Strategy as managing strategic tensions

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Focuses on the forces (internal and external) that push and pull organizations as they seek todesign and deliver strategies

Focuses on the forces (internal and external) that push and pull organizations as they seek todesign and deliver strategies

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  • 1. MANAGING STRATEGIC TENSIONS Turning Worrisome Tensions into Winning Thinking
  • 2. Slide Set Outline • The concept of tension • The concept of tension in strategy • The reality of tension in business • The causes of tension in business
  • 3. TENSION – the Concept • The act or action of stretching or the condition or degree of being stretched to the limits of a material or object • To be taunt or stressed • Either of two balancing forces causing or tending to cause an object or person to be stretched • Inner striving, unrest, or imbalance often with physiological indication of emotion • A state of latent hostility or opposition between individuals or groups • a balance between and interplay of opposing elements or tendencies (especially in art or literature)
  • 4. TENSION – the Concept • Tension is what keeps a piano in tune. A piano goes out of tune when it “relaxes.” A piano tuner restores the needed tension that allows a piano to be harmonious. The same is true for all other stringed instruments. They constantly “want to relax.” Tuning a stringed instrument requires restoring the tension necessary to produce the desired sound. • In the marketplace, tension helps maintain the “harmony” between supply and demand, revenues and costs and customer needs and company desires. • In strategy, the focus should be on managing, not relaxing, the tension. Organizations, like musical instruments, naturally seek to reduce tension. The strategic manager’s task is to retune the organization and restore its harmony.
  • 5. TENSION – the Reality • Tensions in business organizations arise naturally out of the fundamental nature of organizational-marketplace interaction. The Marketplace The Organization Creates uncertainty Desires predictability Is fluid and dynamic Seeks stability Tends to individuality Tends to uniformity Provides risky opportunities Gravitates toward security • Strategic management is not the search to “remove” the tensions inherent in the marketplace (and inside the organization itself). Rather, what is sought is how to “resolve” the tensions constructively.
  • 6. TENSION – its Causes • The TIME TENSION. Business strategy navigates an organization’s and a marketplace’s past, present and future, none of which are “fixed.” – The past is not simply an “established” historical record. It exists as an interpreted or understood phenomena that reflects as much perspective and interpretation as it does “the facts.” And, overtime, our understanding and interpretation of an organization’s past changes over time. – The present is not merely a “given.” Our understanding of even an apparently simple question such as “We are we now,” differs from person to person depending on what we determine to observe and how we process those observations into understandings. – The future is always a judgment – its reflects our expectations and aspirations, our perceptual filters, the numbers we give priority to, etc.
  • 7. TENSION – its Causes • The TIME TENSION. Business strategy navigates an organization’s and a marketplace’s past, present and future, none of which are “fixed.” – Beyond the tensions associated with the individual and variable nature of the past, present and future, lies the tension of developing a deliberate and constructive fit between all three time dimensions • Fitting resources and capabilities built on past successes with • Present strengths and limitations while moving into a • Future of both opportunities and threats
  • 8. TENSION – its Causes • The ENTROPY TENSION. ALL manmade systems (both organizations and marketplaces) gradually loose energy and direction and evolve into something different. • This means that everything is changing all the time making accurate PREDICTION (how things will or may be) and accurate POSITIONING (how we can best take advantage of possible opportunities and protect against possible threats) very challenging.
  • 9. TENSION – its Causes • The ENTROPY TENSION. ALL manmade systems (both organizations and marketplaces) gradually loose energy and direction and evolve into something different. • The entropy tension also means that our own internal efforts are hampered by the forces of – Momentum (the tendency to continue doing what we have always done even after such becomes ineffective) – Inertia (the tendency to resist doing something new even after it has proven to be more effective) • The entropy tension also means that the external markets (customers) we serve are continually loosing the characteristics that made them attractive in the first place
  • 10. TENSION – its Causes • The MULTIDIMENSIONALITY TENSION. Organizations and their marketplaces never exist as single-dimension phenomena. They act and react along a variety of levels and with a variety of elements (parts). • There are several impacts of multidimensionality: – An intended impact on one level/part can lead to unintended (and possibly unwanted) effects – The interaction between various levels/parts can blunt and/or amplify the power of out initiatives – The interaction among levels/parts can make accurately discerning causes-and-effects challenging
  • 11. TENSION – its Expression
  • 12. TENSION – its Expression