Wednesday, April 24, 2013

Simple strategies is the rule across different types of teams

In “Strategy as Simple Rules,” Kathleen M. Eisenhardt and Donald N. Sull describe how companies should use certain processes to define the simple rules by which their company should operate in uncertain markets. The approach to the process will depend on the company’s relative position, strengths/weaknesses mix, and culture. These rules focus on:
  • The process execution of key features (“How-to rules”)
  • Scope of permissible pursuits (“Boundary rules”)
  • Prioritizing opportunities (“Priority rules”)
  • Setting the pace (“Timing rules”)
  • Changing strategies (“Exit rules”)

I postulate that the idea of having simple rules to convey the strategy of an organization has been applied to other venue of collective competitive action than companies. Political campaigns, for example, focus on one guiding message. The message is always “change” but the proposed processes, scope, priorities, and timing vary. In the 2012 Presidential election, Romney wanted a perceived change of focus from taxing to spending/saving by prioritizing large companies whereas Obama wanted to continue the progressive “changes” he undertook in his first term. As another example, football (soccer) coaches use a certain strategy to win. The Spanish national team uses a “pass & move” strategy. They prioritize possession of the ball over taking optimistic shots. In the 2010 World Cup, the Dutch national team, to counter Spain’s pass & move, opted for a strategy of defensive discipline, physical intimidation and long forward passes. They largely succeeded in disrupting the pass & move but their long forwarded passes failed to materialize into goals, so they lost the match in the end. Political campaigns and football teams, just like companies, undertake collective efforts to achieve a goal. They must maintain a simple strategy so that everyone in the organization works together toward common objectives.

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