Strategy as Simple Rules

Kathleen Eisenhardt, Donald Sull Harvard Business Review

Strategy as Simple Rules
Kathleen M. Eisenhardt, Donald Sull Harvard Business Review, 2001

y

Strategies are encouraged to emerge within deliberately designed rules which ´define without confiningµ direction
Environment is made up of opportunities, (rather than products, markets, channels) Strategy is opportunism (not position)

A connection to Mintzberg
y

´Define without confining directionµ
Strategy as Simple Rules

y

Too much of a strategy·s benefits can lead to missed opportunities and an inability to adapt.
Mintzberg,The Strategy Concept II Why Organizations Need Strategies

Types of ´Simple Rulesµ
How-to rules y Boundary rules y Priority rules y Timing rules y Exit rules
y

How to Rules
y

How do we go about pursuing opportunities?
What is distinctive about these processes?

Boundary Rules
y

What kind of opportunities will we even consider pursuing?
What kind of opportunities will we ignore!

A connection to Porter
y

Boundary rules determine what kind of opportunities we will even consider « and by implication, those that we will ignore! Strategy is also about what not to do.
Michael Porter,What is Strategy?

y

Priority Rules
y

How will we establish (possibly shifting) priorities among the opportunities within our boundaries?
These priorities will probably not be static

Timing Rules
y

What is the ´paceµ of our strategic initiatives?
How often do we initiate something new? Within what time frame do we expect an initiative to come to fruition?

Exit Rules
y

How do we know when it is time to quit and move on to other opportunities?

Issues with Simple Rules
How many is the right number? y How specific should they be? y How should they be established?
y

Often this is based on experience
y

When should they be changed?

Strategy as Simple Rules
Kathleen M. Eisenhardt, Donald Sull Harvard Business Review, 2001

´Strategy-spaceµ is made up of opportunities; strategy is opportunism y Simple rules ´define without confiningµ direction y A very fluid approach to strategy for a dynamic fast-paced environment
y

Reflection and Reconciliation
Emergent Strategy (Mintzberg) y Strategy as Position (Porter) y Resource-based view of the firm (Barney) y Strategy as Simple Rules (Eisenhardt, Sull)
y y

Which concept of strategy, or hybrid of conceptions, is most convincing to you?

Related Interests