Strategy
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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 mētis 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.”2 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.”3
Learning Organizations
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.”4 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.”5 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.”6
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.”7 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.”8 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.”9 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.
Management as Domination
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.10 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.11
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 empow
erment for most workers.”12 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.13
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.”14
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.
Stewart Clegg, Chris Carter, and Martin Kornberger, also representing the critical strand in British management theory, took this theme further. They argued that strategy of this type, especially in its manifestation as a corporate strategic plan, could be represented in Cartesian terms as an intelligent mind attempting to lead a dumb and submissive body or as a Nietzschean “will to power,” an attempt to control, predict, and dominate the future.15 This effort was, however, doomed. Strategic plans were often management fantasies, far exceeding organizational capabilities, with goals defined as if the future could be predicted. The effort was bound to fail because of the inevitable gaps between planning and implementation, means and ends, management and organization, order and disorder. Instead of managing these gaps, strategic planning actively generated and sustained them. The practice of strategic planning created “a system of divisions that constantly undermines and subverts the order that the strategic plan proposes.” It created an illusion of “an ordered and cosy realm, as a controllable inside, confronting a more or less chaotic outside, an exterior that constantly threatens its survival. Strategic planning reinforces and deepens this gap: it ignores the complexities and potentialities of ‘disorganization.’ ”
This critique was directed at something of a straw man. Possibly in earlier decades senior managers had really believed in such an orderly and controllable interior world, and had been sustained in this belief by this comforting and ambitious ideology, manifested in a detailed plan, based on ultra-rationalist assumptions, passed down through the hierarchy, and prescribing behavior on almost Taylorist lines. In terms of the grip of economic theory on business schools, the idea that real businesses might try to work this way was not wholly preposterous. It lingered on, in a mild form, with “the balanced scorecard.” Actual management practice, however, suggested a much greater sense of insecurity and uncertainty. Management strategy had become a much more capacious umbrella, including a range of approaches. Some managers might approximate to this caricature but others would be seeking to draw staff into decision-making and were well aware of the distorting effects of attempts at detailed plans with fixed targets.
Fads and Fashions
Mintzberg et al’s influential Strategy Safari identified ten different approaches to the challenge of strategy. Elsewhere the concern was that the disagreements had become so numerous and “fractious” that “scholars despaired that [they] could not even come up with a logically coherent definition of the field.”16 Another described strategy as being in a “pre-paradigmatic state.”17 Yet another saw the source of confusion as a multiplicity of strategies rather than a single paradigm. The word strategy was being attached to every new initiative:
Strategy has become a catchall term used to mean whatever one wants it to mean. Business magazines now have regular sections devoted to strategy, typically discussing how featured firms are dealing with distinct issues, such as customer service, joint ventures, branding or e-commerce. In turn, executives talk about their “service strategy,” their “joint venture strategy,” their “branding strategy” or whatever kind of strategy is on their minds at a particular moment.18
John Kay observed in a skeptical overview that: “Probably the commonest sense in which the word strategy is employed today is as a synonym for expensive.”19
The proliferation of strategies had been both vertical, in the range of subsidiary activities given the label, and horizontal, in the range of both procedural and substantive prescriptions for relating to the environment. The 1980s and 1990s involved a dizzying sequence of grand ideas, the appearance of gurus such as Peters and Hamel, and the rise and fall of BPR. As a result, a new field of research developed around the proliferation of management fashions and fads. Their frequency and variety, the surrounding hype, and their short half-life prompted a degree of wonder at why they were taken at all seriously.20 The management consumer was not confronted with a dominant paradigm but instead with cacophony and inconsistency, hints of unique keys to success that could be accessed by buying the book, attending the seminar, or—best of all—signing the consultancy contract. The ideas came thick and fast, tumbling over each other, the banal with the counterintuitive, genuine insights with implausible propositions, telling insights with dubious generalizations.
There were a variety of explanations for the phenomenon. Gurus helped the managers make sense of an uncertain world and provided a degree of predictability. They also offered an external authority to help legitimize what they were up to. Even the skeptics were anxious that they might be missing out on something, or that they might be perceived to be ignoring important developments. The succession of fads and fashions might have suggested something cynical and even random, but there was always the possibility of actual progress, as if some higher stage of management was really at hand. If so, the conscientious manager at least had to pay attention.21 Nor
was it the case that all products were useless.22 Since Drucker first introduced management by objectives, certain techniques had been introduced that might once have been considered fads but were now considered generally helpful, such as SWOT analysis, the Boston matrix, or quality circles. Even with BPR the problem was in excessive radicalism, demanding too much at once and overstating the benefits. After the 1980s, it was the rare company that would not claim to be aspiring to excellence and quality, looking to encourage local initiative. One legacy was the regular insistence that senior managers were “passionate” about such matters.
The innovations most likely to endure were those that helped senior executives exert influence over the organization. Consider the example of the “balanced scorecard,” first introduced in a 1992 Harvard Business Review article by Robert Kaplan and David Norton. Financial returns, they argued, were an inadequate guide to how well a company was doing. A much broader and also realistic view of performance was required. They understood strategy as being a “set of hypotheses about cause and effect” and proposed that by measuring key effects it should be possible to demonstrate whether or not a strategy was being properly implemented. Goals and appropriate measures should be developed, covering finance, the views of customers, internal organization, and the ability to innovate. This assumed that “people will adopt whatever behaviors and take whatever actions are necessary to arrive at those goals.” The advantages of the balanced scorecard were that it was easy to understand, staff could be involved in its construction, and it improved the information available to management. The key performance indicators (KPIs) would reflect, however, what could be measured—not necessarily what was important—and then become ends in themselves. Staff would meet the goals as measured even if there was no obvious benefit to the organization. Managers who relied solely on monitoring the indicators could be swamped by data that was hard to interpret, fail to understand the complex interactions between the different measures, and still miss vital signs of dysfunction.23 Without being clear on what needs to be done and why, Stephen Bungay pointed out, “the fetishization of the metrics is a near certainty.” Though the scorecard could be a way of communicating intent, it was still fundamentally a control system.24