I used to lament the fact that the field of competitive strategy has so many competing approaches and frameworks to help firms with their competitive strategy. By my count, there are over 500 frameworks from which to choose. As I have written in this series, competitive strategy as a field tries to explain why some firms enjoy sustainable competitive advantage and sustained superior financial performance over rivals.
So strategy should be important. But the field itself has become a commodity in many respects. One important reason for this is that there is no universally agreed to body-of-knowledge for strategy and no agreed to certification for strategy practitioners and professionals.
But there is a good reason for so many approaches and frameworks. We will not discuss various frameworks in depth here. I have my own called the Business Performance Engine that I have written about in this series of articles. Our purpose here is why there are so many frameworks. The downside to this fact is that it can leave executives perplexed and frustrated. How can we get a handle on this complexity and have the fact that there are many strategy frameworks be useful for firms?
In two words, a key part of the answer is fractal geometry. Wow! You might be thinking, Bigler has gone off the deep end with this one. But I do not think I have and please read on.
Fractal Geometry In Competitive Strategy Frameworks
A fractal is defined as “… a never-ending pattern. Fractals are infinitely complex patterns that are self-similar across different scales”. ‘Scale’ here means at various levels of generalization from simple to comprehensive.
The key word for us here is self-similarity. James Miller wrote his magnum opus in 1980 titled Living Systems. At over 1000 pages, James shows how a cell is self-similar to an organ, and organ self-similar to the whole human body, how the body is self-similar to a city, a city to a nation, a nation to the globe and finally how the globe is self-similar to the universe. Knowing something about a cell gives knowledge of the universe and knowing something about the universe gives us knowledge of a cell. The person seeking knowledge and insight can slide and telescope along this self-similar continuum at whatever level of generalization is most convenient and/or useful for the situation at hand.
Simple Frameworks have Complex Applications
Now, what does this mean for strategy and all the frameworks out there? The answer is all of the existing strategy frameworks are self-similar. And each is useful in different contexts and different situations in which firms find themselves. For instance, the simplest framework is the classic SWOT analysis. Strategic planners have used Strengths, Weaknesses, Opportunities and Threats for decades. Another simple framework is viewing strategy as a set of Vision, Mission, and Values statements. At the right time and situation, each of these can be valuable for a firm trying to set its competitive strategy. Now telescope to my Business Performance Engine framework. This is a very comprehensive framework that is not useful when firms need a much simpler framework to try to win over rivals.
Two key related factors that set which framework will be useful is the learning style of the top management team (TMT) and the time available to get this work done. Some TMTs are very visual learners and want a framework with only four or five dimensions. Others are very analytical in orientation and would view the simpler frameworks as a waste of time. Another simple framework is Roger Martin and AG Lafley’s framework in their book Playing to Win. There they ask firms to ask and answer five questions:
- What is our winning aspiration?
- Where will we play?
- How will we win?
- What capabilities must be in place?
- What management systems are required?
This is it. For some contexts and situations, this level of abstraction is all a firm needs to set a course and competitive strategy. It produces a playbook that is simple, straightforward and short.
Framework Complexity Should Evolve In Tandem
You might be thinking, what is wrong with simple? Answer: nothing if this useful for the situation. But you might be thinking if you have used one of these or other more simple frameworks. “We spent three days in an offsite meeting arguing over just three words in our draft mission statement. The framework is simple, but there is so much that is required to actually write a good mission statement”. And you are correct. This is the fractal nature of competitive strategy frameworks. Simple does not mean there is no depth. Again, each framework is self-similar and can lead to the same end result. But as I write above, sometimes which framework is useful depends on the time available for the TMT and their learning style.
But here is my observation over thirty-five years of doing strategy work. Eventually, as the firm uses a series of more simple frameworks and gets comfortable with them, they want and need a more comprehensive framework to continue to win over rivals. The key here is that a good strategy process seeks continual new insights to continue to give the firm an edge over rivals.
With the fractal nature of competitive strategy frameworks, we have a condition where there will always be many frameworks and some in competition with each other. If my thinking is correct, it will mean we will just have to live with so many frameworks. The ability then to pick and choose the most useful framework for the situation will be a hallmark of a great strategy professional. One year a simple framework can work. Two years later a more comprehensive framework will be needed. So beware of the strategy professional that is wedded to only one framework, which is the one he or she is selling.
This article is part of a series on what causes a firm’s value to increase
Dr. William Bigler is the founder and CEO of Bill Bigler Associates. He is the former MBA Program Director at Louisiana State University at Shreveport and was the President of the Board of Strategic Planning in 2012 and served on the Board of Advisors for Nitro Security Inc. from 2003-2005. He has worked in the strategy departments of PricewaterhouseCoopers, the Hay Group, Ernst & Young and the Thomas Group. He can be reached at firstname.lastname@example.org or www.billbigler.com.