Are the current models we use for strategy making broken?

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Permalink Reply by Eric Wenzel on September 8, 2008 at 3:53am

Theresa-

In my opinion you are mentioning one of the big - for some reason uncontested - views of long-term strategizing. The world changes much too fast for honestly believing that a five-year strategy can be designed that meets unforseeable complexities of human and organizational life. Let me add that from my point of view the thinking underlying this apporach is heavily influenced by systems thinking which has been the dominating paradigm within OD and strategy design throughout the past decades. We need a new approach in this respect, one that puts human relating and the pragmatic way of how people get their work done in the "hurly-burly" (Shotter) of their everyday lives at the center. I firmly believe that such an approach, as for instance being promoted by Ralph D. Stacey at the University of Hertfordshire, holds ready a lot of new inisghts both, for our theorizing about and practical understanding of people in organizations.

Best, Eric

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Permalink Reply by Theresa M. Welbourne, Ph.D. on September 8, 2008 at 11:26am

Thanks Eric. I dont' know Dr. Stacey's work. Can you stay more about it?

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Permalink Reply by Eric Wenzel on June 10, 2009 at 5:22am

Hi Theresa,

Professor Ralph Stacey is the Director of the Center for Management and Complexity with the University of Hertfordhsire/ UK. Over the past decade he and his peers (most notably Douglas Griffin and Patricia Shaw) have done pioneering work in rethinking our understanding of human cooperation in organizations. His ideas are rooted in some strands of complexity theory (Ilya Prigogine), human power relating (Norbert Elias) and the way people construct meaning (George H Mead). His theory of Cpmplex Responsive Processes of Relating states that it does not make sense to think of organizations as systems. This thinking is the dominant paradigm in OD work (most people will know Peter Senge's 5th discipline. In fact the fifth discipline in this work is the 'systemic organization'.) What this thinking implies is that you can think of organizations as if they would exist at three different (spatial) levels: the individual, the team and the organization. Most consultancies will offer services along those lines accordingly. The problem with such thinking is that 'the organization' is thought of as something that has the quality of real material existience, a bounded thing; it is reified. Stacey would hold that something like 'the organization' in this material sense does not exist and hence can never be driven in a desired direction (like most senior managers pretend they can). The organization exists as a social object though (it has a meaning for me if I come to work at my company and it informs a part of my identity). Yet, have I rarely seen that people act in accordance with or try to base their assumptions on a long-term strategy devised by senior managers. They will base the thinking about their deeds and consecutively what they do on the local interaction they have with colleagues, clients etc. sometimes despite a given strategy. Stacey promotes a view to take this local interaction serious in order to understand why people in organizations act the way they do and why this is never in full congruence with long-term strategies. Since people cannot under all circumstances say what they truly think they will conceal parts of this thinking but act according to it later on. As nobody can know what it is that people really think and since pówer relations in organizations will normally prevent senior managers from getting to know what subordinates think of them the later have to make decisions that are at best based on guesses of what might a good thing to do. Still they appear as if they could steer the organization exactly in the 'fit' manner you described. Now the interesting think is that despite all plans, strategies and forecasts many companies prosper - even though most employees don't know the ideas behind the strategy or what company values mean for their daily work. People have to particularize in their daily work the genral guidelines and that must yield something different than that guidleline as particularizing implies negotiating with others in the face of a challenge or task of what to do now. Let me recommend the follwoing book to you: Stacey, Ralph (2007) Strategic Management and Organizational Dynamics. Make sure to get the 2007 issue! For a first idea of what issues this thinking spurs you may as well turn to a blog that is hosted by Dr Chris Mowles, who is a Fellow with the Center for Complexity and Management in Hertford: www.reflexivepractice.wordpress.com .

Best, Eric

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Permalink Reply by Steve Meckes on September 19, 2008 at 1:57pm

Your analysis rings true to me. There are many underlying assumptions to an elaborate strategy that might change....for most businesses the significant run up in oil prices and the financial market crisis will have a huge impact on long term strategy....not to mention internal events as you have postulated. Clearly, "strategy" can not be viewed as inert. There has to be a mechanism that triggers a strategy change in the face of significant change in fundamental assumptions. There are two issues most companies are faced with when it comes to developing a flexible strategy. First, the strategy drives annual business plans. These plans are then aggrigated and shared with financial analysts who set Wall Street expectations. Companies are punished for their failure to acurately perdict results. Second, many companies have squeezed their staff in order to show constantly improving results. The business unit management team spends the time required to develop the big master plan....but rarely takes the time to review the strategy and make mid course direction changes....because they're fighting fires to make the numbers they promised based upon the initial strategy....so yes, your analysis is right on the money!

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Permalink Reply by Theresa M. Welbourne, Ph.D. on September 29, 2008 at 8:20pm

Thanks for the response .. I'll be sending out some ideas for you to react to ..

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Permalink Reply by Steve Meckes on October 2, 2008 at 12:12am

Look forward to the discussion

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Permalink Reply by Mark Bublitz on September 29, 2008 at 5:06pm

Greetings Theresa,

I have read your post a few times and feel you have struck an area close to the bone, so to speak. But I am struggling how to respond. It has been my experience the model is not broken, merely abandoned. In the Midwest, outside of the automotive industry, business has been fairly robust for some time. Anything in the line of strategy has worked. Who needs a five year plan when things are going OK? As the current downturn works its way through the economy it will be interesting to see what investments are made in strategy and business process reengineering. Can we obtain improved efficiencies through incremental improvements or is a complete tearing down and rebuilding of processes necessary to see imporoved results?

A closing question if I may. Can you point to what you mean by the 'fit' model? Is there anything other than SWAT, strategy, tactics, execution, monitoring, and feedback? ;-)

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Permalink Reply by Theresa M. Welbourne, Ph.D. on September 29, 2008 at 8:18pm

Thanks for your response. I'm going to share some follow up ideas on this soon so hope to get your reaction. The "fit" model is basically the way that we 'do strategy' - we start with the big strategy (from vision, mission) then move it to the corporate business units - who then move to the functional areas (who create their own plans that 'fit' the corporate business unit strategy that 'fits' with the big mission) and then the functional areas drive it down to managers who create their own plan that 'fits' and eventually the every day employee gets goals that 'fit.' And sometime after about a year or so - everyone is nice and tidy and "fitting' together - but in the meantime, you get a day like today - or you lose a big client, or some other change happens that makes the initial strategy not quite right. But we spend all that time 'fitting' the pieces together ... and there seems to be a bit of a disconnect (to me at least).

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