When Strategy Meets Reality, Identity Is Revealed

Why grand strategy is an earned identity, shaped through interaction with reality

Most organisations behave as if grand strategy can be decided in isolation.

A leadership team steps away. The language is careful. Purpose, ambition, values, north star. The organisation returns with a refreshed sense of who it is and where it is going.

Except it does not.

What usually emerges is not identity, but aspiration. A story leaders would like to tell about themselves, rather than something that has been earned through action.

That distinction matters because grand strategy is not what you say you are. It is what the world has learned to expect from you.

In other words, identity is not chosen. It is produced by how the organisation is structurally coupled to its environment.

Grand strategy as earned identity

Grand strategy is the organisation’s enduring identity.

Not a slogan. Not purpose wording. Not a narrative exercise.

It is:

• who you fundamentally are in practice

• the commitments you keep making, even when they are costly

• the principles and policies you are prepared to pay for

• the ethics you refuse to trade away under pressure

• the position you occupy in your ecosystem

In Viable System Model terms, this is System 5. The identity and ethos that place ultimate bounds on what the organisation will and will not become.

Grand strategy does not set targets. It sets constraints.

• It anchors principles in reality.

• It establishes minimum viable ethics.

• It creates coherence between intent and action.

• It prevents drift when pressure rises.

A useful way to say it is this:

Grand strategy is an enduring identity, ethos, and enabling constraints.

Grand strategy answers the question of who we fundamentally are. Strategy answers how and where we move now.

They are linked, but not interchangeable.

Identity changes slowly. Strategy changes through action.

Identity does not emerge internally. It emerges through coupling.

Organisational identity does not form inside the organisation and then get projected outward. It forms through structural coupling.

Structural coupling describes how an organisation and its environment co-evolve through repeated interaction. Each shapes the other. Over time, certain responses stabilise, behaviours become reinforced, and options disappear.

Identity is the pattern that remains.

What an organisation repeatedly does in response to environmental change shapes what it can do next. Capabilities, cost structures, decision rights, power relationships, incentives, and expectations all adapt together.

This is why identity cannot be redesigned at will; it is not a statement, it is an accumulated relationship.

It is also why organisations that revisit “purpose” every year often become less coherent. They repeatedly reopen questions that should already be settled.

In system terms, they confuse identity with planning. System 5 is treated as a design artefact rather than an emergent constraint.

The result is an organisation that behaves as if it is having an existential crisis on an annual cycle. Coherence erodes. Trust weakens. People stop taking declarations seriously because nothing endures long enough to be believed.

If you want to change who you are as an organisation, you do not start with new words. You start by changing how you interact with the environment.

Why identity snaps back: the Law of Sufficient Complexity

There is a systems law that explains why organisations struggle to change who they are, even when the intent is clear.

It is often referred to as the Law of Sufficient Complexity, and its message is blunt:

The system does what it does because it is what it is.

Formally, the law states that a complex system constitutes its own simplest behavioural description. If the system remains structurally the same and is exposed to broadly similar inputs, it will tend to reproduce the same patterns of behaviour.

Put more plainly:

If you are what you’ve always been, you’ll do what you’ve always done.

This is why attempts to change behaviour without changing structure tend to fail. The organisation may appear to move, but over time it snaps back to its previous equilibrium.

This is not resistance. It is homeostasis.

Identity, in this sense, is not a belief. It is a structural outcome.

Which is why culture programmes, vision statements, and leadership narratives so often disappoint. If decision rights, incentives, power structures, information flows, and constraints remain unchanged, the organisation will reliably reproduce the same behaviour and, over time, the same identity.

Remove the “problem individual” from a leadership team, and someone else often assumes the same role. Reorganising a function without changing authority results in the same conflicts reappearing. Announce a new strategic direction while protecting existing couplings, and the organisation quietly returns to its old trajectory.

The structure reasserts itself.

Identity changes in the same way for people.

This dynamic is not unique to organisations. It is how identity works for people, too.

You do not decide who you are in isolation.

You become who you are through repeated interaction with the world: the choices you make, the environments you place yourself in, the work you commit to, the relationships you sustain, and the constraints you accept or refuse.

You might experiment with different versions of yourself early on. A role. A label. A direction you think you want to head in. But those identities only stick if they are reinforced by what you actually do and how the world responds.

Over time, identity settles. Not because you declared it, but because it has been earned.

You do not wake up one morning and decide you are a different kind of person without changing how you live. If nothing in your patterns of behaviour, relationships, or commitments changes, the identity snaps back. The structure has not moved.

Organisations behave the same way.

They cannot simply announce a new identity and expect it to hold. If the underlying couplings remain the same, if the same decisions are made in the same ways under the same constraints, then the organisation will continue to become what it already is.

This is why identity change feels destabilising when it is attempted through language alone. It asks people to live a future that has not yet been earned by action.

And this is why genuine identity change, for people and organisations alike, is slow, uneven, and grounded in practice.

Ashby’s Law: identity is a viability problem

Ross Ashby’s Law of Requisite Variety explains why this matters for strategy.

Ashby’s law states that only variety can absorb variety.

For an organisation to remain viable, its internal capacity to sense, interpret, decide, and act must be at least as rich as the variety presented by its environment.

This is not a planning problem. It is a structural one.

When an organisation’s identity constrains its variety, it becomes brittle. It cannot absorb environmental change and becomes dependent on control, simplification, and denial.

This is where grand strategy and identity become inseparable from viability.

Identity defines what the organisation is willing and able to notice, which options are considered legitimate, and how much variety the organisation can absorb without breaking.

An identity that once enabled advantage can quietly become a liability when environmental variety increases.

When that happens, the organisation does not fail immediately. It drifts. It becomes slower, more defensive, more internally focused, and less able to adapt without a crisis.

Why identity only changes through strategy

This is where strategy actually matters.

Strategy is not the document that sits next to the purpose slide. It is the ongoing act of orientation within an existing set of structural couplings.

A working definition:

Strategy is how an organisation continuously interprets, adapts, and acts within its environment to sustain advantage and maintain viability.

Strategy lives in action, not aspiration.

It works through:

• explorations that test how the environment responds

• trajectories that create direction without locking into end states

• affordances that emerge from changing conditions

• constraints that preserve coherence and ethics

Strategy alters identity indirectly. Each strategic move slightly reshapes the organisation’s coupling with its environment. Over time, if those moves are coherent, identity shifts.

Not because leaders declared it, but because the organisation has become something else in practice.

This is also where many strategies fail.

They are conceived beyond the organisation’s current structural couplings and capacity for variety. When they fail to land, the failure is blamed on execution. Control increases. Processes multiply. Decision rights move upward.

What is actually happening is simpler. The organisation is being asked to absorb more variety than its identity allows.

Netflix: identity changed by altering coupling

Netflix did not become a streaming and content company because it decided to.

It became one because its strategies repeatedly altered how it was coupled it’s external environment, its customers, technology, and content producers.

• DVDs by mail.

• Streaming alongside DVDs.

• Streaming instead of DVDs.

• Original content.

Each move, each coupling reshaped cost structures, data flows, power relationships, and decision rights.

Over time, the organisation became structurally incompatible with its previous identity as a DVD retailer. Its identity changed because its coupling changed. The world learned who Netflix was through repeated interaction, not narrative.

Amazon and IKEA: identity stabilised through constraint

Amazon’s identity emerged from persistent coupling choices. It repeatedly favoured optionality over short-term margin. That decision reshaped its infrastructure, governance, and risk tolerance, increasing its ability to absorb environmental variety.

IKEA’s identity emerged through constraint. Flat-pack design, customer assembly, and standardisation were not branding decisions. They were structural responses to scale, logistics, and affordability.

In both cases, identity stabilised because strategy consistently reinforced couplings that supported viability.

Kodak: when identity constrains variety

Kodak is often framed as a failure of foresight. That misses the point.

Kodak saw digital photography coming. What it did not do was allow digital strategy to alter its structural couplings.

Its economics, incentives, power structures, and success metrics remained tied to the film industry. Digital initiatives existed, but they were constrained by the need to protect the existing identity.

Strategy explored the future. Identity defended the past.

As environmental variety increased, Kodak’s identity reduced its capacity to absorb it. The organisation drifted, not because it lacked ideas, but because it could not earn a new identity through coherent action.

When strategy meets reality

You do not get to choose your identity independently of the environment.

You earn it through repeated interaction. Through the strategies you pursue, abandon, protect, and defend as conditions change.

This is what happens when strategy meets reality, actually means.

Not whether the plan was elegant, but whether the organisation can stay structurally coupled to reality as it moves. Whether strategy reshapes how the organisation interacts with its environment, or whether it remains an internal fiction protected by language.

Grand strategy is not a design exercise. It is a recognition exercise.

It is recognising who the organisation has become through action, what constraints now shape its behaviour, and whether those constraints still support viability and sustained advantage in its ecosystem.

The real test is simple: does your current strategy change how the organisation is coupled to its environment, or does it merely restate who you already are?

• If you want a different identity, change how you are coupled to the external environment.

• If you want coherence, be clear about what you will not compromise when pressure rises.

• If you want sustained advantage, ensure those constraints increase, not reduce, your capacity to absorb variety.

Reality will decide what remains viable.

Your responsibility is not to declare an identity, but to ensure the organisation earns one that can survive contact with its environment and sustain advantage over time.