As discussed last week, today we will begin our foray into a number of concepts that, either directly or indirectly, deal with a firm’s raison d’être – or, as it is phrased in the ABCDE framework, its strategic aspiration. In particular, we are going to spend the next couple of months discussing:
· Stephen Bungay’s strategic intent,
· Richard Rumelt’s guiding policy,
· Roger Martin’s where to play/how to win,
· Henry Mintzberg’s strategic perspective,
· Alexander Osterwalder’s business model canvas,
· John Kay’s concept of obliquity, and
· visioning and missioning as detailed by Bob de Wit.
Many, if not all, of these theories are taught at MBA programs around the world for good reason; all companies, regardless of size, have to have some form of underlying ambition that defines the business not least as it tends to be a prerequisite for legal registration.
The definition and application of what the firm is attempting to achieve can be the difference between success and failure. If too broad, the organization may end up pursuing every promising idea that comes along without the patience needed to see any of them properly through. If too narrow, it may lead to objective blindness and a brittle company unable to handle inevitable change.
In The Art of Action: How Leaders Close the Gaps between Plans, Actions and Results, Stephen Bungay introduces his proposed solution. Strategy, in his mind, starts with a series of questions: where are you now, where do you want to be and how will you get there? This, of course, should be familiar to anyone with basic strategic training. Where one is now could be considered a diagnosis, where one wants to be an idealized future state, and how one will get there the strategic plan that bridges the gap.
However, Bungay’s subsequent notion of strategic intent - the foundation needed to answer the questions - does not come out of the traditional school of planning and management control. Drawing on military strategy for inspiration, he instead uses the analogy of mission control.
For those unfamiliar with the distinction, mission control is derived from Prussian army-pioneered doctrine (Bungay explicitly refers to one of its leaders, Helmuth von Moltke the elder). In short, it promotes the combination of centralized intent with decentralized execution, so as to increase speed of action within agreed-upon constraints. Thus, one can say it is a form of planful or directed opportunism.
The argument for strategic intent comes out of the realization that one cannot create perfect plans and that there is therefore no point in attempting to plan beyond the circumstances which one can foresee. Instead, one should start with what the organization wants to achieve in simple terms. Once defined, these intentions are passed along without detailed instruction on what to do or how – but with the encouragement that actions may be adapted according to context so long as they realize the overall strategic ambition. Strategy thus rather eloquently becomes a matter of ‘the evolution of an original guiding idea under constantly changing circumstances’.
To long-time subscribers, this may appear reminiscent of my (independently developed) concept of directional opportunism, and it is true that they are quite similar in many regards. But while I am a proponent of coherence (two lines in the sand) over alignment (one line in the sand) for practical strategic and managerial purposes, Bungay argues that alignment is very much the ideal outcome. In fact, he goes so far as to say that the more alignment one has, the more autonomy one can grant; alignment should be achieved around intent (what to achieve and why), while autonomy should be granted around actions (what to do and how).
Though the difference may appear small in theory, it has significant implications in practice. Alignment relies on likeminded thinking. Bungay considers this to be not only a positive but a direct consequence of rationality (he argues that strategic thinking is a matter of going round the loop between aims, opportunities and capabilities in rational analysis) in a staircase model of logical steps that, eventually, lead to a desired end-state.
However, emphasizing alignment on the merits of assumedly consistent rational analysis over all else creates, in my view, a number of potential issues (ranging from strategic predictability and lack of diversity to an overemphasis on that which is measurable at the cost of that which matters most). One might also note that there are no such things as organizational end-states outside of exits, be it via acquisition, merger or bankruptcy.
As a result of his emphasis on rationality and logic, Bungay ends up relying quite heavily on traditional goal setting, which in turn has the unfortunate consequence of easily turning the exercise into a modern version of management by objectives. Although he correctly notes that MBO turned management practices into corporate processes – the result of which we can see today as more and more items of business become automated and human judgement is removed from the system – replacing them with so-called best practices such as SMART goals is not exactly a massive step in the opposite direction. In fact, many have taken this to justify the reduction of his book into pithy eight step laundry lists of objectives. Though that is perhaps not his intention, it is nonetheless a result.
Anyway, in order to secure alignment, Bungay then adds what he calls back briefing to the concept of intent. In theory, he argues, this process (brief teams, have them repeat the why and what of the strategic intent in their own words and add their own how, then provide feedback) should enable more or less an entire organization to become self-organizing around independent decisions on the basis of a shared intent and high mutual trust (as per mission control 101).
In practice, I counter-argue, this may not only be gamed as employees are more likely to tell their superiors what they want to hear than what they think is the best way forward, but also somewhat undermines the original point about autonomy and independence. While I will concede that ‘successful’ autonomy hinges on the capability of the employee, which may be lesser or greater, there is an underlying (almost paternalistic) assumption in back briefing that management knows best. Sometimes they will, other times they will not. This is particularly true in the context of organizational predictability vs the organization’s ability to predict. A proposed course of action rejected on the grounds that it fails to meet management’s ideas of alignment based on rational logic may turn out to be the optimal solution in a situation that they simply could not imagine. Employees often fail to see the forest for the trees, but executives often fail to see the trees for the forest.
Since critique can be misinterpreted as dismissal, I need to emphasize that I rate Bungay’s work very highly. It is indisputably an excellent and much needed addition to strategic doctrine. The key tenets of mission control that are echoed in his methods – e.g., cohesive teams built from mutual trust, shared understandings, clear intent and adaptation to context – are all highly valuable to strategists and I have personally used them to great effect in client work. I have also found practical use of what he calls anti-goals (‘don’t do this’).
My concerns are with the formulaic mindset and defensive decision-making that may (from my experience often does) follow from calls for alignment and demands for rational measurability thereof. At the end of the clichéd day, civilian organizations are not identical to military organizations, nor is even military strategy in the relatively ordered wars of centuries past the same as military strategy in the complexity of warfare from the Vietnam conflict onwards. There is also a conversation to be had about planning for the circumstances that one can foresee and the potential short-termism it may cause. But, on the whole, strategic intent does undoubtedly provide a very good starting point.
Next week, we are going to dig into Richard Rumelt’s similar notion of guiding policy to see what the differences end up being when one does come from the traditional school of management control.
Until then, have a lovely weekend.
Onwards and upwards,