Strategy as Invariance

The weird, frustrating and fascinating thing about strategy is that (almost) everything is in flux. Markets, rules, technologies, competition, people, cash,..., are all perpetually changing. This relentless dynamism prompts a way to frame the central question of strategy: what, amid all this variance, is invariant in strategy? Or put another way: even with everything changing, is there a unchanging cause of success?

The search for invariance is common to all scientific enquiry and much besides (Nozick's "Invariances" might the best text on this theme). But strategy is intentionality writ-large. It's about a cumbersome effort to create rules for the unruly; to circumscribe what people collectively do and how they should do it for better outcomes.

The question of success-causes is, therefore, deceptively tough. And our favoured answers to it tend to raise more issues than they resolve. For example, the pre-eminent Resource Based View claims that firms are bundles of resources and capabilities that - hopefully - produce value, are rare, hard to copy or substitute, and are constantly primed to suit specific market needs. It's hard to replicate Lennon & McCartney's song-writing abilities, De Beers' diamond mines, or the inter-organizational relationships of Goldman Sachs. While this kind of answer is arguably our best-yet effort at finding elusive sources of invariance, it says far more about what success looks like (i.e. a firm is special in terms of its resource and capability endowments) than how resources and capabilities are produced in the first place. As ever with economics-driven theory, the "what?" of success analysis is better handled than the "how?".

My own research work tries to begin to grasp an answer to the "how?". Briefly stated, I argue that firms are really collective intelligences and strategy is the manifestation of that intelligence. That is far from being a new thought, but we also know that individuals' IQs have very little bearing on collective intelligence. The idea I add: it's the pattern of communication and joint effort that matters. So my research focuses on the idea that some patterns are optimal and extend beyond (and within) individual brains via such media as language, technology, social capital or inter-firm alliances. Extended mind and collective intelligence supervene on complex patterns of interaction in which important knowledge flows. By specifying what networks matter (I define two optimal network archetypes) and how they flow, I hope to contribute at least a bit of an answer to the oh-so-challenging "how?" question of strategic management.

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