Strategic Issues Diagnosis & Modeling
In most organizations and enterprises strategic planning involves the identification and formulation of strategies (i.e., corporate, competitive, operational and functional), and development of plans to guide implementation and execution of these strategies. In order to deliver value, a strategy has to enable change and adaptation of the organization to a problem; this requires that there are known problems to be solved. Yet identifying these problems is hard, partly because of complexity induced by the complicated structures (composed of many interrelated sub-problems, possibly from different domains, e.g., such as expressed through business architecture domains, etc.) of these problems, uncertainty due to incomplete information, and turbulence in the environment.
Identifying problems of strategic relevance and formulating appropriate strategies to respond to these problems is difficult. It often requires you to build a model of the problem, collect some data and information to test your hypotheses and assumptions underlying the problem to even discover what the real problems are to solve. The process is akin to an “empirical discovery loop” that enables systematic discovery and formulation of problems in complex real world situations such as strategy and policy making. Deciding how to solve the problem creates the need for more information and analysis, and simulation.
Strategic issues diagnosis (problem formulation) and strategy formulation involve decision-making processes that are distinct but related/linked. The nature of strategic decisions makes it possible for example, for decision makers e.g., managers within an organization, to have widely varying and incorrect beliefs about environmental factors such as market facts, for example:
These beliefs influence the choice of assumptions underlying the manager’s strategic decisions and determine decision success/failure. Most managers don’t understand that their choice of assumptions is arbitrary influenced by their beliefs and that they might not accord with reality so strategic decisions logically flowing from bad/erroneous assumptions can lead to bad/poor decisions which can in turn lead to poor/bad decisions and ultimately to strategies failing at execution.
Strategic Issues Diagnosis Modeling
The substantive outputs of the strategic issues diagnosis processes including assumptions, cause-effect understandings, and predictive judgments can constrain or facilitate decision-making during the issues diagnosis and subsequent strategy formulation stages of strategic management. Analytical models of the diagnosis substantive outputs include elements such as assumptions, cause-effect understandings, and predictive judgments as well as symbolic output of elements such as domain language and labels. Assumptions and cause-effect understandings, tacitly accepted or consciously explicated, are materialized in the form of predictive judgments. Some examples of predictive judgments include:
The Value of Modeling Strategic Issues Diagnosis
Modeling strategic issues diagnosis has a number of benefits including:
Ideas, Strategy & Strategic Ideas
An idea is a way of doing things never attempted or succeeded before; a "strategy" is a well thought out "approach to reach a goal. While an idea is a real new way of doing something; a strategy need not be a new approach of achieving a goal. Most of the time a strategy is chosen from among a set of "proven" strategies. Some examples include:
A strategic idea is a way of doing things that is;
There are many more such strategies known to businesses, as well as new ones; but the strategy you choose must fit your situation and objectives in order for it to succeed. In essence, you need to have a thorough understanding of your company, the business, the market and customers in order to choose the right right strategy to reach your goals.
I am serial technology entrepreneur and computer scientist interested in model-driven strategy and strategic decision problem analysis and solutions development to support descriptive analytics and human decision-making processes.
Copyright Interactive Design Labs 2005 - 2017