Strategy (101 page)

This is why corporate claims of higher purpose were often treated cynically. Occasional transformational change might be exciting, but too much could also be exhausting. Some calm and stability might be welcomed. Structure, discipline, and accountability were necessary for the innovative to make changes and then sustain them. Many employees would assume their senior management should work out the strategy and would prefer not to be badgered for new ideas that were then ignored. The need for an antidote to the soaring rhetoric of the gurus and the exaggerated claims of the consultants was reflected in the popularity of Scott Adams's subversive cartoon strip “Dilbert” with its world of persecuted engineers, fantasizing marketeers, stupid bosses, and greedy consultants. Consultants, Adams observed, “will ultimately recommend that you do whatever you're
not
doing now. Centralize whatever is decentralized. Flatten whatever is vertical. Diversify whatever is concentrated and divest everything that is not ‘core' to the business.” In Dilbert's world, companies needed strategies “so the employees will know what they don't do.” Dilbert explained how he put together a strategy: “I collected
optimistic data, put it in the context of bad analogies, seasoned it with saliency bias … added herd instinct, a pinch of confirmation bias.” When his company announced that it would abandon a strategy of making good products in favor of a “desperate strategy of mergers, business spin-offs, fruitless partnerships, and random reorganizations” and an accelerated “program of paying the good employees to leave,” the stock price went up by three points.
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If many remedies are prescribed for an illness, you may be certain that the illness has no cure
.

—Anton Chekhov,
The Cherry Orchard

T
HE QUESTION OF
whether senior management really could give a business strategic direction was turned into one of the more influential dichotomies in the field, that between deliberate or emergent strategies. Henry Mintzberg, who was responsible for the most sustained challenge to the so-called design model of strategy, stressed the possibility of a continuing, intelligent learning response to a changing environment. In a seminal article with James Waters, Mintzberg urged that instead of considering strategy as a single product, handed over to others for implementation, it should be understood as a “pattern in a stream of decisions.” On this basis they distinguished between “intended” and “realized” strategy. If what was realized was intended then this was “deliberate”; patterns that were realized despite of or in the absence of intentions were “emergent.”

A deliberate strategy depended on the intentions disseminated in an organization being precise, so there could be no doubt about what was desired, and realizable. There could be no interference from any external force, whether the market, politics, or technology. Such a totally benign environment, or at least one where the problems could be anticipated and controlled, would be a “tall order.” By contrast, a perfectly emergent strategy would demonstrate
consistency in action in the absence of intention. While a total absence of intention was hard to imagine, the reference was to the idea of the environment imposing a pattern of decision, as if notional decision-takers could not help themselves in the face of the structural constraints and imperatives they faced. Innumerable small decisions taken throughout the organization could move it to an unanticipated place, to the surprise and possible consternation of senior management. In practice, the sharp distinction was between a strategy that involved central direction and control based on an original plan, a model which Mintzberg considered extremely unwise, and one that was about learning and adaption.
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The idea of organizations being able to stick to an original plan in the face of uncertainty was easy enough to challenge. In some respect, all strategies were bound to be emergent. There was always a previous history, which had shaped the original plan, and even a strategy that had emerged and seemed to be working would at some point have to be addressed, if only because a particular goal had been reached. Mintzberg's main point therefore was about the need for the organization and its leadership to keep on learning. Just like the m
ē
tis of ancient Greece, this learning, flexibility, and responsiveness would be particularly important when an environment was “too unstable or complex to comprehend, or too imposing to defy.” It was likely to require a degree of experimentation, or surrendering some control to those closest to situations who had the best information to develop realistic strategies. This was not to deny the importance of managers at times imposing their intentions and providing a sense of direction.

Mintzberg's careful conclusion was that “strategy formation walks on two feet, one deliberate, the other emergent.” His heart, however, was clearly with the emergent, perhaps because it required more of the organization and was a surer test of its structures. An organization capable of benefiting from the experiences and insights of all its members should be in better shape than one where all the running had to be made by senior management. After the 2008 financial crisis, he bemoaned the consequences of “the depreciation in companies of community—people's sense of belonging to and caring for something larger than themselves.” Human beings were social animals who could not “function effectively without a social system that is larger than ourselves.” Communities were “the social glue that binds us together for the greater good.” Admired companies managed to create this sense of community, and to this end he cited an article by the president of Pixar (an animated film production company) who attributed his studio's success to its “vibrant community where talented people are loyal to one another and their collective work, everyone feels that they are part of something extraordinary,
and their passion and accomplishments make the community a magnet for talented people coming out of schools or working at other places.”
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Instead of the celebrated form of heroic egocentric leadership, an alternative sort was needed that was “personally engaged in order to engage others, so that anyone and everyone can exercise initiative.” This required shedding “individualist behavior and many of its short-term measures in favor of practices that promote trust, engagement, and spontaneous collaboration aimed at sustainability.”
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Mintzberg was by no means unique in celebrating “learning organizations.” One justification was organizational efficiency: those with a commitment to knowledge, mechanisms for renewal, and openness to the outside world should perform more effectively. Another was that organizational life should be an uplifting social and collective experience, “a group of people working together to collectively enhance their capacities to create results that they truly care about.”
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As individuals did the learning, a firm which aspired to be a learning organization “must teach its employees how to learn, and it must reward them for success in learning.”
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These twin objectives reflected the ambition of the human relations school. If work became a positive experience, a source of personal fulfillment, it could serve the organization by also serving the individual, marrying humanism with bureaucratic efficiency. This was reflected in the rhetoric of Peters and Hamel. Charles Handy, a British management consultant and another enthusiast for this approach, described a learning organization as being about “curiosity, forgiveness, trust, togetherness.”
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One book took these ideas to the extreme, advocating
Strategy without Design
. Rational, deliberate, strategy-making directed at specific goals was naïve, failing to grasp how actions reflected “invisible historical and cultural forces,” unaware of the impossibility of comprehending the whole or the foolishness of attempts to move entities around like chessboard pieces (the favorite image from the master strategist). In practice there were “too many contingencies, too many alternative limits, too many system influences, and the pursuit is too debilitating, for such an intellectualized picture ever to emerge fully.”
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By contrast Chia and Holt, acknowledging Liddell Hart, pointed to the “surprising efficacy of indirect action.” Action that is “oblique or deemed peripheral in relation to specific ends can often produce more dramatic and lasting effects than direct, focused action.”
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This alternative strategy was not
only unintelligible but also discussed without reference to power, deal-making, coercion, or coalition construction. The result was a postmodern version of Tolstoy, with barely perceptible everyday gestures moving big organizations in ways that nobody intended but could still come out right at the end. Rather than success being attributed to “the pre-existence of a deliberately planned strategy,” it could be “traced indirectly as the cumulative effect of a whole plethora of coping actions initiated by a multitude of individuals, all seeking merely to respond constructively to the predicaments they find themselves in.” The wise strategist was advised to avoid the temptation to control and to go with the organizational flow. Chia and Holt called this “strategic blandness,” involving a “will-o'-the-wisp endurance that invites no opposition and assumes no domination; it exists only in the plenitude of as yet unrealized possibilities.” The aim should be “to shy away from once fervid ambition and stringently held commitments and, instead, nurture a curiosity whose meandering enquiry moves through infatuation, temperance and indifference with equal passion.”
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As “sensemaking,” this left a lot to be desired. It was also some distance away from the more prosaic reality of organizational life for most people most of the time.

Theories of strategy that lacked a theory of power were bound to mislead. With enthusiasm for organizations as learning and mutually supportive communities could come reluctance to address issues of power. If anything, organizational politics was deplored for its disruptive effects. Power plays by individuals promoting their own careers or just their pet projects generated bad feeling. This could be detrimental to overall efficiency as well as to morale. Power certainly could become an end in itself, a source of status and opportunities to boss others around. Nonetheless, it was also the case that without power it was hard to move organizations toward particular goals and little of value might be accomplished. With a grasp of power, bad decisions might be implemented too rigorously, but without such a grasp potentially good decisions might not be quite taken or followed through. Power structures within organizations, even more so than in states, would depend on personalities and culture, on social contacts as well as personnel contracts, on the reputation of particular units, and on the way budgets were put together and expenditures monitored. Addressing issues of power was not a strategy in itself but an unavoidable part of strategy. It meant considering how decisions might best be formed and implemented.

Jeffrey Pfeffer, one of the rare writers on organizations to make power his main focus, largely advised on the sources and exercise of power, emphasizing the importance of understanding the main players who need to be brought on board, acquiring positions on key committees, exercising a role over budgets and promotions, gaining allies and supporters, and learning how to frame issues to best advantage.
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A later book provided guidance on how to succeed with power in organizations, including advice to beware of the leadership literature, with its “prescriptions about following an inner compass, being truthful, letting inner feelings show, being modest and self-effacing, not behaving in a bullying or abusive way,” which explained how people wished the world to be rather than how it was.
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Critics of the more optimistic views of management picked up on their naïveté about power. Helen Armstrong described the “learning organization” as a “Machiavellian subterfuge” to encourage workers in their own exploitation. The “prevalence of insecure job markets, contract and part-time work, outsourcing and downsizing is hardly conducive to feelings of empowerment for most workers.”
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Even when there was evidence of shared meanings and values these were most likely to reflect the perspectives of senior management. What might be thought of as a benign culture could appear in a different light as a hegemonic project. Issues of power and ideology could not be avoided.
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This view formed part of a critical theory, influenced by postmodernism, that considered corporate strategy a natural target because it presented itself as a very modernist project, seeking to manipulate causes to achieve defined effects in a rational way. On this basis, strategy was an example of thinking that concealed more than it revealed in order to support established power structures. Individuals and what they said and did could not be understood outside of their social context, which was in turn reshaped by what they said and did. In one Foucault-inspired critique, reflecting a postmodern insurgency in British management schools, David Knights and Glenn Morgan challenged the idea of strategy as a set of rational techniques for managing complex businesses in a changing environment and instead proposed “focusing upon corporate strategy as a set of discourses and practices which transform managers and employees alike into subjects who secure their sense of purpose and reality by formulating, evaluating and conducting strategy.”
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In this strategy was not a general approach to the problems of management but a specific corporate ideology. Thus they asked: “If strategy is so important, how did business manage to survive so long without ‘consciously' having a concept of strategy?” Somewhat oddly, given Foucault's
own extensive references to strategy, they criticized early writers, such as Chandler, for imputing “strategic intent to the business world as if it existed prior to practitioners having subscribed explicitly to the discipline of strategy.” The crime, apparently, was for the academic to act as legislator, telling people what they really meant in a way which might be quite different from the actors' “own discursive understanding of their actions.” This meant neglecting the interesting question of what people actually meant when they talked about strategy or whatever other descriptor they used for activity that an observer might consider to be strategic. Knights and Morgan argued that strategy only became important as the corporation had to explain what it was doing and why to internal and external audiences. It was about legitimizing the elite as much as deciding upon a course of action. The “discourse of corporate strategy” constituted “a field of knowledge and power which defines what the ‘real problems' are within organizations and the parameters of the ‘real solutions' to them.” It was a “technology of power,” enabling some actors while disabling others, and a source of “the problems it professes to resolve.” As such it might have been challenged by alternative discourses, for example, reflecting more instinctive and or less hierarchical approaches or else the indifference and cynicism prompted by top-down pronouncements. For the discourse of strategic management to have become so embedded was a “triumph.” It sustained and enhanced the prerogatives of management and gave them a sense of security, legitimized their exercise of power, identified those able to contribute to their discourse, and rationalized success and failure.