Strategy (102 page)

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.
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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.

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.”
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Another described strategy as being in a “pre-paradigmatic state.”
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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.
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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.”
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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.
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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.
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Nor was it the case that all products were useless.
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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.
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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.
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A study of sixteen management fashions from over five decades suggested that over time they had become “broader-based but shorter-lived and more difficult for upper management to implement.”
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When a particular management technique was adopted, few effects on organizational performance could be discerned. Nonetheless, adoption did influence corporate reputation and even executive pay. The research strengthened “previous arguments that firms do not necessarily choose the technologically best or most efficient techniques but, instead, seek external legitimacy by adopting widely accepted and approved practices.”
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Other research suggested that the new ideas that seemed to catch on were considered to be capturing “the zeitgeist or ‘spirit of the times.' ”
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An analysis of the conceptual development of the word
strategy
gathered ninety-one definitions for the period from 1962 to 2008. Looking at the way nouns were used, the authors observed an abrupt drop in
planning
, a rise and then steady decline in
environment
, with
competition
showing a steady increase. While the verb
achieve
was a constant, over time
formulate
gave way to
relate
.
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This interest in the role of fads and fashions in enterprises reflected awareness that strategy could not be considered as a product, something that in the form of an input might give direction to an organization or as an output that might order relations with the external environment, but as a continuing practice, the everyday work of many people (not just those at the top) within an organization. Strategy was not the property of organizations but
something that people did. This led to the idea of “strategy as practice.” This was a natural continuation of the work of organizational sociologists and psychologists, such as Weick, with their interest in the disparate experiences and aspirations of individuals bound together by the demands of employment and developing social forms that were more or less creative or destructive, both for them and the broader purpose the organization was supposed to serve. It could bring together the macro-level of the institution with the micro-level of the individual with guidelines for observational research.
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One unfortunate consequence of the focus on strategy as practice was to encourage the use of the verb
strategizing
, meaning “to do strategy.” It also encouraged the idea that this was a ubiquitous activity, “to the extent that it is consequential for the strategic outcomes, directions, survival and competitive advantage of the firm.” This therefore involved multiple actors at all levels.
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Strategy “practitioners,” including managers and consultants, would draw on the established strategic “practices” particular to their organizations, turning these into a specific strategic “praxis” as they engaged with others to generate something called strategy, which in turn reshaped the organizational practices.
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This challenged the idea of strategy as a deliberate, top-down process that was the purview of senior management. As soon as questions of implementation came in, it was evident that micro-level decisions could influence the macro-level performance. This was at the heart of the familiar critique of the strategic planning model. That was not the same, however, as organizations effectively being managed from the bottom up. The decisions of senior managers, for better or worse, more or less influenced by what they understood to be the character of organizational practices, were still normally much more significant than those further down the hierarchy thanks to their reach and the resources at their disposal. Strategy as practice was important when it came to understanding organizations, but so too was strategy as power.

What about strategy as “sensemaking”? If there was one persistent theme it was the attraction of a good story to help convey the most important points. This was evident in Taylor's story of the hard-working Schmidt, Mayo's of the Hawthorne experiment, or Barnard's unemployed in New Jersey. It was behind the whole reliance on the case study method, underscoring the view that the best way to understand the challenges of management was to try to tell a tale around a specific set of circumstances. In much of the organizational
literature, as a methodological contrast to rational actor theory, stories were elevated to a vital source of organizational communication and effectiveness.
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This could draw on psychological research which confirmed their importance as ways of explaining the past but also convincing people about future courses of action. With businesses no longer run on military lines and employees expecting to be persuaded rather than just instructed, managers were urged to use stories to help make their case. “Gone are the command-and-control days of executives managing by decree,” observed Jay Conger in 1998, for now businesses were run “largely by cross-functional teams of peers and populated by baby boomers and their Generation Y offspring, who show little tolerance for unquestioned authority.”
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“Stories are the latest fad to have hit the corporate communications industry,” observed columnist Lucy Kellaway. “Experts everywhere are waking up to the something that any child could tell them: that a story is easier to listen to and much easier to remember than a dry string of facts and propositions.”
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Stories made it possible to avoid abstractions, reduce complexity, and make vital points indirectly, stressing the importance of being alert to serendipitous opportunities, discontented staff, or the one small point that might ruin an otherwise brilliant campaign. Stories were to the fore in Weick's account of sensemaking, allowing “the clarity achieved in one small area to be extended to and imposed on an adjacent area that is less orderly.”
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Peters and Waterman came to appreciate through successive briefings that their ideas worked with business audiences as stories but not as charts and diagrams. They described how their excellent companies were “unashamed collectors and tellers of stories … rich tapestries of anecdote, myth, and fairy tale.” Many business strategy books were essentially collections of stories, each intended to underline some general point.