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The making of strategy today is inextricably linked with, and in large part really about, the management of change. The strategy-making process is, in fact, the cognitive component of the change process. Change begins in the mind, with new ways of thinking that are later translated into and shaped by new ways of behaving. This new reality calls for a fundamental re-conceptualization of the traditional Balkanized strategy frame that draws boundaries between organizations and their environments, senior managers and subordinates, mindsets and skillsets, and strategy content and process.
The cornerstone of this concept of strategy is the widespread diffusion of strategy-making capabilities in individuals throughout the organization. This relies upon a combination of strategic thinking abilities and the empowerment to act. These must be coupled with a capacity for strategic conversation, or dialogue, at the organizational level that draws together these individual conversations and that shapes and is shaped by them into a coherent institutional intent. Taken together, these local and organizational processes create a capability for continuous adaptation that has significant value in a time of on-going change.
Much thinking and writing about strategy has remained situated in a world of hierarchy and stability. While willing to embrace new concepts like "strategic intent" and "competing on capabilities" as promising alternatives in theory, we have stopped far short of re-examining what these actually mean for the strategy-making process in practice, beyond a general sense that strategic thinking deserves more attention.
When we adopted a view of organizations as living organisms rather than machines, we located the strategy-making process as the "brain" inside the "head" that was senior management. That metaphor, we argue, is no longer useful for thinking about the process of making strategy. Gareth Morgan offers an alternative metaphor for the organization as brain and argues that this view forces a focus on two factors that we consider central to sustaining success in changing environments: the ability to process information in a way that fosters learning, and to encode the whole in all of the pieces.' In this article, we add the metaphor of strategy making as conversation. Taken together, the metaphors of organization as brain and strategy making as conversation create a capacity for a broader range of sophisticated responses to the challenges...