You've probably heard of it – It's the idea that seemingly insignificant variables in initial conditions can have dramatic (and usually intended) effects and outcomes. The common illustration for chaos theory is that the random flapping of a butterfly's wings can theoretically impact global weather patterns.
Although it isn't identical, business theory has a very rough equivalent called "emergent strategy theory." This theory is based on the concept that outcomes and strategies often diverge from intentional strategic plans. Even though emergent strategy theory seems to contradict everything you were taught in Business 101, it's a theory that is gaining momentum in the business community.
Emergent Strategy Basics
Emergent strategy is based on the concept that strategy emerges over time as business plans adjust to changing realities. While an intended strategy is precisely targeted toward a specific process and outcome, an emergent strategy evolves and develops as a consistent pattern of behavior begins to emerge.
The underlying precept of an emergent strategy is that the organization recognizes its inability to accurately predict the most effective strategy at the beginning of the process. Companies that embrace an emergent strategic approach are not lazy or uninformed – they simply prefer a strategic process that emphasizes learning and strategy development in the context of actual business experience.
Emergent Strategy Theory in Practice
Emergent strategies should never become an excuse to avoid the strategic planning process. The organizations that are most adept at emergent strategizing create a broad business strategy, but allow the details of the strategy to emerge from the learnings they acquire on a go-forward basis.
Likewise, the adoption of an emergent strategy requires the organization to create mechanisms for review and reflection. Rather than allowing the company's activities and decision making to develop in a free form manner, they consistently evaluate their strategy and find consensus before deciding on next steps.
Strategic planning success is often found through a combination of intentional and emergent strategy approaches. While it doesn't make sense to operate a business without broad goals and strategies, it is equally foolish to refuse to adapt your strategy to changing realities. A more balanced approach is to embrace both intentional strategic planning and the development of a learning culture that provides space for strategic details to emerge in the context of business practice.