Focuses on the forces (internal and external) that push and pull organizations as they seek todesign and deliver strategies

1. MANAGING STRATEGIC TENSIONS
Turning Worrisome Tensions into Winning Thinking

2. Slide Set Outline
• The concept of tension
• The concept of tension in strategy
• The reality of tension in business
• The causes of tension in business

3. TENSION – the Concept
• The act or action of stretching or the condition or degree of
being stretched to the limits of a material or object
• To be taunt or stressed
• Either of two balancing forces causing or tending to cause
an object or person to be stretched
• Inner striving, unrest, or imbalance often with physiological
indication of emotion
• A state of latent hostility or opposition between individuals or
groups
• a balance between and interplay of opposing elements or
tendencies (especially in art or literature)

4. TENSION – the Concept
• Tension is what keeps a piano in tune. A piano goes out of
tune when it “relaxes.” A piano tuner restores the needed
tension that allows a piano to be harmonious. The same is
true for all other stringed instruments. They constantly “want
to relax.” Tuning a stringed instrument requires restoring the
tension necessary to produce the desired sound.
• In the marketplace, tension helps maintain the “harmony”
between supply and demand, revenues and costs and
customer needs and company desires.
• In strategy, the focus should be on managing, not relaxing,
the tension. Organizations, like musical instruments,
naturally seek to reduce tension. The strategic manager’s
task is to retune the organization and restore its harmony.

5. TENSION – the Reality
• Tensions in business organizations arise naturally out of the
fundamental nature of organizational-marketplace
interaction.
The Marketplace The Organization
Creates uncertainty Desires predictability
Is fluid and dynamic Seeks stability
Tends to individuality Tends to uniformity
Provides risky
opportunities
Gravitates toward
security
• Strategic management is not the search to “remove” the
tensions inherent in the marketplace (and inside the
organization itself). Rather, what is sought is how to
“resolve” the tensions constructively.

6. TENSION – its Causes
• The TIME TENSION. Business strategy navigates an
organization’s and a marketplace’s past, present and future,
none of which are “fixed.”
– The past is not simply an “established” historical record. It exists as
an interpreted or understood phenomena that reflects as much
perspective and interpretation as it does “the facts.” And, overtime,
our understanding and interpretation of an organization’s past
changes over time.
– The present is not merely a “given.” Our understanding of even an
apparently simple question such as “We are we now,” differs from
person to person depending on what we determine to observe and
how we process those observations into understandings.
– The future is always a judgment – its reflects our expectations and
aspirations, our perceptual filters, the numbers we give priority to,
etc.

7. TENSION – its Causes
• The TIME TENSION. Business strategy navigates
an organization’s and a marketplace’s past, present
and future, none of which are “fixed.”
– Beyond the tensions associated with the individual and
variable nature of the past, present and future, lies the
tension of developing a deliberate and constructive fit
between all three time dimensions
• Fitting resources and capabilities built on past successes with
• Present strengths and limitations while moving into a
• Future of both opportunities and threats

8. TENSION – its Causes
• The ENTROPY TENSION. ALL manmade systems
(both organizations and marketplaces) gradually
loose energy and direction and evolve into
something different.
• This means that everything is changing all the time
making accurate PREDICTION (how things will or
may be) and accurate POSITIONING (how we can
best take advantage of possible opportunities and
protect against possible threats) very challenging.

9. TENSION – its Causes
• The ENTROPY TENSION. ALL manmade systems (both
organizations and marketplaces) gradually loose energy and
direction and evolve into something different.
• The entropy tension also means that our own internal efforts
are hampered by the forces of
– Momentum (the tendency to continue doing what we have always
done even after such becomes ineffective)
– Inertia (the tendency to resist doing something new even after it has
proven to be more effective)
• The entropy tension also means that the external markets
(customers) we serve are continually loosing the
characteristics that made them attractive in the first place

10. TENSION – its Causes
• The MULTIDIMENSIONALITY TENSION.
Organizations and their marketplaces never exist
as single-dimension phenomena. They act and
react along a variety of levels and with a variety of
elements (parts).
• There are several impacts of multidimensionality:
– An intended impact on one level/part can lead to
unintended (and possibly unwanted) effects
– The interaction between various levels/parts can blunt
and/or amplify the power of out initiatives
– The interaction among levels/parts can make accurately
discerning causes-and-effects challenging

11. TENSION – its Expression

12. TENSION – its Expression