WP3TAT6MCY69 - Technorati claim code, please ignore Why bother having a strategy? It's a fair question, after all many companies have failed with solid and effective strategic plans in place and many have thrived without them.  There is even great debate within the strategic management academic community as to whether a strategy should be developed and followed (called deliberate strategy) or whether it emerges (appropriately emergent strategy) as a result of everything you do anyway. Before I tackle this question it is important to state that this blog is for people in business (probably small-medium businesses who don't like paying for expensive consultants) and not the academic community.  In an academic sense this question is large and this is not the appropriate forum to try and add the required academic rigour to the discussion (you'd get bored anyway). Why bother having a strategy is actually not an easy question to answer in a few words (believe me I have be

I came across this term (pronounced 'her men you tic') in my strategic management PhD travels and was quite intrigued by it as it's both simple (despite its name) and very enlightening.  Hopefully I'll do the simple part justice here!!!! It was coined by  Anthony Giddens , a famous British sociologist, and it reveals a major difference in the way we should (stress on the should) theorise about the natural world versus our social world and of particular interest to me, theories about how we should manage people. In essence, a theory about our natural world has no impact on the natural world which remains the same no matter what we think.  For example it was previously thought that the world was flat (and yes there are some of you still out there) but that didn't change the shape of the earth which remained a sphere (oh yes it is).  This is a single hermeneutic. However in the social sciences this isn't the case and, if for example, a management theory gains su

A blog back on my subject area, strategic planning or strategic management to use the correct term for the academic field. I have been reading an interesting article entitled 'If planning is everything, Maybe its nothing' written back in 1973 by Aaron Wildavsky.  It is almost a fore runner to one of the largest debates in strategic management, whether strategy should be planned and deliberate or it emerges naturally as part of general management activities. The article makes some very interesting points but it does read a little gloomily as though Mr Wildavsky hasn't got a lot of time for planners in general.  His particular interest is planning in the 3rd world (although it wasn't called the 3rd world then) and he observes that in amongst all the money poured into formal plans and planning, the results have been pretty disappointing. It raises another interesting argument/point and that is the difference between the plan and the outcomes.  He appears to be arguing t

I've been reading a couple of articles looking at the concept of management gurus and came across this story which is either outrageous or really clever and I'm still not sure which. In 1995, management gurus Michael Treacy and Fred Wiersema secretly purchased 50,000 copies of their business strategy book The Discipline of Market Leaders from stores across the nation. The stores they purchased from just happened to be the ones whose sales are monitored to select books for the New York Times bestseller list. Despite mediocre reviews, their book made the bestseller list. Subsequently, the book sold well enough to continue as a bestseller without further demand intervention by the authors Bikhchandani, S., Hirshleifer, D., & Welch, I. (1998). Learning from the behavior of others: Conformity, fads, and informational cascades. The Journal of Economic Perspectives, 12(3), 151-170.  The central question for me is just where should we (managers, strategists, leaders e

In order to get stuff done you need sometimes to create a sense of urgency - what can we do by Tuesday?  It doesn't matter whether it is a strategic issue, a work project, study or something at home.  If it needs (or you want it) to get done then getting some focus on it can only help. One of my business clients has a very important strategic issue that needs to be resolved and the impact of what happens will be very, very material to their business.  We have developed a good solid plan of attack (and should win as we have all the cards) but unfortunately it is difficult to get the required people to 'get the lead out'.  An important meeting needs to take place but everyone seems to be busy and we are aiming for about three weeks away, having already waited for two. That is classic lack of organisational urgency.  Contrast it to what the actions would be are if the building is on fire!!!!!  I have tried to speed things up by basically demanding the meeting earlier

Organisations don't operate in a vacuum and so it is important that when organisations engage in strategic planning or thinking they take a good honest look at the industry(s) in which they operate. Michael Porter outlined a technique for industry analysis in his 1985 book 'Competitive Advantage' which was developed into the (hopefully) very familiar model - Porters 5 forces.  Whilst not the only or exclusive tool that can be used, it provides a nice and simple way to look at the prospects of profitability in an industry and can be done over dinner on the back of an envelope (in true entrepreneurial style). Porter’s 5 forces model is a tool for analysing an industry or market to gain an indication of the likely future profitability.  If you are operating in an unprofitable industry, no matter how strategically well positioned you are, it will be difficult to deliver consistent bottom line profitability. The model looks at five critical areas in a market and as

It is interesting how some strategic management models come and go whilst other ones seem to survive the test of time.  In 1985 Henry Mintzberg (one of the leading strategic management thinkers) and James Waters developed a model to demonstrate how the strategy that is ultimately delivered is made of two parts; deliberate strategy (what the organisation set out to do) and emergent strategy (what happened on the way). In their original paper the model looks just a little clunky, word processing not as it is today, but very recognisable for all scholars and practitioners. And although the concept of the model hasn't changed at all, it does look a little funkier with a 'lick of paint'. The model still communicates with a simplicity that belies the revolutionary nature of what it was at the time.  It looks obvious with hindsight that of course we haven't got a crystal ball and the world changes so where we end up is a combination of where we were heade

I recently picked up a very small book in the strategy shelves of my local library.  It was from the Harvard Business Review classics series and it dealt with strategic intent.  I didn't really need to get the book out being quite familiar with the term and having read the book Competing for the Future by Hamel and Prahalad but it just looked appealing so I grabbed it anyway (I love reading about strategy and that doesn't make me a nerd). For me strategic intent is a key part of the actual essence of strategic management and more specifically strategic decision making.  It basically puts a dirty great big stake in the ground about where you want to be in the future (kind of like what you want to be when you grow up).  Once this is established, all actions, tasks, plans, tactics, budgets etc etc need to be moving towards this and not away from it.  There is a nice saying - the only way to work towards an objective is to work towards an objective, you shouldn't head off in

Cognitive frameworks is the area of strategy that I'm particularly interested in and whilst it sounds a bit technical, it is simply the way you see the world.  We all have mental models we use unconsciously to help us interpret the world, without these we would be forced to have to rethink the world for each situation we came across. For example, confronted with a shop, we have a model in our heads about how these things called shops work and as long as the experience we have is in line with our model we can engage quickly and efficiently.  Now go to a shop in a foreign country and things take much longer initially as you have to reinterpret the world to make sure your model works in this slightly altered situation. It is the same when confronted with a problem that is strategic in nature.  If the problem fits one of our existing models of how the world works (for example a new competitor opens nearby) we will try and solve the problem using what has worked for us in the past.

Every now and again you come across a really good quote that is also quite helpful.  The above comes from an exceptionally good review on Managerial and Organisational Cognition by James Walsh   (Walsh, J. P. (1995). Managerial and organizational cognition - notes from a trip down memory lane. [Review]. Organization Science, 6(3), 280-321). More fully 'research suggests that we can be mindful, mindless and out of our minds when taking action in organizations.'  Now space and the amount of time you want to spend reading this blog doesn't allow for a full review on managerial cognition and decision making but in essence the quote isn't quite as harsh as it initially reads. Mindless refers to making decisions without taking into account new information, simply put, following what we have always done despite warning signals.  This situation is also linked to 'cognitive or managerial inertia', where managerial perceptions of what is happening lag behind chang

Strategy and strategic thinking is about the future, what is likely to happen, how the environment will look, what we need to be aware of and therefore what decisions should we be taking today.  It is frequently written that we are in a period of fast paced change and we need to be able to lead and plan in a complex environment under conditions of uncertainty.  The future is unlikely to be an extrapolation of the past so we need to ensure our thinking isn't dominated by projections based on the past. In my travels as a manager and more recently as a consultant I have often come up against a phenomena which I label 'accounting logic', the use of primarily historical financial information as the basis for decision making.  Now I have nothing against accounting and accountants (though some think I have) but the information that they provide can't be given more weight than other sources of information when strategic planning but it often is used as the primary yardstick.

Now this is a management classic both in terms of its relevance and insightfulness.  On the folly of rewarding A, while hoping for B came out in 1975 and I have used it often in my time as a manager and consultant.   Kerr, S. (1975). On the Folly of Rewarding A, While Hoping for B. [Article]. Academy of Management Journal, 18(4), 769-783. In a nutshell (and I encourage you to find and read the article as it is also very well written and therefore an easy read) we behave the way we do in response to a number of factors which are summarised in the following diagram. In nearly all situations in the work environment (and in life in general) there are consequences to our actions.  Some consequences are positive like a pay rise and some are negative like being fired.  It isn't rocket science that we, as individuals, act in a rational manner and try and maximise the positive consequences whilst minimising the negative consequences. This article highlights that often the reward s

I'll try and make this easy to understand as what is usually going on in our heads is a bit of a mystery to everyone including ourselves. Managers get inundated with information all day every day and confronted with problems that require them to somehow pull all the appropriate information together to be able to make solid decisions.  We meet this challenge by employing cognitive frameworks as a means of framing problems in a way that makes sense to us facilitating information processing and decision making. For example, we have a cognitive framework about driving and road rules which has been built up through initial learning and then from practical experience.  This allows us drive efficiently and with confidence as our cognitive framework means we do not have to reinterpret and analyse each situation we encounter.  However, when we first drive in a foreign country we are very aware that we need to take extra caution to understand how the road rules work.  Our cognitive frame

I figure anyone looking for strategy made simple really needed to hear the words - it doesn't exist !!! But before you click away ask yourself if you would ever dream of searching for 'legal advice made simple or 'accounting the quick way' you know you would just be asking for trouble and yet with strategy, which after all is helping set the direction and future fortune of the organisation, we want it in an hour with fries and six pack abs...... If you are reading on then the news gets better because it isn't a dark art either.  You don't need to pay truckloads of money to high powered consultants who will likely just regurgitate from the text book they were given in their MBA programme.  That option to me is the illusion of strategy as if the future is more assured based on the amount of money the advice cost. There is no real short cut and like any business discipline you need a blend of knowledge and experience to really do it well.  Look at the hours

A quick look in the business section of any book store or a search on-line will reveal an absolute multitude of books on strategic management.  Professor Richard Whittington ( a prominent academic in the area of corporate strategy currently at the Saïd Business School of the University of Oxford) said it beautifully at the start of his 2001 book 'What is strategy and does it matter' when he observed that there is a basic implausibility about these books.  If they genuinely offer the secrets of strategic planning, something we pay top executives a great deal of money to perform, why so many books and why so cheap? I can't help likening them to books on sex education where you can gain some of the basics but just by reading the books you will never become expert or even that good, you have to get a little experience...........  Yet the management guru industry and the popular presses churn them out by the score in the same vein as they churn out books on how to get fit the

During my recent PhD reading and thinking I've come to the conclusion that strategy, although lumped in with all the other management areas, is different, fundamentally different.  And because of this it needs to be thought of and treated differently as well and I don't think that is done. Why is strategy different? Two things; It is about positioning the organise in a future environment The competition are doing the same thing so you are competing. A simple analogy is a car race - The team decides what strategy to start with and what to do in the race, every other activity is about keeping the car on the road and making it go faster.  To bring this into a business context, strategy is about what to do and every other activity is about efficiency and effectiveness. For this reason strategy it is a skill set that differs and you really can't just think about it every now and again and hope to be good at it or even competent.  The teams that race cars spend countle

I wasn't going to be doing much posting on this blog as I got busy in my PhD but it happens to be quite a good way to review bits and pieces in the strategic management field and also share them with anyone who is interested. For those interested in business strategy and strategic planning should have come across Henry Mintzberg in your travels.  Not only is he incredibly insightful and has been for decades, he has a very good ability to juggle academic rigour and practitioner applicability and his writing style is understandable, interesting and very engaging. Way back in 1979 he wrote a paper about direct research which is has applicable today as it was then when it comes to thinking about how to effectively research strategic management.  There is a big spilt in this area between; those who believe management research should try and emulate the methods of scientific research; Trying to investigate actors’ subjective processes, because they are considered unobservable in an

Sometimes it seems as though the people involved in strategy must have a rare intellect able to hold multiple conflicting threads of information whilst including future possibilities and probabilities finally coming up with something interesting. But do they really. In a similar manner have you ever wondered how chess masters can play 25 games at a time and still win nearly all of them?  On February 8-9, 2011, Iranian grandmaster Ehsan Ghaem-Maghami achieved the Guinness world record for most simultaneous chess games. He played for 25 hours against 604 players, winning 580 (97.35%) of the games, drawing 16, and losing 8.  A brain the size of Texas....... But this experiment tells us something. First, present a grandmaster and a novice with a position from an actual, but unfamiliar, chess game (with about 25 pieces on the board). After five or ten seconds, remove the pieces and ask the subjects to reproduce it. The grandmaster will usually reconstruct the whole position correctly

As dear old Henry [Mintzberg] said - we are all too frequently presented with aspects of the trivial new at the expense of the significant old.  There have been many clever minds and wonderful papers and articles written on strategic management but often they are forgotten, seen as now out of date whereas they are often principles based and just as insightful today as they were all those years ago. One such paper I struggled to find again, but thankfully did, was written in 1988 by William Starbuck and Frances Milliken  (Starbuck, W. H., & Milliken, F. J. (1988). Executives' perceptual filters: What they notice and how they make sense. In D. C. Hambrick (Ed.), The Executive effect: Concepts and methods for studying top managers (pp. 35 - 65). Greenwich, Connecticut: JAI Press.) on the subject of Executive perceptions.  The reason it is a little hard to get hold of is that it is part of an edited book but I have included the reference above for those keen enough to want to tra

More synonymous with food and drink than thinking and planning, the annual strategic planning retreat is etched onto many organisations calendars.  It is meant to be the place where the company's future direction is discussed, debated and the outcome is a well crafted plan positioning the organisation in the attractive industries of the future.... The problem is that business, opportunities, threats, moments of crisis etc don't wait until you have had your strategic planning retreat.  They come up at random moments and require reaction if the organisation is not going to miss the turn off to the future. Imagine strategy in a military sense, lets wait for an annual planning session to determine how we are going to fight this war!!!!  It just doesn't work does it.  Strategy is more a constant process than an episodic one with information constantly being checked and input into the thinking process.  The key question that should always be in every strategists mind when inf

I used to tell people - hope is not a strategy but I heard a financial analyst on TV and he added the words risk management and I kind of liked it so now it is - Hope is not a risk management strategy. Quite simply, if any of your strategy is based on hope then it is time to rethink your strategy.  Hope and optimism are good things but you can't rely on them and therefore your strategy(s) need to be far more robust.  A client of mine recently experienced a significant change of policy from a key supplier, one that impacted directly on key aspects of their growth strategy.  Their reaction seemed to be 'lets carry on and hope they don't implement' mine was to attack and get that policy changed or change our strategy.  Hope just isn't enough. Imagine a military leader writing a report saying 'we were outflanked but we carried on and hoped we would win the engagement anyway'.  You would expect, as would his/her troops, that the leader would react to this cha

It has been a little while since I have added to this blog, mainly due to business and keeping my more regular blog updated.  I may import these blogs into my main blog over time, we'll see....... It is quite an interesting area of strategy, just how connected or disconnected are the processes of decision making (working out what to do) and implementation (actually doing it).  In the real world of course they are just two parts of ultimately the same question/problem and viewing them as separate doesn't seem on the surface that helpful.  But....... If a strategy fails to deliver the intended outcomes is it a fault of the strategy or the implementation?  Even if a strategy has been fully implemented it may have been done in a sub standard manner. It creates this paradoxical position for the creation of strategy.  Do we limit the position we want to be in the future by our known (or assumed) ability to get there or do we set the "right" strategy knowing that we h

Being an expert and knowing a great deal about a subject area is an advantage, a big advantage.  In business you may know a lot about accounting (if you're unlucky) or law and you can both use this to advantage in your own company as well as for others as a director/advisor/consultant. It is stating the obvious however that an expert in one area is not therefore an expert in all areas.  It does beg the question why we ask our accountant or lawyer for advice on business in general.  Especially accountants who have somehow become seen as more general business advisor's when they remain a limited expert in one area only, an area that faces towards the past and not importantly the future. Letting that go for a minute, I think what is very important is to know what you don't know in areas of business that we sometimes think wrongly are more like common-sense.  Marketing and branding, human resources, IT and (god forbid but yes) strategy and governance are just a few example

Business is now awash with strategy and almost none of it has anything thing to do with strategy.  The word strategy or strategic is just put at the front of existing terms to make them sound mystic and important and it is all basically bollocks.  Goodness knows it is rare enough to find actual strategy rather than check box exercises or the annual rewrite of the mission, vision and values (and I'll return to organisational values in another blog soon as that is an interesting aside). This morning on the business news site I subscribe to I saw the following headline - APN New & Media, publisher of the New Zealand Herald, has appointed Deutsche Bank to undertake a strategic review of its media assets. If we take the word strategic out we have - APN New & Media, publisher of the New Zealand Herald, has appointed Deutsche Bank to undertake a review of its media asset And so the question is of course what is the point of the word strategic except to make it sound impor

There is an absolute truckload of books, journal articles and magazines dedicated to strategic management and strategic planning.  This is quite interesting as it seems most of the great minds in the area recognise that we don't actually know that much about strategy let alone how to do it well. Why so much stuff, because it sells....... There seems to be an insatiable demand for literature on the subject and plenty of authors happy to meet this need.  Just stick "strategic planning" (in quotes) into the book section of Amazon and how many hits are there in the business and investing section?  I'll tell you because I have just done it a jaw dropping 19,013!!!!!!!!! Out of curiosity lets look at some other notable areas: strategy - 33,858 "strategic planning" - 15,140 "performance management" - 1,662 governance - 7,629 "project management" - 6,088 marketing - 427,950 (WTF?????????) leadership - 25,316 Accounting 101,526

I'm still not exactly sure what i will find when I finish my research on 'competent' strategists but from a pretty long and in-depth immersion in the literature I doubt I'm going to find that they all heavily rely on the strategic management tools that have been taught since the 1980's. And certainly it isn't the case that they don't have a place as they absolutely do but they need to be used in association with good, critical thinking  and not a substitute for it. By way of analogy (I love analogies) you can think of the strategy tools as the tools that a yachting crew have available to them when they are sailing in a competition.  They may have weather and sea forecasts, local knowledge of area, tools for working out how fast other boats are going and any number of other tools at their disposal.  BUT........  At the end of all that the decision has not been made until a human being decides what all that means and what we need to do about it. The too

If you have had a nosey around this blog or my other one on working towards a PhD you will be aware that I'm researching strategy, more exactly how good, competent strategists gain the experience and skills they use when they think, act and make decision strategically. To do this I have spent the last three months zipping here and there interviewing strategists who were recommended to me and it has been a fascinating journey and the results are nothing like you would expect.  I'm not ready to announce exactly what the results are yet as I'm just at the beginning of the analysis but as I gain a greater understanding of the material I'll happily share the insights, probably in publications first. One insight I'm happy to share is that from what I've heard strategists do an awful lot of listening and not a whole lot of talking.  If strategists you deal with already have all the answers that is a massive red flashing light. The most clever people I interviewed