Policy/Strategy for Global Complexity
Business unit CEOs, corporate executives, leaders of NGOs, and top government officials, are all facing a world of increased complexity going forward. The complexity arises from the intersection of energy security and global warming concerns in a tightly coupled global economy. Rising living standards in the developing world accentuate both of these challenges.
Keystone Decision - Burn or Opportunity
Hydrogen Options within an Energy Strategy for Canada
A National Energy Policy for Canada
Global Complexity – New Opportunities
Climate Change: The Strategic Challenge for Businesses
Fifty years ago, Peter Drucker talked about an age of uncertainty, as new technologies overtook an era of development of heavy industrial capacity and mass markets in the North America and Europe. Complexity is different from uncertainty, and requires a different strategic response. Uncertainty, for example, can be handled by keeping options open and managing with organizational slack, to allow response to breaking events. Complexity implies a more tightly coupled world, and requires a much greater capacity for innovation within organizations. Complexity requires synthesis at higher levels for strategy, and an ability to change products, processes, methods and capabilities much more rapidly within operating units. A tightly coupled world implies more volatility, requiring a more rapid response to changing events. Slack will not do it. Intelligence and flexibility will.
We are accustomed to thinking about public policy and business strategy in two separate compartments. Today we need to reintegrate our thinking on these decisive areas, so that government policies in-country and globally take account of business needs and provide unambiguous channels for business planning. Similarly, business strategists need to have a deeper appreciation of the political milieu and the thinking of public policy analysts.
For executives with an international portfolio of business interests, the strategic challenge is shaping that portfolio in a 10 to 20 year horizon. The issues vary with the business. For businesses with asset life-spans extending to that horizon, energy efficiency and environmental impacts will be critical.
For business unit presidents, strategy features reshaping the business model in a 5 to 10 year time frame for enduring competitive advantage. Often business unit strategy can be enhanced by identifying a strategic business process, and raising the execution of that process to a level higher than the competition.
Top government officials need to view policy in similar time frames, as a country’s ability to function in this context of global complexity will be enhanced by policy and legal frameworks that reduce uncertainty for investors, especially those making strategic 5, 10 and 20 year business decisions.
For all of the above, strategic clarity needs to link to operational matters in a practical way. The importance of this drill down is obvious in linking strategies to business plans, and it is equally important in linking public policy to what happens on the ground.
Leaks in Manitoba Government Water Bucket
East Side Story a Requiem
High Water, Different Cause
Complexity? Why is a highway more acceptable than a Hydro line?
Strategy formulation is a creative exercise demanding extraordinary awareness, perception, and insight beyond logic and specialization, most often based on broad knowledge and experience, but not always. Organizational survival is threatened when the best laid strategies are dealt a rapid combination of hard body blows that undermine the organization’s business base. Hard analysis of the competitive or policy arena is always the first step in strategic planning. Horizons need to be expanded through techniques like future search, which enables people to do things once thought impossible. Clear visions need to be articulated and shared throughout the organization scaled to the time span appropriate at each level.
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