Advanced Systems Foundry

Review: The Strategy Paradox (Raynor, 2008)

This book focused on management of uncertainty
(including risk), and proposed a 4-step method to avoid making strategic
decision by guess or just leaving the profitable opportunities with greater
risk. The main idea of the method is based on creating and operating
“strategic options” instead of vast investment into an emerging opportunity.
The board sould focus on the strategic options to maintain the strategy
flexibility to the changing market, instead of making commitment
according to the “forecast of the future”. “The future” could not be predicted.
However, the range of the trend/future is much clearer than unprovable
predictions. Thus, a firm should create a series of scenes of the uncertain
future, and find core elements in most of the scenes. then create strategic
options and manipulate them to create higher margin of profit with lower
potential risk. If the option reveals a bright prospect, the commitment can be
made to invest more resources. Create strategy portfolio, not pursue a single
strategy. I think it resembles adding feed back loop to observe the outcome
error of the input and adjust its output according to the error.