Former Google Senior Vice President of Business Operations Shona Brown and Stanford Engineering Professor Kathleen Eisenhardt assert in their best-selling book, Competing on the Edge: Strategy as Structured Chaos, that “the key driver of superior performance is the ability to change. Success is measured by the ability to survive, to change, and ultimately to reinvent the firm constantly over time.”

The book investigates matched pairs of anonymized companies in the computer industry as an example of strategy in fast-moving, unpredictable, competitive markets.

It draws upon concepts from the natural sciences, such as evolutionary theory and natural selection, as an analogy to change in businesses.

The authors state that decisions on what to structure or not, draw on:

-Improvisation
-Co-adaptation
-Regeneration
-Experimentation
-Time-pacing

These considerations set the pace of change by “balancing on the edge of time” from the past to the future.
They assert that these five phenomena enable a “semi-coherent” strategy, that is “unpredictable, uncontrolled, inefficient, proactive, continuous, diverse.”

Brown and Eisenhardt define natural science concepts in business terms:

• Complexity Theory
• Evolutionary Theory
• Dissipative Equilibrium
• Coadaptation
• Natural Selection
• Mutations
• Complexity Catastrophe
• Error Catastrophe
• Repeated Layering
• Genetic Algorithm
• Recombination
• Rearchitecture
• Modularity
• Entrainment

The authors advise to move to “the edge of time” and “the edge of chaos”, and offer guidelines including:

• Prune to reveal the core of the business
• Build the business through growth, not assembly, of modular parts
• Recognize that the business’s starting point and the order of implementing change strategies, are among outcome determinants
• Devote 15% of the product portfolio to experimental probes
• Apply successes from experimental probes in new ways
• Institute regular planning meetings focused on the future
• Exploit current capabilities in new ways
• Develop time-pacing through regular benchmark reviews
• Watch for missing linkage between key processes and innovation elements
• Use “patching” to match the best people resources with required tasks

This book offers an original examples and metaphors for change strategies in business, including jazz improvisation, The Tour de France, American Baseball.

-*What models do you use to understand and execute business strategy?

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