Category Archives: Key Ideas

Asymptotic Thinking

What if... a single machine could provide all of the goods and services that a country's economy currently produces? Would human productivity (GDP per labor hour) be infinity ? Who should own the machine? Google? The government? Goldman Sachs? Would the end state look the same if we built such a machine over 100, 50, 10 or 2 years?

This is not rambling, this is "asymptotic thinking" and I believe it is a pre-requisite to good strategic thinking. In calculus it is

where p=human productivity and GDP=Gross Domestic Product.

This thinking is important because we approach limits incrementally from a DIRECTION and in strategy, as well as calculus, the direction matters. More specifically there can be discontinuities along the path, much like crossing a chasm in product marketing.

How many strategies are there?

Twenty? As many as there are companies?

At the highest level of competitive differentiation there are 3 (but it is still hard to get it right).

Technology changes...strategy doesn't. Change happens faster....strategy doesn't.

THE WORLD'S MOST FAMOUS BUSINESS-SCHOOL PROFESSOR IS FED UP WITH CEOS WHO CLAIM THAT THE WORLD CHANGES TOO FAST FOR THEIR COMPANIES TO HAVE A LONG-TERM STRATEGY. IF YOU WANT TO MAKE A DIFFERENCE AS A LEADER, YOU'VE GOT TO MAKE TIME FOR STRATEGY.

http://www.fastcompany.com/42485/michael-porters-big-ideas

"Plan" vs "Strategic Plan"

What's the difference between a plan and a strategic plan? Most companies, departments and people have a plan. So what's unique about adding the word "Strategic". It is not just an adjective, added to appear more sophisticated or smarter. It should change the content and mold objectives as well as articulate action steps.

Here's why:

1) Critical Environmental variables WILL change over the "planning horizon"

2) Actual outcomes will MOST LIKELY be different (sometimes a lot, sometimes a little)

3) It should FORBID certain resource allocations to enhance the CONCENTRATION of them

4) Plans are NEVER FULLY ACHIEVED but assume a next interval of time sequence

A "Plan" can assume the critical environment it is operating in will remain relatively stable over the "planning horizon". A "Strategic Plan" cannot and should not. Liddell Hart in his military strategy classic has a chapter on "The Concentrated Essence of Strategy and Tactics". Out of 8 items he includes "Take a line of operation which offers alternative objectives" which is rarely understood among business strategic planners.