Pattern-Based Strategy is a new research agenda that is focused on helping business and IT leaders seek, amplify, examine and exploit new business patterns. Here, we discuss several interactions with clients that are leveraging this research and ideas to further their current efforts and/or explore from a new viewpoint the new opportunities and threats facing their businesses.

• Many in business and IT have been thinking about these issues and challenges for some time. What is new and different is the holistic picture of this trend, a framework for understanding and evaluating the company's investment in diverse activities, and practical advice on how to augment and enhance current business and IT strategic planning.

• Start to explore the appropriate levels of investment in people, processes, information and technology, for the current state and future state.
• Begin to transition your business and IT planning from reactive to proactive activities (seek, model and adapt).
• Get creative about how your organization might leverage the collective in new and different ways, balancing the opportunities and limitations of your business.
• Don't just stop with exploring the Pattern-Based Strategy concepts, as its value is as a high-level construct and tool to help guide deeper analysis. Leverage Pattern-Based Strategy as a part of current business and IT strategic planning efforts and as a way to augment them.

This report is part of a new research theme, Pattern-Based Strategy. This research explores the factors, approaches and technologies that can enable business leaders to actively seek, amplify, examine and exploit patterns. Seeking patterns will require new disciplines and technologies that identify patterns of change that indicate opportunity or risk. We suggest that clients read "Introducing Pattern-Based Strategy" as an introduction to this topic theme.

Over the past few months, Gartner released a series of research focused on Pattern-Based Strategy. Pattern-Based Strategy is a way for business and IT leaders to seek, amplify, examine and exploit new business patterns (see Note 1 for a definition of terms). These patterns may come from weak or strong signals that indicate a business opportunity or threat. These patterns might come from any source or a combination of sources, including: (1) new internal and external business activities; (2) market, political or social events; and/or (3) changes in people, processes, information and technology. In the new hyperconnected, global and rapidly changing business landscape, the mark of the new business and IT leader will be his or her ability to evolve, shift and lead strategies, based on seeking, modeling and adapting to changing patterns.

While many in business and IT have been thinking about these issues and challenges for some time (for example, pattern seeking and recognition, leveraging the collective, and so on), what is new and different is that Gartner is providing clients with a holistic picture of this trend, a framework for understanding and evaluating the company's investment in diverse activities, and practical advice on how to augment and enhance current business and IT strategic planning. As we have discussed this thread of research with clients, several points have particularly resonated with them, including:

1. A shift from the organization "sensing and responding" to changing patterns (market, economic, social, behavioral, technology patterns and so on) to proactively "seeking, modeling and adapting" to changing patterns
2. A focus on critical business resources of people, processes and information, supported and empowered by technologies
3. A strong need (push and pull) to find new ways to leverage the collective, as well as to truly invest in creative activities (see "The Collective Imperative: Thriving in Chaotic, Out of Control and 'Normal' Markets")
4. A need to prepare for both anticipated and unanticipated exceptions that may introduce both risks and opportunities (see "Balance Investment in Four Categories to Support Pattern-Based Strategy")

Pattern-Based Strategy is clearly an emerging and evolving Gartner research agenda, and most clients had not heard of the term prior to recent discussions. As such, they were not pursuing any efforts under the term, guise or formal framework of Pattern-Based Strategy. However, some of the Pattern-Based Strategy concepts resonated with clients, such that they could use the concepts to augment their current efforts and/or explore new opportunities and threats facing their businesses. We look more closely at how five clients have explored and implemented Pattern-Based Strategy concepts.

We met the CIO of a large grocery retailer in the Asia/Pacific region with a highly diverse portfolio of wholly owned as well as franchised supermarkets. The business is in the enviable position of being one of the market leaders within the region. However, the CIO shared with us that he was concerned about it becoming complacent as a result of its market position. His main concern was that the retailer had become so successful within the scope of its currently defined operations that it would miss dramatic buying-trend changes and shifts. He noted that it saw the move toward healthier and organic foods that had already started in the United States and Europe, and he was concerned that: (1) it wouldn't be able to recognize when or if this trend began to affect Asia/Pacific; and (2) it might not have the structure, governance, culture and skills to respond to the buying shift.

The retailer had worked to deploy services and technologies to increase the organization's marketing/selling effectiveness and efficiency (that is, defined activities). However, his concern was that it would miss a new trend, particularly given how consumer buying is prone to dramatic shifts, and given the growing impact of social media in Asia/Pacific. We discussed the different activities that it is currently invested in, relative to what balance of critical activities its investments should be focused (exceptions and the collective) to increase its ability to detect shifts in buying patterns. We also discussed how the retailer might need to change some of its investments in people, processes and information, supported by new technologies, in order to capitalize on the creative activities that may be needed to analyze, market and capture new buyers in case of a buying shift.

Action: As part of strategic and operations planning, start to explore (current state and future state) the appropriate levels of investment in people, processes, information and technology, which will enable and empower your organization to seek, model and adapt to emerging and shifting business patterns.

We recently spoke with a client from a large health insurance provider. This person was originally from the business, but had recently moved over to the enterprise architecture (EA) group that was within the IT organization. His organization (as a business) was trying to find ways to evolve its strategic planning (both business and IT) to prepare for several different scenarios and be ready to pursue the most appropriate one as more healthcare reform signals became clear. Since the public and government debate in the U.S. is still evolving, this organization is trying to find ways to better detect patterns or shifts in any trends, opinions and/or facts within the healthcare debate. Its biggest concern was that it not get caught out or surprised at the end of the legislative process by regulatory requirements that it was unprepared to react to and/or support. As both business and IT, his organization is proactively trying to change how it works and runs its business to be prepared for any changes. The critical aspect and different thinking in his mind will be the shift from being reactive (to sense and respond) to proactive (to seek, model and adapt).

Action: Begin to transition your business and IT planning from reactive to proactive activities (to seek, model and adapt). This may mean evolving some of your organization's traditional planning processes to occur more frequently, to consider inputs from a diversity of sources, to seek and consider the impact of weak signals, and to increasingly explore and track multiple scenarios for your future-state vision.

We recently discussed Pattern-Based Strategy concepts with an enterprise architect at a large Canadian police department. The department was faced with two incongruent challenges. First, it is under increasing budget pressures that are limiting its ability to hire additional resources (that is, police force, administration and IT). Second, it is experiencing an increase in Class C and D felonies. It currently has a volunteer neighborhood crime stoppers program within the community, but the program's efforts are limited to reporting crimes, and its findings (for example, noncriminal events and strange activities) are not integrated into the crime pattern analysis that is done in the police department.

In the course of our discussion, based on some of the "collective" and "unanticipated exceptions" ideas, the department began to think differently about how it could proactively seek out information and insights from the broader community, including but not limited to crime stoppers. In other words, it would enable a citizen walking around the streets who saw something that might indicate an issue or possible crime to easily report this by text, photo or phone call (see "It's Web 2.0 Time for Public Safety"). This information from a wide range of sources could be gathered and used to find strong patterns (real crime reports) and weak patterns (suspicious activities) that could be analyzed and potentially acted on. Again, these were just scenarios it discussed, and four are clearly cultural, process, technology and information impacts that it would need to evaluate and balance. However, by understanding the concepts of Pattern-Based Strategy, the department was about to explore new ways of supporting its business so it could proactively seek out crimes, potentially before they happen.

Action: Get creative about how your organization might leverage the collective in new and different ways, balancing the opportunities and limitations of your business. Explore how these changes might impact your future-state vision scenarios, and how it might affect your current operational plans to support emerging technologies and new business processes.

The CIO of an Australian mining company was musing on the fact that it had just finished doing an eight- to nine-month installation of a major business application, but was finding that the application didn't reflect its changing business and the changing economic and geologic landscape. In fact, the problem had become so challenging for the company that he was having to meet with the company's board of directors on a regular basis to explain why they were having issues and challenges with this expenditure and what the company was going to do about it. During our discussion with him, we asked if the company had defined where and how it needed business flexibility as part of the evaluation and specification of its business application. We also asked if these requirements had been used to help drive its vendor discussions and negotiations. Not surprisingly, his answer was, "No." We discussed how it could leverage Pattern-Based Strategy concepts to explore what business activities the company was currently invested in (that is, defined, exceptions, creative and collective) and how these current investments might be different from what its business might need in the future (see Note 2). Then, we compared this analysis with how the business application supported these efforts (see Figure 1).

The part of this discussion that particularly resonated with the company was how it could use this framework to guide discussions with the board of directors in order to help the CIO make better business and IT decisions, rather than starting with a comparison of the details of one solution versus another solution. This can enable the board and business leaders to explore how the business might change to seek emerging patterns, and then empower IT to determine how and what it needs to support to achieve this business change.

Action: Find new ways to leverage Pattern-Based Strategy to determine future-state business scenarios (to seek, model and adapt), and to evaluate the strategic, operational, risk and innovation impacts of these decisions.

A U.S.-based electric company recently spoke with us about the changes that are affecting its business, and how it evolves its business and IT to support these changes. This company was under increasing political and public opinion pressure to quickly move toward "consumerization of electricity." This means that it would support smart grid and smart meters such that consumers and businesses could become power sources (via solar, wind and so on). The company realized that this would mean a significant shift in its current business model (marketing, partnerships, services and so on) in which it worked with a specific set of suppliers and distributors, and in which the "customer" was clearly the consumer of power. In its new model, customers would be "prosumers" — producers as well as consumers of power. In fact, this political and public pressure was pushing it further into the collective whereby it might have less control regarding suppliers, pricing and generation, all while still having to meet regulatory requirements.

Further, it realized that its new business model put it in the position of needing to seek and exploit anticipated and unanticipated exceptions that could profoundly affect the power suppliers (for example, intermittent providers, weather, demand, fuel costs and economics). We leveraged Pattern-Based Strategy to discuss what activities (see Note 2) it supported today and how its support of these activities might evolve over time (see Figure 2).

This process helped the company then explore what its future states might look like. And further, it enabled the company to determine where it needed to drill down into more detailed analysis that might help it evolve its current business and IT strategic planning.

Action: Don't just stop with exploring the Pattern-Based Strategy concepts, as its value is as a high-level construct and tool to help guide deeper analysis. Leverage Pattern-Based Strategy as a part of current business and IT strategic planning efforts and as a way to augment them.

"Introducing Pattern-Based Strategy"

"Pattern-Based Strategy Requires a Performance-Driven Culture"

"Introducing Operational Tempo Advantage: A Management Philosophy for a Pattern-Based Strategy"

"Balancing Investment in Four Categories to Support Pattern-Based Strategy"

"Five Eras of IT Business Value Add: From Automation to Pattern-Based Strategy"

"CEOs and Chief Strategy Officers: Balance Investments With Pattern-Based Strategy"

"Collective Competency: A New Business Pattern"

This research is part of a set of related research pieces. See Customer-Centric Web Strategies: Responding to All Things Social for an overview.