Should You Build Your Business Strategy Like Doing 'Tai Chi' – It's Non-linear, Adaptive and Is All Judo-Economics

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by: Idris Mootee

Strategic planning today is seldom strategic. Many companies label their operations meeting as strategic planning. 90% of the times they use a top-down formal process of articulating a vision and translate that to actions, assuming the word “freeze” while they execute.

This sense of disappointment was captured in a McKinsey research based on 800 senior executives: just 45% of the respondents said they were satisfied with the strategic-planning process. Moreover, only 23% indicated that major strategic decisions were made within its confines. Given these results, managers might well be tempted to jettison the planning process altogether. These are all smart people, so what is the problem with planning?

Think about a chess game, no one plans for than 5 moves. I cannot imagine one can plan 50 moves until victory without knowing how the other player acts. In the crazy world of business, it is a chess game with more than 2 players and the rules are changing as they play, imagine how dangerous it is to have a strategy that cannot reacts or keep pace with changing environment, responding timely to competitive actions and changing direction and at the same time empowering people throughout the company to make the relevant informed decisions. I have been a strategy consultant for 25 years; I have seen these mistakes happening all the time.

Here’s some insights from ‘Tai Chi’ which technically be translated as the ‘Supreme Ultimate Force’. The notion of ‘supreme ultimate’ is often associated with the Chinese concept of yin-yang, the notion that one can see a dynamic duality (male/female, active/passive, forceful/yielding, etc.) in all things. ‘Force’ can be thought of here as the means or way of achieving this ying-yang, or ‘supreme-ultimate’ discipline.

Let’s look at the combat aspects of Tai Chi, which can be applied to business strategy. In Chinese philosophy and medicine there exists the concept of ‘chi’, a vital force that animates the body. One of the avowed aims of Tai Chi is to foster the circulation of this ‘chi’ within the body, the belief being that by doing so the health and vitality of the person are enhanced. The way things happen and the behaviors occur are always through on going opposition between different requirements, desire, corporate intent, market demand or values. There are always things to be reconciled. What one has to recognize is that there is an on going process in which these things come together and translate into something that works. Business strategy is a purposeful adaptive system that constantly adjusting to market demand but pushing to a direction. Maintaining that adaptive system is part of getting the ‘chi’ flowing.

Let’s use the two-person exercise called ‘push-hands’, a ‘Tai Chi’ skill that can be applied in strategy. The concept is to be sensitive to and responsive of your competitor’s ‘chi’ or vital energy. It is also an opportunity to employ some of the martial aspects of Tai Chi in a kind of slow-tempo combat. The emphasis in Tai Chi is on being able to channel potentially destructive energy (in the form of a kick or a punch) away from one in a manner that will dissipate the energy or send it in a direction where it is no longer a danger.

In business strategy context, the ‘chi’ is the deep strategic core of your competitors, their dominant logic or view of the industry that drives that actions and tactics. With that knowledge, you can predict your competitors’ moves and stay ahead of the game. Getting the ‘chi’ also means getting a pulse of emerging trends that can help define potential demand for a company’s future products or services and where capacities are being built and when prices will drop etc. Here, disruptions are considered part of system and it is not trying to avoid or ignore them, but to embrace and leverage them. When a strategy is not agile, it causes great firms to fail. The cognitive failures that companies experienced are not normal accidents or mishaps, but a fundamental problem in our planning process.

The ‘push hand’ exercise is like a posture that best positioned against uncertainties whether you’re dealing with the music industry, nano tech or bio tech. Uncertainties offer opportunities, they may offer higher returns and lower risks for companies seeking to shape the market. When your industry is transitional by nature, often emerging after major technological, macroeconomic, or disruptive technologies, ‘Tai Chi’ concept can be most helpful. Since no player necessarily knows the best strategy in these environments, the game is to provide a evolving vision of an industry structure and standards that will coordinate the strategies of other players and drive the market toward a more stable and favorable outcome or a standard or platform. You need to move from defense to attack mode back and forth. It is not about simply applying force or market power in this case. ‘Tai Chi’ is based on the principle of the soft overcoming the hard. In this case, you cannot force everyone into a standard or platform, no matter how dominant you are. Direct opposition of another’s force is strictly discouraged (price war is a violation of Tai Chi principle because one one wins), and great emphasis is placed upon borrowing the force of the opponent and using it to one’s own advantage. The idea is use an opponent’s own strength against him, thereby allowing the weaker and slower to overcome the stronger and faster opponent. Just imagine if your organization can be organized this way?

Look ay Yahoo today, not only the lost their ‘chi’, it is reacting to outside forces and have no control over their destiny. Some 40 to 50 senior executives and engineers have left Yahoo since the beginning of the year – at a pace that appears to have accelerated in the last few weeks. At least five key executives, including Vish Makhijani, senior vice president of Yahoo’s search group, and Jeff Weiner, executive vice president of the company’s network division, were reported to have resigned this week. Microsoft is making some smart ‘Tai Chi" moves, whether they get Yahoo or not does not matter. Even if they don’t get Yahoo, they have done so much damage to Yahoo that drastically reduced their threat to Microsoft…all without spending a penny. That’s a good move. In an effort to highlight its efforts to recruit engineers with Internet search expertise, Microsoft this week placed an ad in the San Jose Mercury News, based next door to Yahoo’s hometown of Sunnyvale, Calif. Either I have the company, or I get its brains. I am good with both.

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