IDEAS FOR LEADERS: Mintzberg's Better Way to Do Corporate Strategy

An original post by Karl Moore and Phil LeNir

A few months ago I devoted my column to a discussion about the differences between Michael Porter's concepts of "deliberate strategy" versus Henry Mintzberg's "emergent strategy." As much as I had relied on Porter to guide my own career at IBM, and at Oxford and LBS, my new conclusion is that the world is no longer dependable, consistent, or predictable enough for leaders to rely only on deliberate strategic planning in advance. Strategic flexibility is now a requirement and that suggests, as I wrote, that "Mintzberg's emergent strategy is on the upswing." What does this mean practically for C-Suite executives who "do strategy"?

Since then my friend and former student Phil LeNir and I've been doing some further thinking about this juxtaposition, Porter vs. Mintzberg, and its implications for organizations. Since we are seeing much less of a bunch of senior executives heading off to posh resorts to talk about Porter's 5 Forces and come up with the game plan for the next 2, 3, or 5 years, how then does strategy get accomplished?

What's clear to us is that emergent strategy needs a completely different modus operandi, one that has the entire organization playing a role. Managers at all levels, and perhaps even employees, must feed into the strategic conversations, imparting their knowledge about what they are experiencing with customers or suppliers and what trends they are picking up on. Emergent strategy is therefore much more exploratory, dynamic, and organically home grown.

This puts a burden on companies to become "learning" organizations. We know we've been hearing this term for at least a decade, but emergent learning to bolster emergent strategy finally makes more sense than ever before. If reality is constantly changing, the company cannot stop analyzing, assessing, and planning to keep up—or get ahead of—those changes. We have to admit, Henry seems to have seen this coming even years ago when he wrote, "The real challenge in crafting strategy lies in detecting the subtle discontinuities that may undermine a business in the future. And for that, there is no technique, no program, just a sharp mind in touch with the situation."

The way we need to interpret this today is that organizations need lots of sharp minds—and not just at the C-suite level. Middle managers—the people who command the front lines of the workforce and have their feet on the ground where the action happens—have to be leaders who are constantly talking, learning, and innovating. I know Henry agrees with this 100 percent, as he has made the role of middle managers one of the major premises of his teaching.

We are at a point where the pace of change is reconfiguring the very essence of organizational person. We need great CEOs and leaders of course, but basically, it is time to admit that for many organizations the hierarchical, (Kyle Hill and I talked about this two weeks ago) top-down chain of command, authoritarian organization is a formula of the past—just like the idea that the company strategy can be solidly fixed years in advance.

For some people, this is exciting, albeit for others, it is undoubtedly frightening. But we need to get used to the idea that in an emergent world, the organizations that will fare the best most likely are going to be those that learn how to learn better, that put effort into creating not chains of command but chains of learning, by which we mean structures to support everyone learning, especially middle managers. These are the people who need to be constantly improving their skills, tackling new subjects, challenging themselves with new knowledge, and mastering new ways to think and manage.

We are not suggesting that companies spend oodles of money sending middle managers away on learning junkets or to management training programs. The type of learning we are talking about can be done on the job, as part and parcel of their usual activities, through social or collaborative "learning events" like webinars, knowledge exchange workshops, and short topical courses that have relevance in the moment.

It's "just-in-time learning" - where groups of middle managers realize they have a need to learn something and so they agree to meet up to tackle a topic, learn some new context, share their own knowledge and experiences, and then take their learning right back to their jobs where they apply it immediately. Their successes then cross horizontally to other managers in other divisions, and perhaps they also trickle up the ladder where senior executives buy into them and convert them into a wider strategic view. This is how emergent learning becomes emergent strategy.

Harvard's Michael Beer has argued that some of the most powerful change ideas in an organization comes from managers working on real business problems which cut across functions, jointly solving the problem. Executives should then scale up some of these innovations and spread across the organization, thus leading to real, emergent change.

Our sense is that this is precisely the style of learning and strategizing that Millennials love, this Post Modern generation that don't want to be led or managed, but "worked with." But the driving force of emergent learning is not due to a generational gap. Even without the Millennials around, it's what organizations need to do because this is a whole new world in which being able to think and act fast is the key to strategic survival.

Phil LeNir is the President of CoachingOurselves, a firm he founded with Henry Mintzberg which uses an approach to 'just-in-time' learning for management teams based on discussion and reflection guided by management topic booklets written by Goldsmith, Kotler, Mintzberg, Schein, Semler, Ulrich, Moore and many more.
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Maurice Poole

mauricepoole-96500

"Doers" of Strategy

A point not made is the role of the CEO and the strategy groups that surround or support him/her. If we think it through, it provides even greater motivation towards Employee Engagement - as if productivity through true valuation of staff were not enough. As Jerry quotes from Moore & LeNir, "We need great CEOs and leaders", but whilst they are and should be the ones with responsibility for best use of resources, and for external communications at the top of the business sector, the idea that they are all-seeing and all-knowing is a total myth. Surely it is the staff members that have most external contact and professional interest and could provide valuable eye-witness intelligence; opinion formers can be readily identified in any organisation to spread managerial information to keep groups informed and feed back internal information. All that information is lost to the CEO in the top-down model, which therefore Noorderhaven prescribes as suited only to small firms. There, every good chance may exist for a business owner to know personally everyone working there and has very likely grown up with the business. There is no need for small firms to shun the methods the large firms use to their cost today. But even then, to stay agile, they must not regard decisions as done and dusted, but revisit say Porter's Forces frequently. Porter probably never intended his ideas to result in inflexibility; they give us means of analysis that all can use, but large organisations need to use methods that engage with employees too. The process has to start somewhere, though. What about the CEO and Top People describing the organisation's present position as the current scenario and two or three future scenarios, all in terms of say three state variables, so that some are strategically more favourable than others. These would ideally be shown on a diagram and few words would be needed to explain why it would be desirable to move through one trajectory rather than others - sometimes uniquely so, other times maybe keeping options open. That diagram then goes to employee opinion formers including some middle managers in a facilitated group with the analyst and a feedback diagram is produced to describe how the favoured trajectory might be accomplished. The grammar used would need to be "More of A causes more (or less) of B", as more detailed relevant variables are added. As this develops, several things happen. 1. An Influence Diagram is produced showing what is required to bring about desired aims and what happens as that state is approached, with awareness of feedback loops and the dynamics of the system 2. Employees gain a better understanding of the whole business 3. All employees see their ideas taken into account and many of them see their knowledge influencing the overall picture 4. The CEO and Top People gain better insight into the contributions available from employees and appreciation of their particular views of it all What then? Well, if required, it is possible to assign "Actors" identities to influences and inquire into their likely actions - "politicising" the diagram - to determine what actions to take to strengthen moves that are favourable or dampen down those that are unfavourable. And if necessary, feasible and desirable (it is not always so) to use the diagram as the basis for mathematical modelling. It could even mean a shift in the CEO's ideas and affect the future of the organisation. Well, actually it will, because the employees will have been informed and consulted - engaged. What do people think of that? All comments are welcome. I put this here rather than in the Business Strategy Forum to seek views more widely. Best Regards   Maurice

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Stephen Bailey

stephenbailey-133543

IDEAS FOR LEADERS: Mintzberg's Better Way to Do Corporate Strate

Gents, In my experience, the companies with a clear purpose (Vision, Mission) and a defining set of core values are the ones that succeed over the long term, precisely because all strategies are subject to change in response to changing conditions. When I encounter businesses that are not clear, they often describe their strategy as "emergeant" which in layman's terms is "making it up as we go along". The issue is never one of "how are we going to get there?" as there are always options to choose from and changes to the journey plan can be made when you are on the journey. The issue is always: "where are you going? and why? and how much are you prepared to invest in reaching the destination? and for what return on the investment?" This issue applies at all levels of the organisation, across all shapes and sizes and around everything from the overarching goals right the way through to organising the Christmas Party ;) Thanks Stephen Follow @Stephen_Bailey

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Maurice Poole

mauricepoole-96500

IDEAS FOR LEADERS: Mintzberg's Better Way to Do Corporate Strate

Great article, Jerry What you suggest is Logical Incrementalism, a phrase we owe to James Brian Quinn. It holds that ideas are formed at any time by anyone in any place. It would be good to see you, and anyone else interested in these ideas, in the Business Strategy Club where you will find similar ideas, especially in one thread. In his book Strategic Decision Making (1995), Niels Noorderhaven quotes heavily from Mintzberg and from Quinn. From his research Noorderhaven places schools of thought in relation to types and sizes of organisation and comes down firmly on Logical Incrementalism for large firms, whilst finding as I did that top-down decision making remained the dominant form there, despite as he also found that there are people holding views not only aligned with Top People's decisions but also some in flat contradiction and I suggest infinite variations between. People making similar points include Prahalad & Hamel (1991), Pearson (1998) and more recently Macleod & Clarke (2008) who reported to the Brown Government on Employee Engagement. Oh, and me, quoting heavily from Mintzberg, Quinn, Pearson and Noorderhaven in 1999. I have a nice little method to apply in facilitated cross-functional groups that fits well into Logical Incrementalism. It copes well with "flat contradiction" etc. But in the end, however decisions are derived, there is always likely to be an emergent element. Thanks, Henry. One way to cope in the face of "complexity, uncertainty and conflict" is Jonathan Rosenhead's Robustness Analysis: Keeping Your Options Open - his book gives a flavour of several useful methods besides. Best Regards   Maurice DipEE MBA CEng MIEE MIET

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Ian Kaye

iankaye-39375

IDEAS FOR LEADERS: Mintzberg's Better Way to Do Corporate Strate

Jerry, a very interesting article/blog. Is it not fair to say that for quite a number of years, if not always, many organisations have the top-down strategy and allow flexibility along the way. Encouraging ground-up suggestions and initiatives that in turn lead to agreed top-down strategies. What impact do you think the vastly increased access to market information (both internal and external) has had on the organisations being allowed to be more reactive. I.e. they have more information quicker, enabling a response to the market that wasnt previously available? All the best Ian

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