Here we are, at the midpoint of our breakdown of theories central to the concept of strategic aspiration in the ABCDE framework. So far, we have covered Stephen Bungay’s strategic intent, Richard Rumelt’s guiding policy and, last week, Roger Martin’s Where to Play/How to Win – the last of which attracted highly valuable (and appreciated) feedback by the esteemed creator himself. Coming up, we have Alexander Osterwalder’s business model canvas, John Kay’s obliquity, and visioning and missioning as detailed by Bob de Wit.
First, however, we are going to take a look at one of the parts of Henry Mintzberg’s famous 5P model: the strategic perspective.
Although he undoubtedly stands among such strategy giants as Drucker, Porter and Martin, Mintzberg’s work remains largely unknown to most without strategic management training; in marketing and advertising, for example, it is seldom discussed. Though one may only speculate as to why, part of the reason may be the perceived need for planning in said disciplines and his scathing critique thereof provided in The Rise and Fall of Strategic Planning.
Either way, given the wide range of readers who give up a few minutes of their free time every week to read my incoherent ramblings, there may be a point to introduce some of his views before we get to the topic of the day.
Although Mintzberg’s resume is roughly the size of a 1980’s phonebook, he is perhaps most popularly known for establishing (together with James Waters) the notions of deliberate and emergent strategies. There is plenty on the topic in Strategy in Polemy, but for the purposes of this newsletter, deliberate strategy is the top-bottom approach with which most will be familiar. It puts the strategist firmly in the realm of classic strategic planning where one carefully considers what to do and then does it. As an intended course of action, the plan will detail how to get from a present point A to a sought-after point B and include both ends and means.
In reality, though, strategic plans are regularly diverted from or completely ignored, be it out of necessity, incomprehension or ignorance. A set of actions instead ‘emanate’ as the organization learns what works in practice.
Practitioners are likely to know this only too well. Theorists need but look at their own analyses; more likely than not, they will describe consistency in past behavior – a pattern in action over time. This should not come as a surprise. After all, If strategies can be planned and intended, it follows that they can also be pursued and realized (or not realized, as the case may be). A strategy realized as intended will per definition be deliberate. If it is realized despite, or in the absence of, intentions, it is considered emergent.
Although proponents of each approach have proven to be more than willing to argue that theirs is the one to rule them all, no strategy will be entirely one thing or the other. For a deliberate strategy to be executed precisely as intended, there would have to exist complete control without interpretation or interference. For a strategy to be perfectly emergent, there would have to be consistency despite the absence of intentions (a lack of consistency would equate to a wholly unrealized strategy or no strategy at all).
In practice, strategies require foresight and insight, and acknowledge both the intent and the result. In turn, Mintzberg argues, this means that companies should balance five ‘interpretations’ of strategy and their interrelationships:
Although the paper that introduces the model is worth reading in full for anyone who wants to dig deep, we will, as noted above, focus on one of interpretation in particular here and now – the strategic perspective.
In an idiomatic nutshell, the perspective establishes the company way of doing things, or what Peter Drucker might have called its concept of business. Contrary to positioning which seeks to define the company relative to an external environment, a perspective looks inside the organization and establishes its way of perceiving the world:
‘Some organizations, for example, are aggressive pace-setters, creating new technologies and exploiting new markets; others perceive the world as set and stable, and so sit back in long established markets and build protective shells around themselves, relying more on political influence than economic efficiency. There are organizations that favor marketing and build a whole ideology around that (an IBM); others treat engineering this way (a Hewlett-Packard); and then there are those that concentrate on sheer productive efficiency (a McDonald’s).’
Strategy in this interpretation, Mintzberg notes, is an invention of sorts; a creation of imagination to enable regulation of behavior before the event, or infer descriptive patterns after it. However, for it to serve a corporate (and therefore strategic) purpose, it has to go beyond the individual; what matters is a plurality of individuals united in common thinking and behavior.
It all sounds rather lovely in theory. But the key question, at least for those of us more interested in the pragmatic aspects of strategy-making than its abstractions, is what it all amounts to in practice. Looking inside the head of a metaphorical strategist that somehow represents the entire company is easy enough on a page, but a different matter entirely in reality.
To his credit, Mintzberg provides a few illustrations to his point. McDonald’s introduction of Egg McMuffin, for example, was in his view a success because ‘the new position was consistent with the existing perspective’ – it moved the company into the breakfast market while still very much ‘being McDonald’s’.
Changing position within a perspective is, he argues, a relatively small matter. Changing perspective even while maintaining position, however, is not. Changing both is a recipe for disaster. Something like Orange McDuckling, or ‘McDuckling à l’Orange’, would thus inevitably have been a failure.
The problem, of course, is that there is absolutely no way of knowing whether it would have been. While it makes for casual nodding along, it is little more than an easy-to-claim but impossible-to-disprove point. To make matters worse, this is a reoccurring issue.
‘Consider the example of the Honda Company, which has been described in one highly publicized consulting report as parlaying a particular perspective (being a low cost producer, seeking to attack new markets in aggressive ways) into a plan, in the form of an intended position (to capture the traditional motorcycle market in the United States and create a new one for small family motorcycles), which was in turn realized through an integrated set of patterns (lining up distributorships, developing the appropriate advertising campaign of ‘You meet the nicest people on a Honda’, etc.). … But a closer look at Honda’s actual behavior suggests a very different story: it did not go to America with the main intention of selling small, family motorcycles at all; rather, the company seemed to fall into that market almost inadvertently. But once it was clear to the Honda executives that they had wandered into a lucrative strategic position, that presumably changed their plan. In other words, their strategy emerged, step by step, but once recognized, was made deliberate. Honda, if you like, developed its intentions through its actions, another way of saying that pattern evoked plan. Of course, an overall strategic perspective (Honda’s way of doing things) seems to have underlaid all this.’
Although the conclusion appears to intuitively make sense - the behavior of complex adaptive systems such as firms does indeed emerge - the underlying reasoning is rather wobbly, with precious little evidence amidst the numerous assumptions. Whether we can know is here besides the point; to surmise that a company has a perspective based on its behavior in retrospect is a bit like drawing conclusions about a forest based on foliage observed from a distance. It is all very nice if you want to paint a picture, but not particularly helpful if you have been tasked with creating an ecosystem.
If an organization can be defined as collective action in the pursuit of a common mission, as Mintzberg argues, then the question of how the mission is defined and shared has to be raised. That strategic perspectives exist is otherwise merely an academic declaration of plus ça change; the company is what it became and will be. Theoretically accurate, perhaps, but practically pointless.
His answer unfortunately does not provide much help. Honda, he deduces, tried various things in its formative years and gradually ‘consolidated a perspective around what worked’. Sure. But how would they, or anyone, know when said consolidation had been done? If strategic perspectives really were immutable as Mintzberg claims, companies would lose the ability to adapt entirely the moment theirs, so to speak, officially emerged.
What is more likely is that strategic perspectives are temporal. At any one moment in time, organizations have an idea of what works. Over time, that idea may prove more or less stable but, crucially, it is perpetually changing. Honda may have a more informed perspective today than yesterday, but not as informed as it will be tomorrow.
For strategic perspectives to be practically useful, they have to be more than a post hoc statement - an offensive philosophy rather than armchair quarterbacking - and the easiest way to address that might just be to tie them to the overall business model. Next week, we will therefore have a look at to what degree Alexander Osterwalder’s business model canvas can help us further. Until then, have a lovely weekend.
Onwards and upwards,