An Introduction to Open Strategy (Part I)

Social media and real-time communication technologies have triggered a significant trend: participation. Consumers no longer just consume, but actively communicate and co-develop. Citizens no longer passively wait for government decisions, but launch their own petitions and initiatives. Organizations have also begun utilizing the power of crowds. In particular, they have been actively organizing innovation contests or encouraging joint brand communication. Despite satisfying cooperation results, many organizations still have been reluctant to include crowds in the strategy-making process. Still, those organizations that have decided to develop strategies with more participants have some valid points to do so. 

Motivations behind open strategy 

One of the main motivations for adopting open strategy is its potential to generate new and unconventional ideas for the strategic direction of organizations. Some managers believe that people unaffected by a dominant organizational culture have more chances of finding groundbreaking solutions. There are also organizations that seek to utilize the wisdom of crowds to improve the decision-making process within an existing strategy. They realize that accessing collective intelligence is beneficial as it has been observed that large groups of people are better at problem-solving than individual experts. Furthermore, the strategy-making process is being opened up because of the potential for better performance and the crowd’s creativity.  

What drives open strategy

It has also been observed that progressive organizations are increasingly seeking to adopt open strategy as employees – just like society in general – demand more inclusion, transparency and accountability. This trend is facilitated by modern communication technologies, which enable the inclusion of more participants than ever before. In addition, the rise of business education encourages the participation of a more diverse group of stakeholders. Knowledge about the role of strategy as well as how it is affected and implemented is thus no longer limited to the managerial elite.  

Conventional strategy vs open strategy

Traditionally, strategy has been an exclusive domain of the chief executive officer (CEO) and senior executives. After extensive discussions, meetings and research, the CEO typically announces a new strategy and presents it to his / her staff. Open strategy is the complete opposite of this approach: it focuses on inclusion and transparency, which means that all staff as well outside stakeholders can be involved in the strategy-making process. 

The challenges of implementing open strategy

Due to its dynamic nature, open strategy is difficult to implement. One of the challenges is the fact that stakeholders need to communicate effectively and rapidly. As a result, significant costs can occur when setting up and maintaining a complex communication infrastructure. Moreover, the elements of open strategy such as its scope or objectives need to be well communicated to stakeholders so they are well aware of what is happening. Without good communication, all joint effort might result in disorganization, poor productivity and, eventually, failure.

Read An Introduction to Open Strategy (Part II).

References:  Christian Stadler, Julia Hautz and Stephan Friedrich von den Eichen, | Christina Wawarta and Sotirios Paroutis, | Benjamin Gredeson,