In this volatile and fluid environment, established market-structure-conduct approaches to strategy development don’t work very well. There is no stable industry structure or new market equilibrium that we will return to “when change abates.” More than ever, the player to topple a current dominant company in a particular space is likely to enter from outside with a de novo approach than to be an existing rival. Just look at the battle of Instagram, Quibi, and TikTok in the short-form video social media space—the now dominant player was unknown five years ago. Schumpeter’s creative destruction is in overdrive. We need fluid and responsive strategic approaches to match external volatility to be successful.
One repercussion of this changed environment is that most company and nonprofit strategic planning processes are fantasy: an unhelpful combination of lofty targets, linear projections in current segments, and no meaningful scenario analysis or modelling of uncertainty. There is little real strategic problem solving, leaving many management teams stuck in a nervous wait-and-see posture as volatility rolls through. Other company leaders avoid stasis by making panicky bets, including ‘leap before you look’ acquisitions in an attempt to block rivals and ‘own’ new spaces, typically with scant success. Think of Time Warner’s purchase of AOL, or more recent escapades at Twitter.
Based on a decade of research and 50 new case studies, The Imperfectionists puts forward a dynamic approach to developing organizational direction under uncertainty based on harnessing six reinforcing strategic mindsets, which we call curiosity, dragonfly eye, occurrent behaviour, collective wisdom, imperfectionism, and show and tell.
Imperfectionists are deeply curious, they look at problems from several perspectives, and gather new data via experimentation, and new approaches from outside their current industry. They deliberately step into risk, proceeding through trial and error, utilizing nimble low consequence and reversible moves to deepen their understanding of the unfolding game being played, and to build capabilities. They accept ambiguity and some apparent failures in exchange for improved learning and market position. Imperfectionists succeed with fluid, real time strategic problem solving, carefully moving forward while others wait for certainty, or make impetuous bets.
A good example is Amazon’s entry into financial services. If you are an Amazon customer you have likely encountered household names such as Amazon Fresh, Audible and Zappos. It’s less likely that you would have noted the baby steps Amazon took to expand beyond its core business into consumer financial services. The acquisition of TextPayMe, the investment in Bill Me Later, the hiring of a team from GoPayGo, and the launch of a remote card payment device, Amazon Local Register, were modest moves that involved little financial outlay and attracted relatively little attention at the time. They also all ended in apparent failure, with TextPayMe (rebranded Amazon Web Pay) closing in 2014, Local Register withdrawing from the market in the face of competition from Square, and Bill Me Later being acquired by rival PayPal.
Amazon didn’t wait for a mythical moment of strategic clarity, nor did it use its giant balance sheet to acquire a large bank or finance company. It edged out into uncertainty by taking small steps: investing in small companies with interesting technologies, hiring a team from a failed fintech, and launching internally-developed services and tools. It ran multiple, parallel initiatives and learned what worked and what didn’t. It built valuable capabilities and assets with moves that were mostly low consequence and reversible. There is no notion of strategic frameworks in its approach to building a major financial services business. Yet today Amazon is a powerhouse in consumer finance, boasting a 24 percent user share in the US for its pan-economy Amazon Pay service, and is positioned to develop further as a global finance player. Amazon is an imperfectionist, and is now employing a similar playbook as it enters healthcare and other segments.
We think the six strategic problem solving mindsets that we collectively call imperfectionism are strong medicine for solving tough problems in uncertain times. They will help you fight stasis and decision biases, and give you the right knowledge to develop informed strategies. In the fast changing world we all find ourselves in, being an imperfectionist is an important advantage for organizations small and large. I hope you enjoy the book.
