What Open Strategy Means for a Company
Updated: Oct 26, 2020
Ideas about company strategies are changing as quickly as the times. The standard structures used to involve a more rigid top-down approach. However, recent innovation of the open strategy has given way to a new implementation of ideas.
Although a fairly recent innovation, the open strategy has proven effective in the IT world. Major corporations such as Daimler, IBM and Linux regularly use open strategies, while other companies, such as Amazon, Google and Mozilla have used them for different periods of time.
Of course, this begs the questions.
What exactly is an open strategy? And should you consider using it?
Defining the Open Strategy
The idea of the open strategy is built on the foundations of transparency and inclusiveness of the strategy process to internal and external stakeholders. This means giving stakeholders more participation in strategy development with sometimes more than 150,000 people having a say in the process. At the same time, stakeholders in an open strategy are given access to information that is normally outside of what’s considered ‘necessary’ for their contribution.
While open innovation refers to opening up to internal groups, an open strategy often entails opening up to external players. This can include firms sharing information with outsiders, obtaining technology from other companies or soliciting external actors for solutions to internal problems. Firms might even reveal their source-code to an outside audience, as with the case of Linux.
Open strategies have proven to be effective in situations where circumstances are dynamic and need to be adjusted for quickly. At the same time, an open strategy can be used to avoid the problem of ‘groupthink’ where people will withhold less conventional ideas in order to maintain group synergy.
Utilizing an Open Strategy Effectively
Strategy should always be considered a starting point. For any work environment where goals are changing and shifting, an open strategy is ideal. The first point is not to conceive of strategy as a static element with overly defined features. Instead, it’s important to think of strategy as something dynamic and able to change in order to fit the needs of a given situation.
In an open strategy, it’s essential that all stakeholders can voice their opinions and offer solutions for a given project. The idea is that if everyone is able to create, assess, and execute strategies, they can achieve goals more effectively. This is part of the reason that transparency is so vital.
To really get the most out of an open strategy, it’s vital to have a good communication infrastructure, since it increases transparency and makes cooperation much easier. In the same vein, a communication infrastructure is only useful if a work environment that shows value on new ideas can be fostered.
At the same time, maintaining an effective dynamic and open strategy requires a lot of internal management. Large projects can benefit from co-working platforms that utilize voting systems, social media channels, and other forum-based ideas. These platforms can organize the ideas and input of a few to hundreds of thousands of members.
Possible Drawbacks of an Open Strategy
The concept of the open strategy isn’t without its flaws of course. Because of its dynamic nature, an open strategy comes with certain drawbacks and difficulties in implementation.
Firstly, an open strategy requires effective and rapid communication between stakeholders. As a result, sizeable costs can be incurred to in order to set up and maintain a high functioning communication infrastructure.
Furthermore, an open strategy means that different elements (scope, objectives, etc.) need to be well communicated to stakeholders at all times. Because it’s paramount for stakeholders to consistently know what’s happening and what the expectations are, there must be an effective means to communicate that information in place. Without this, a project can lean into disorganization, poor productivity and the strategy might ultimately fail.
Strategies are Never Static
A strategy is a starting point. A company’s strategy should always remain dynamic in order to account for shifting circumstances, such as changes in the market, customer base, scope or external factors. As such, come elements of strategy can be left unrealized while emergent strategies can be integrated as the circumstances change.
Naturally, an open strategy is not suited for all kinds of projects and companies at all times. In fact, companies might alternate between an open and closed strategy according to the situation. For example the development of Google Android OS and Amazon’s Kindle Fire began as open strategies that later became closed. Conversely, Mozilla and Cisco’s Open Daylight both shifted from closed strategies to open ones. In the case of OpenDaylight, Cisco gave up its competitive edge, but was able to continue dictating the direction of the product.
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