Wharton Chapter 9

Continuing where chapter eight left off on the development of strategy, chapter nine explains why a company needs to use "disciplined imagination" to develop their strategy. Developing a strategy is an art, not a science, and because of that "trends in strategy appear to alternate emphasis between discipline and imagination" from decade to decade. Both components have inherent strengths and weaknesses, and in come cases the strengths can become instant weaknesses if some extraneous circumstance happens to occur. In this chapter a good example was General Instrument. They were extremely good at disciplined strategy creation, but once the cable business became regulated, they were at a substantial disadvantage.

Discipline is consistent and methodical, and although it does not require a formal planning process, it is easier to identify and correct issues relating to the execution or planning of the strategy. It does have its pitfalls, though, as it is based more on analysis that synthesis.

Imagination is more creative, and should should be the first part used when combining discipline and imagination. This idea has more of a focus on synthesis. Create lots of options initially use diversity to examine and define the problem, as this will include more of a vision of the future, and not a reproduction of the past. Also not perfect, the imagination direction can bring upon chaos, dilution of individual creativity, and slow down the strategy-creation process.

These reasons are why it is best to foster a balance of discipline and imagination when creating a strategy. The way to do this is to generate imaginative options and evaluate the options consistently. "Strategy making can be an art, but in situations of uncertainty, strategy making must be an art."

In Paul Schoemaker's article "Disciplined Imagination: From Scenarios to Strategic Options", he suggests using a core capabilities matrix to integrate three steps:
1.Scenarios will be used to examine the external environment, specifically those trends and key uncertainties that affect all players.
2. Industry analysis and strategic segmentation will help define the battlefield in terms of competitors, barriers, and profit potential.
3. Core capabilities analysis provides the basis for developing a strategic vision for the future.

Use these three steps to derive a vision, and then use that vision to create strategic options.