive and transmit signals to the General’s ear. Usually General’s hold cheque books and veto powers. I am not claiming in anyway that this is the only way to do it. For example when Jeff Bezos sends a note to country heads on India as a priority for the year and it means there is a support guarantee from apex leadership that can be summoned when needed.

Another way to achieve the same objective is to set standard processes for say estimating effort, quantifying impact, requesting resource etc.

So being open to work and play with a broad set of narratives that keep changing as needs, approaches, technologies change and the speed at which we can do this sitting in a far off location and scaling the way in which we listen and respond, largely will determine the future, including your very existence.


On Authority Types

Especially in corporate functions, the talk of being “handicapped without authority but only more  responsibility” usually echoes in at least one meeting room daily. Governments and their structure teaches a thing or two about authority, for me the most important is the distinction between statutory authority and executive authority.

Statutory authority is usually independent of the government itself, i.e. the political party in power, an example could be the Telecom Regulatory Authority of India or the Securities and Exchange Board of India. They have certain key responsibilities like protecting interests of consumers, shareholders, investors and others, they set standards for transactions broadly, and they monitor adherence. They get their form from a legislation and they have a tribunal mechanism attached where disputes can be resolved. Resource needs for statutory authorities are usually small.

Executive Authority is usually part of a government and is controlled by the party in power. They execute simply, the Central Public Works Department is one such example. They take ” full responsibility for planning designing, estimation, evaluation of bids, finalization of contracts, defending arbitration and court  cases” but all within some statutory framework only. Resource need for this form of authority is huge.

Obviously to function effectively both are needed for the common good, issue within organizations and corporate functions is the confusion between what authority are we talking about among other minor issues like in dispute or lack of use how to deal and existence of competing standards.

Can we clarify when next time some one complains “responsible without authority” please.

And “empowered” means granting at least one type of authority.


Head, Hand and Heart for Change

I am not a philosophy major, but I understand the differences between reason, will and desire. In a corporate setting, most published “content type” from top is just plain reasons viz. whys to do something, to approve a budget, to take up a new initiative, an ROI and more such. But the will and desire are left out mostly. When you hear “to lead by example or walk the talk”, it is an indication of will, and when you hear “did not feel like doing it” “ Yes, but…” it is an indication of desire (or the lack of). At this point, we depart from the simple system definition to one in the complex domain as the agents and actions are intertwined. Will and desire (or the lack of) spreads faster and influence actions more than the published reasons. To work only with reason and undermine will and desire is a forceful push from the complex domain to simple domain.

A simple framework for action/change thus in any reasonable sized system should handle all 3 (reason, will and desire). One may be more magnified than the other, and in fact, they should be. When this happens, a series of actions unfolds with no clear attribution possible. These are system responses and agents are playing part. Here is where stories that people tell each other and social objects come in, bringing players from all over the system for action willingly.

A simple metaphor for this framework is the simple head-hand-heart to reason-will-desire respectively. In action/change scenarios, all 3 operate simultaneously, but you can never determine outcomes. If boundary conditions are favorable, outcomes are impactful and always contextual.

Now to orient a bunch of leaders on this head-hand-heart framework is easy, make a list of past failed initiatives like below

  Head/Reason Hand/Will Heart/Desire
Initiative 1 <<Enter biz case/ROI/5W etc>>    
Initiative 2   <<Enter policy change, mobilized support, experiments done etc>>  
Initiative 3     <<Enter social objects, desires tapped, etc>>
Initiative n      

When you fill this up, you will notice that the last column will be the most sparsely filled or even empty.

Coming from an industry that runs on perennial initiative fatigue, I was not surprised when I filled one for myself.

Try it …