idealized design

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Idealized design answers the question, ""Ideally, what do we want the business organization to be right now?"" An idealized design is neither utopian or perfect. It is idealized because the design is the best that its designers can conceive of at a given point in time.

Strategy development and idealized design --
The business design produced in the creating art stage of the strategic management process is an idealized design. It is called idealized because it is unencumbered by the current culture, trajectory, and specific solutions to put the design in place, not because it is unrealistic. This design must be technologically feasible and operationally viable in the business's environment.

There are multiple alternatives of the idealized design produced in reaching the final design. Versions are produced to explore different business models in the existing environment and opportunities for the business in new environments. The exploration of new environments is especially important if the current environment is toxic and cannot be changed. The business design approach is systems thinking based, utilizing iterative inquiry of the aspects of the business model to define the business elements and their interrelationships. This approach exercises both innovation and strategic thinking development. The final design from this stage, whose implementation is planned in the next stage, is a complete integrated design containing the new theory of business whose hypotheses will be tested with the deployment of the strategy.

Idealized design and technical feasibility --
The idealized design is to be technologically feasible. This does not mean that all the technology and capability to achieve the business model must be ready to go and on-the-shelf. It must be reasonably anticipated to be attainable. For example, it would be difficult to justify a theory of business on the anticipated development of anti-gravity, time machines, or free energy. But it is essential to anticipate advances in microprocessor speeds, advances in nanotechnology, and advances in management techniques.

Technology is not just hard science oriented. Technology is the application of human knowledge to work. New technology is the new application of knowledge to human work. Lean and six-sigma are new technologies of the past quarter century just as much as the internet and biotechnology. Innovation is the tool of entrepreneurs. With the entrepreneurial activity driving the change in the business world, this change must be anticipated. Anticipating ongoing advances in the yield of resources and the value obtained by consumers from resources does not mean precisely predicting the future. That is foolhardy. But it does mean being savvy enough to understand which way the wind is blowing and insure the organization has sufficient adaptive learning capability to capture and capitalize on these dynamic forces of change, to the benefit of the organization.

The idealized design is also inspiring. It embodies the understanding of the industry, the economic shifts, the technological trends and the business savvy of the designers. Thus it embodies what Hamel calls the strategic intent of the business organization. The goal of strategic intent is to fold the future back into the present. The ends of what is possible are made clear, but the means are flexible, and may not even be definable, especially in total, at the time the idealized design is developed. Strategic intent specifically creates an extreme misfit between resources and ambitions, whose gap can only be closed by innovation, the building of new advantages. Pursuit of the strategic intent, the idealized design, guides and motivates the development of new capabilities.

An idealized design is subject to three constraints --

  • technical feasibility
  • operational viability
  • continuous improvement from within and without

Bounded and unbounded design --

  • a bounded design assumes the environment of the business organization remains the same while the business organization design is unconstrained
  • an unbounded design permits the designers to change elements of the environment that can improve the performance of the business organization

Why bounded and unbounded designs? --
In whatever environment the organization chooses to compete, there are two versions of the design produced. One version accepts the environmental constraints. The other is unconstrained by the environment.

The constrained design should be prepared first. It focuses the design on the organization itself, not on its environment. With their focus on the ""inside"", the obstructions within the system, which stand between an organization and where its designers would most like it to be, are discovered. Often, most or all of the obstructions are found to be internal to the system. The unbounded design then reveals how little of what is ""out there"" needs to be changed in order to achieve an idealized design.

The unconstrained design directs creativity toward what might be changed in the environment to the benefit of the business. Businesses can and often do change their environments, sometimes by changing the rules of the game, acquisitions, partnerships, lobbying lawmakers, influencing regulatory agencies, or legal tactics. Of course the environment is not under the business's direct control, is much harder to manage, and has less predictable outcomes. Because of this, the strategy should make a sincere attempt to not depend upon a business design unconstrained by the current state of the organization's environment. On the other hand, it is certainly prudent to explore the opportunities that exist in environmental constraint removal and be proactive about identifying and removing them.

See Russell L. Ackoff, Re-Creating the Corporation, Oxford, 1999, pp 87-105