Michael G. Jacobides, in the article, “Strategy Tools for a Shifting Landscape”, in the January-February 2010 issue of the Harvard Business Review has proposed that we approach strategic planning by writing a “playscript”.

His article is intriguing and appears to provide a way to better deal with the rapidly changing environment than the more conventional strategic planning methodology. Some of his points of concern:

• Traditional strategy tools reduce complexity & only provide stationary maps and two-dimensional charts.
• “Newcomers” to the environment are rarely considered.
• Most strategy frameworks are simplifying devices and offer little insight to a complex environment.
• Most tools generate static “pictures” and do not recognize the importance of understanding evolutionary dynamics of the environment / market.

Mr. Jacobides recommends that organizations “. . . should tackle the challenge of developing strategy head-on by describing the underlying logic, story lines, decisions, and motives of all the players that are creating and capturing value in [an organization]. Instead of drawing and analyzing a map or plotting numbers on a chart, executives should use words to create what I call a playscript: a narrative that sets out the cast of characters in a business, the way in which they are connected, the rules they observe, the plots and subplots in which they play a part, and how companies create and retain value as the business and cast change.”

As he points out, words are more powerful and flexible than value curves.

Mr. Jacobides recommends the following approach:

Create corporate and then business unit playscripts.

– The corporate playscript describes how value is generated and appropriated by the headquarters – usually by how the center (headquarters) manages the relationships between the different units of the organization.
– The business unit playscript deals with three main elements
– The main actors, their motives and their roles
– The links & rules between organizations
– Present & future plots & subplots – how actors in an area capture & generate value.

How to develop your playscripts:

Write you current corporate & business playscripts

– Describe the broad setting in which your organization operates.
– Identify the other actors
– Identify the links among actors & the rules by which they operate
– Articulate the logic by which your organization creates value

Rewrite your playscript – envision how relationships, roles, and etc. might be changed in order to improve how you create and add value.

Future-proof your playscript – make sure your playscript can cope with the foreseeable changes in your business.

A couple of final points by Mr. Jacobides:

• Try this in an experimental fashion before actually implementing.
• People understand and respond much more strongly to words or stories than they do to numbers and graphs.
• Posing strategy as a narrative also is more effective in starting the crucial feedback loops that are so critical.

An excellent article and well worth reading.