Kumu Blog

Tools and practices for tackling complex systems.

What makes good strategy?

In Good Strategy/Bad Strategy, Richard Rumelt describes what bad strategy is and why we see so much of it. He also shares his framework for what drives good strategy along with guidance on how to create more of it. For a quick overview of his work, make sure to read The Perils of Bad Strategy.

I was struck by how relevant Richard's work is to organizations struggling to adopt systems thinking. There's a tension that is introduced when you acknowledge the complexity of your challenge and take a step back to look at the broader context. Sometimes it leads to organizations trying to "boil the ocean", spreading efforts too thin by tackling too many things at once. Other times it causes people to get overwhelmed and retreat into a comfortable silo, effectively ignoring the rest of the system.

What makes good strategy so hard in systems change is the inherent tension between understanding the broader context and distilling that understanding into coherent actions focused on a small number of critical factors and dynamics (aka the mythical leverage points). We often see systems maps fail to take a strong stance on the relevance of each factor. They show structure, but remain neutral on which factors have the most influence, which dynamics are stronger, and which factors actually have a shot of being moved.

Why is it so hard to identify the few, focused actions that might make a difference?

Bad strategy

Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage to move in the opposite direction. - Ernst F. Schumacher

Richard highlights a number of different ways we stumble when trying to create good strategy. Here are the three most relevant to systems thinking:

Mistaking goals for strategy - Maps of complex systems, such as early childhood development or water conservation, naturally end up with lots of factors and sectors involved. As we engage stakeholders across the system in a participatory approach, sometimes just getting a "finalized" map and aligning around goals for our collective effort is a daunting enough challenge. But we do ourselves a disservice when we stop there.

We must be honest with ourselves. "Increase the number of children ready for Kindergarten" is a goal, not a strategy. We must also avoid rationalizing stretch-goals as strategy by using the gap between where we are and the desired future to drive action. It may motivate people, but that doesn't make it strategy.

The inability to choose - Good strategy requires focus. We can't do everything we'd like to, and we certainly can't do it all at the same time. Some of our favorite ideas will need to wait. We must focus on the big picture and coordinate our actions over time to maximize our resources the best we can.

We must highlight the dominant loops within the system and focus on the critical factors. The bias from our research and understanding of the system should immediately be evident to anyone looking at the map. A neutral map, treating each factor and loop as essentially equal, is a map left unfinished.

Failure to face the problem - Another stumbling block is people's tendency to map how they would like the system to function instead of how the system currently functions. There are incredibly powerful forces at play in the current state that actively resist change. We cannot hope to change the system without first understanding those forces.

Make sure to identify and analyze the obstacles preventing you from making an impact. David Stroh recommends we ask, "Despite our best intentions, why have we been unable to change?"

If you don't take a hard, honest look at these challenges you're engaging in wishful thinking, not good strategy.

Good strategy

Fools ignore complexity. Pragmatists suffer it. Some can avoid it. Geniuses remove it. - Alan Perlis

Good strategy takes a stance. It has explicit hypotheses. It asks "what is really going on here?" It plans for ways to fail safe and admits uncertainties. It lays out coherent actions that focus on shifting a few critical dynamics. And it should be simple enough for those who aren't experts to follow.

Richard's structure for good strategy is broken down into three steps:

  1. The diagnosis - This is the most powerful use of the systems map. How do we analyze the current state and communicate the nature of the challenges we're facing? It's important to remember that a good diagnosis simplifies the overwhelming complexity of reality. Everything's connected but not every connection is relevant. Identify the critical factors and feedback loops, eliminate the rest, and distill the diagnosis into a comprehensive-yet-comprehensible narrative.
  2. The guiding policy - Think of the guiding policy as the guardrails for a strategy. Richard describes it as "like a signpost, marking the direction forward but not defining the details of the trip." While a diagnosis provides a rich understanding of the current state of the system, a guiding policy takes a stance on which dynamics we'll work to change and why we are uniquely capable of working in those areas. It concentrates effort and aligns action, especially when working on systems change with multiple organizations/sectors.
  3. Coherent actions - Strategy is ultimately about using the diagnosis and guiding policy to identify a set of coherent actions that have the potential for affecting change in the system. Identifying these actions helps ground the strategy in reality and provides an opportunity to test whether we believe the actions are both feasible and sufficient to create lasting impact.

An example

Let's look at how we might apply Richard's framework for good strategy to the case of homelessness in Calhoun County, Michigan, written about by David Peter Stroh and Michael Goodman:

1. The diagnosis

Homelessness is an incredibly complex issue with a myriad of forces and stakeholders involved. David and Michael used maps in the below presentation to help simplify that complexity and identify the critical factors and dynamics that needed to shift:

Adapted from A Systemic Approach to Ending Homelessness

While much effort and funding goes towards moving homeless into temporary shelters, the success of those efforts actually undermines permanent solutions to homelessness.

2. The guiding policy

The diagnosis led to a guiding policy that focused action in two directions:

  • Increasing and accelerating the number of people moving from temporary shelters into permanent housing
  • Decreasing the number of people at risk from becoming homeless in the first place

Adapted from A Systemic Approach to Ending Homelessness

3. Coherent actions

The team then created a set of coherent actions they would take to implement the guiding policy:

Transitioning to permanent housing

  • Increase visibility of homelessness by providing and distributing accuration information about the extent of homelessness
  • Increase collaboration among providers and the community and use that to align community investment around permanent solutions to homelessness
  • Deliver additional services such as substance abuse and mental health treatment for specific populations of people who were homeless

Preventing homelessness

  • Support ethical private property managers to rent to people at risk, increasing the stock of affordable housing
  • Create additional living wage jobs to enable people to pay their rent
  • Implement a breadth of critical services to help people remain in their current housing

Aha! Duh...

Good strategy almost always looks simple and obvious in retrospect. - Richard Rumelt

This quote rings true with what Scott Spann has shared about the "aha!" moment of a group in a systems mapping process. That moment is one of "aha!" often followed by "duh...". Often times the strategy that comes out isn't revolutionary. It might be a subtle tweak on an existing strategy, or a re-sequencing of the approach. Occasionally it'll be something groundbreaking but expecting it to be so is foolish. Find the "aha!", act on it, and look for the next one.

On deliverables

When there is a large amount of work going into a complicated process (such as systems mapping), we tend to inflate the related deliverables to reflect the scope of our effort. This is a huge mistake! We should take the simplicity of our resulting strategy as a sign that we've embraced the complexity, understood it, and found a few key leverage points where we actually have a shot at making an impact.

When it comes to strategy, size has little to do with quality. As Blaise Pascal said, "I would have written a shorter letter, but I did not have the time."

Here's to making more time for good strategy in 2016!

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