Schools of Strategy
In the Yoga world, there is a well-known saying: ‘the least flexible part of the body is the mind.’ This is a wonderful insight into the human condition, and perhaps our foibles, and idiosyncrasies.
We can also look at the mind from another perspective: ‘our thoughts create our reality’ (this wisdom is attributed to the Buddha). Our thoughts, beliefs and assumptions form the boundaries of our ‘known’ world – just as centuries ago, when ‘voices of authority’ said the earth is flat, and one could disappear off the edge.
The parameters of our thinking (and its limiting potential) are as applicable on an organisational level, as on the human plane.
One dimension of Strategy is an exploration of assumptions; these constructs can act like lines or self-imposed boundaries framing the sphere of action – what is possible (imaginable) in either a corporate or non-profit world. And yet as a strategist, I do not often see that much in strategy documents to make implicit assumptions explicit.
The economic crisis, that has grown out of the pandemic, has challenged assumptions in ways that just a short while ago would have been considered highly implausible. And it is amazing how different the world can look when we are temporarily forced to shed our beliefs. And also, how the impossible suddenly becomes do-able, and in rapid time. This week, I heard of major digital transformation programme being delivered in three months, when the original timeframe was three years. Every organisation has similar examples, on large and small scales.
So, what does this tell us about strategy and strategic thinking? And what is the lesson?
If I had £1 for every time I have heard the word ‘strategy’ in the last thirty five years (including my own copious contribution), I would be able to match fund Captain Sir Tom Moore’s magnificent fundraising efforts. However, despite the ubiquity of the term, I almost never hear a word spoken about Schools of Strategy.
What frameworks are being employed to stimulate organisational creativity and to challenge assumptions? What is the organisation doing to look for white space rather than get drawn further and further into reductionist competition? And this point applies just as much to charities, as it does to businesses.
The (lamentable) default is that most of what passes as ‘strategy’ is still regurgitating a type of strategic planning that came to prominence around fifty years ago; its frame of reference were the relatively stable, slow-moving markets of industrialised western countries (1973 Oil Crisis excepted). Does 2020 look much like 1970 in terms of the pace of change?
Although this type of strategy framework is still prevalent, few people could tell you either the author, or school it represents (see Michael Porter – Planning School). This approach is characterised by analysis, intellectual enquiry, and translating strategy into detailed linear plans – or that has become the default application.
This process is then aligned to the budget cycle (led by the Finance function). Then, with the best of intentions, organisations lose thousands of valuable hours each year occupying dozens (sometimes hundreds) of people to construct meticulous lines of plans and costs. These plans are often just a slight variation on what has gone before, because in this ‘world’ there is no time to do any really creative insight. Activity is sometimes put on hold until the budget is agreed. This could almost sound like a joke scenario. Yet, it is the current paradigm of most organisations and businesses. And while all this introspection is underway - the world of supporters and customers is evolving and changing. But is there anyone watching who can do something about it?
I am glad there are some consultancy firms promoting Beyond Budgeting to try and address this issue, but uptake is low – mainly because senior management teams hold on to the assumption that there is no alternative to traditional budgeting, and/or are unwilling to take the perceived risk. Alas, the real risk is sticking with outdated practice.
Modern strategy has to be:
Co-created: with the people who will implement it
Costed: to fit within parameters
Communicable: to inspire the organisation, shape ways of working, and inform reporting of outcomes.
However, the order in which this is done is open to interpretation.
With a bit of preparation, I think a senior leadership team of a large organisation could do an organisational budget allocation in about three hours - a morning’s workshop. And then each function or directorate would have the responsibility to deliver against agreed targets within that budget. And that would kick-start a creative strategy process – rather than the other way around as is currently the norm.
So, here is a list of the strategy schools that have informed my practice – the ones that have stood the test of repeated use in different situations. It is not exhaustive, but I keep finding fresh insight and constructive challenge from these sources and their distinctive contribution. Of course, it is not a simplistic view that one is better than the other. The skill is knowing how to combine the best elements of each as appropriate for the specific context – analogous to a chef being given raw ingredients and producing a delicious meal. Even planning has a place (so long as it’s not counting angels on a pinhead).
Rather than give a synopsis of each – which is easily searchable – I thought it more interesting to give a flavour of the personalities and perspectives by using quotes (with their respective Schools in brackets):
Michael Porter (Planning & Analysis) “The chief strategist of an organization has to be the leader - the CEO.”
Eli Goldratt (Theory of Constraints) “Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link.”
Gary Hammel and C.K Prahalad (Visionary) “The biggest barriers to strategic renewal are almost always top management’s unexamined beliefs” - Gary Hamel. “Strategy is about stretching limited resources to fit ambitious aspirations” - C.K Prahalad.
W. Chan Kim and Renée Mauborgne (Creative) “Create. Don't Compete. Blue oceans are right next to you in every industry.”
Seth Godin (Maverick; Disruptive) “We believe what we want to believe in, and once we believe something, it becomes a self-fulfilling truth.”
Peter Senge (Learning) “Our prevailing system of management has destroyed our people.”
Henry Mintzberg (Emergent) “Strategy is a pattern in a stream of decisions.”
One could criticise this selection as being somewhat dated – and that would be somewhat valid. I considered including my more contemporary influences. The more I thought about it though, I concluded that this selection also carried a subliminal message. The demise of the omniscient strategy guru. This is perhaps another one of the ‘democratising’ influences of the digital and social media era.
If we have learned anything from the pandemic, it is that our unexamined assumptions are constraints to performance (and survival). And next time you discuss strategy, take time to explore the different Schools. And please don’t use ‘strategy’ (as a default process) to produce the minutiae of organisational budgets.
