Strategy under Complexity: Fostering Generative Relationships

Abstract

What is a strategy? The answer to this question ought to depend on the foresight horizon: how far ahead, and how much, the strategist thinks he can foresee. When the very structure of the firm's world is undergoing cascades of rapid change, and interpretations about the identity of agents and artifacts are characterized by ambiguity, we say that the foresight horizon is complex. We argue that strategy in the face of complex foresight horizons should consist in an on-going set of practices that interpret and construct the relationships which comprise the world in which the firm acts. Our discussion focuses on two intertwined kinds of strategic practices. The first is cognitive: a firm 'populates its world' by positing who lives there and interpreting what they do. The second is structural: the firm fosters generative relationships within and across its boundaries - relationships that produce new sources of value which cannot be foreseen in advance. We illustrate the ideas advanced in this article with a story about the entry of ROLM into the PBX market in 1975.