Bayesian Strategy

By the 1980’s, the seams started to show.  When Jack Welch took the helm of General Electric he largely dismantled the strategic planning process, because, as he said at the time,”the books got thicker, the printing got more sophisticated, the covers got harder and the drawing got better,” but none of that improved how the company performed.

Oh he is so right!

Strategy is over process (the process in this case is Observing, Orientation, Decision, and Action or the OODA loop) not inside the process.

Strategy doesn’t really do anything to the process, but it does affect the outcome.

Process has no vision other than the one on the path the process is on–strategy has two vision, one of the process’s past and one of the process’s future.

Combining these two visions, of the same pathway, using strategy creates a process that is being destroyed by the vision of what the process (corporation) was and an new vision is created of the future of the corporation, as the process moves through time.

Guys like Welch are like rats abandoning ship, only they don’t jump over-board, the simply find another ship, heading in another direction.

To guys like Welch, it is far easier to find corporations, like Bain Capital, to act as salvage agents, who either sell off anything worth selling (such as their employees) in a sinking ship or feed more resources into the process of rebuilding the ship at sea.

These increases of new resource by a non-strategic person can give the process new life–strategy can change the path the process is on by destroying resources that are mostly caught up in entropy and releasing them in a new direction.

Process and strategy are both successful paths to follow.

Process is even more successful, if Welch is correct, if the corporations under a leader’s command function with out strategy to begin with.

via Bayesian Strategy | Digital Tonto.

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