Strategy Perpetuates the Status Quo

“Strategic planners pride themselves on their rigor. Strategies are supposed to be driven by numbers and extensive analysis and uncontaminated by bias, judgment, or opinion. The larger the spreadsheets, the more confident an organization is in its process. All those numbers, all those analyses, feel scientific, and in the modern world, “scientific” equals “good.”

“Yet if that’s the case, why do the operations managers in most large and midsize firms dread the annual strategic planning ritual? Why does it consume so much time and have so little impact on company actions? Talk to those managers, and you will most likely uncover a deeper frustration: the sense that strategic planning does not produce novel strategies. Instead, it perpetuates the status quo.”

So starts the Harvard Review article (Sept. 2012), “Bring Science to the Art of Strategy.”

I agree entirely with their analysis of the problem; however, I agree less with their solution to the problem. In my view strategy needs logic and magic; the weighting of which depends mostly on the level of change the strategy will require in technology and changes it will require in people.

Logic and magic

In a more predictable market where there are few changes required in either technology or people, a weighting towards logic may be appropriate; however, in a less predictable market (and today most are) more magic is required.

What sort of strategy required?

Today the environment for most strategy processes is requiring a more
“Magic” (sometimes called Wicked) approach; despite this, most strategist rely on the “Classic/Management” approach described above.

There are two schools of thought about the Strategic Process

  1. Logic School – A linear or left brain school
  2. Magic School – A nonlinear or right brain school.

The Logic school is by far the most common, however, on its own it is seriously lacking. It is based on several unspoken assumptions that are highly questionable:

  1. That you can create a powerful vision of the future after thinking extensively about the present. In my experience, thinking too deeply about the present tends to limit the possibilities considered for the vision.
  2. That analysts are the best people to drive the Strategic Process. In my experience Line Managers are far better drivers of strategy because they understand the issues and reality in the market place. They are also the people who must execute the strategies and therefore their ownership is vital. Managers do not have sufficient ownership or understanding when strategies are presented to them by analysts.
  3. That the ideas needed to create a winning strategy do not exist within the organisation and need to be imported from outside. In my experience this is simply untrue. I think it’s vital to have an outsider to lead the Process so they can challenge thinking that is not strategic or innovative enough; but I’ve found the content is always available from within.

TWO SCHOOLS OF STRATEGY

1. LOGIC

Linear
Left Brain Thinking Starts With the Present

Sequence =
• where are we?
• where do we want to go?
• how are we going to get there?

Driven by Analysts Ideas must be imported

Extensive analysis determines strategies

2. MAGIC
Non-linear
Right Brain Thinking Starts With the Vision

Sequence =
• where do we want to go?
• where are we?
• how are we going to get there?

Driven by Line Managers Ideas exist within firm

Extensive analysis to test strategies

Conclusion

Both schools have their strengths and weaknesses. It would be wrong to disregard either; however, in my experience most New Zealand organisations rely far too much on the linear approach. As a result, many strategic workshops are boring, and not nearly as successful as they could be.

Bruce Holland

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