Friends,
I hope that all is well with you and yours, and that this e-mail finds you on a boat with shoddy connection, in the tropics, three months after I sent it.
Your company could be here.
I am, for the first time, opening up to newsletter sponsorships. For more information about how to put your brand in front of thousands of highly skilled, highly engaged professionals, send me an email. First come, first served.
Now accepting keynotes for 24Q2-24Q3
Every year, I create three main presentation decks. For 2024, they are:
What to Do When You Don’t Know What to Do: How to turn uncertainty into a competitive advantage. (Based on my new book by the same name.)
Regression Toward the Meme: Why modern leadership falls into old traps - and how to avoid them.
The Efficiency Illusion: How to uncover the hidden costs of digital commerce and create profitable growth.
If you want to book me for your event, corporate speaking slot, or workshop, merely send me an email. To make sure I am available, however, please do so at your earliest convenience; my availability is limited and the schedule is filling up fast. More information may be found here.
A couple of updates before we go-go
A particularly hectic week; an intense mix of client work, pitch preparations, speech writing, book writing, barbershop visits, ultrasounds (we are having another girl; FUCK YES), and parenting.
Thus, moving very swiftly on.
2024.3.a
The undeservedly unknown
Part I: William Starbuck
If you utter the name Starbuck, most people (strategists included) are likely think you are yearning for an overpriced cup of what Americans believe qualifies as coffee. Alas, William “Bill” Starbuck has nothing to do with the American behemoth that seeks to “inspire and nurture the human spirit”.
Starbuck’s career is nearly as impressive in academic terms, though. He began with an AB in physics at Harvard, after which he received an MS and PhD in industrial administration at Carnegie Institute of Technology; he has since also been awarded honorary doctorates by universities in Stockholm, Paris, and Aix-en-Provence. Beyond a couple of books - one of which, The Handbook of Organizational Design, was awarded Business Book of the Year in 1982 - he has published more than 170 articles on topics as wide-ranging as accounting, bargaining, business strategy, computer programming, decision making, organizational design, scientific methods, and social revolutions. Today, 89 years old, he is still teaching and researching.
And yet, not that many strategists are familiar with him, relatively speaking. I am not saying he is a complete unknown, obviously, that would be silly. But far fewer know his body of work than it deserves.
The reason, I suspect, is that Starbuck has a penchant for attacking three things in particular: formalization of the kind that is often taught and/or sold, the lack of realism in academia, and the lack of skills among practitioners. None is likely to do him any favors with the broader populace.
Take, for instance, the opening paragraph from Strategizing realistically in competitive environments:
Statistical evidence indicates that formal strategizing makes insignificant contributions to profits. First, formalization undercuts the value of strategizing. Second, nearly all managers hold very inaccurate perceptions of both their firms and their market environments. Third, no one can forecast accurately over the long term. Fourth, fundamental barriers make it very difficult to attain high profits through strategic actions.
For a professor of strategy, it is an unconventional approach to take - and for good reason. Given that formalization is such a fundamental part of the dominant strategic paradigm, questioning its merits is not only pretty much guaranteed to cause unwanted cognitive dissonance, but also to ensure that the work upon which he relies professionally is not broadly distributed.
Indeed, if a business model, whether a faculty or consultancy, is centered around the idea of formal planning, attacks on formalization is equal to an attack on the system. The simplest defense for the powers that be is suppression.
While I am not saying that the man has conspired to push him down, nor that Starbuck would be the only, first, or last to criticize conventional ideas (many others have done and do the same; Henry Mintzberg being perhaps the most famous), it is indisputable that his work has been read a lot less than it ought to have been. This is a shame, particularly given how it often is much more pragmatic than that produced by his more cited contemporaries.
To illustrate, in Teaching strategists to take advantage of what happens, Starbuck writes:
Strategy courses advise managers to talk about the availability of similar products from other suppliers, about competitors’ likelihood of imitating their products, or about whether their strategy has sufficient focus. Real-life managers are talking about more concrete issues such as last quarter’s financial results, a price increase for raw material, or possibly an invitation to merge with another firm.
At first glance, there is nothing revelatory in the text; anyone with even the briefest experience will already know (probably only too well) that of which he speaks. But the passage marks an important distinction of discourse, away from the conventional notions of strategy that are based on the world as management theorists would like it be, and towards the practical realities of the world that is.
Theory matters immensely; it is only when we know it intricately that we can start to understand and scale the pragmatics. But academics often ignore the everyday side of strategy, either because they have no interest in it, have no experience of it, or fail to see how it would differ from theirs. After all, in theory, there is no difference between theory and practice. But in practice, there is. Starbuck, to his credit, has always recognized this.
Granted, his take-no-prisoners approach has undoubtedly pissed off more than a few practitioners as well. In the first aforementioned paper, for example, he notes:
Two studies have inadvertently produced disquieting evidence about the accuracy of managers’ perceptions of their market environments. Both studies asked middle and top managers to describe the stabilities of their markets. They then compared these perceptions with stability indices calculated from the firms’ financial reports and industry statistics. The correlations between managers’ perceptions and objective measures were all near zero and were as likely to be negative as positive. … Most surprising was that managers’ perceptions of variables specifically related to their areas of specialization were no more accurate than other managers’ perceptions of those same variables. That is, managers with sales experience were as inaccurate in their estimates of sales-related variables as managers without sales experience.
In principle, by playing one person’s error off against another’s, firms might compensate for the biases of individual people. However, firms often amplify biases. First, misperceptions are often shared. Some get their unrealistic perceptions by talking with their colleagues. Second, organizations emphasize communication, and easily communicated ideas oversimplify. Third, formal strategizing encourages managers to construct rationalizations for their actions before the fact. These rationalizations then have to be reconciled with actual events, through processes that involve much distortion. Fourth, people’s careers depend upon the evaluations of strategic actions, so managers strive to conceal bad outcomes. Fifth, social pressures induce managers to espouse positions dishonestly. Sixth, firms’ formal reporting systems foster misperceptions by emphasizing financial and numerical data, by highlighting successes and rationalizing failures, and by crediting good results to superiors. Finally, top managers’ perceptions get more weight than those of subordinates even though top managers have much less contact with current markets and technologies than do their subordinates. Top managers also get much of their information through channels that bias upward messages to de-emphasize bad news and to emphasize good news. Indeed, people in hierarchies listen to their superiors more than they do to their subordinates, and they talk to their superiors more than they do to their subordinates. Thus, top managers mostly hear echoes of their own voices.
But in my world, it is precisely because he is as happy telling his peers that they are useless as he is telling professionals that they are too that he is worth reading. You may not always agree with Starbuck, but you would be hard-pressed to argue that he is not, at least, coming from a position of honesty and integrity.
And really, that is as good a starting point as any.
Next week, we are going to continue our look at the undeservedly unknown with another person who has largely flown under the radar. In the meantime, I hope that you have a look at Starbuck’s work - and have the loveliest of weekends.
Onwards and ever upwards,
JP
This newsletter continues below with additional content exclusive to premium subscribers. To unlock it, twice as much content, an e-book, and more, simply click the button below. If you would rather try the free version first, click here instead.