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About plans and good decisions

Why you should stop searching for the perfect strategy

  • Kai Matthiesen
  • Wednesday, 17. August 2022
Strategy and decisions
© Claire Thibault

Being a manager is a hopeless case sometimes. Either you have a brilliant idea, but the organization “eats it for breakfast”. Or you might have a successfully running business model, but competitors or a changed market environment destroy your USP. So, what can you do?

Under these circumstances, it is a plausible move to look out for the secret formula that drives away all the hardship of organizational deficiencies and the evil of competition along with it.

Wouldn’t it be great to know the secret of transforming organizations to fit to your ideas? Wouldn’t it be even better to find a strategy that is bullet proof to competitors’ actions? The latest management fashions promise to give the ultimate answer to all problems. There is a solution for every challenge. For example, the “purpose driven organization” helps to wash away divergent perspectives and micropolitical conflicts.  Or the “Blue Ocean Strategy” leads the way to the paradise of uncompeted markets.

The search for the brilliant plan

Management fashions claim to have found the secret code of the organization, or, depending on the quest, to crack the secret of markets. There are legions of management consultants promising to deliver on the hopes of their clients by applying the magical potions, i.e., the fashions and the tools that come along with it. And if you cannot afford a consultant, buy the book at your local bookstore!

If executives view strategy as a brilliant plan, developed at the top of the hierarchy by bright people (or highly paid consultants) that just needs to be executed by the lower ranks, then they overestimate the ability of hierarchy. And they overlook the power of lower levels. Strategy could also be looked at as “pattern in a stream of decisions” (Mintzberg).  In that case strategy is not something that is developed from scratch. Instead, strategy forms out of a sequence of decisions that exhibits consistency over time.

Find the pattern, then call it a strategy

If one looks back on the decisions taken over a longer period, one will identify the ones that helped to improve the organizational performance or market impact – and vice versa the ones that did harm. Almost always there is a path dependency where one decision formed the premises for the next. Strategic decisions would be defined as decisions that lead to the deployment of relevant organizational resources. Most often, one can only qualify these decisions as “strategic” in hindsight. So, before you plan for something completely new, better look at what has made you successful. From there you may decide to either build on this pattern or deliberately break it by taking a first decision leading into another direction.  

A shared understanding might be a challenge

Reframing strategy formation is the easy part in this exercise. The bigger challenge may be to develop a shared understanding within the management team on what made you successful and go on from there. Even if the company has a co-operative culture, it might still be difficult to agree, as there are always different local rationalities based on the division of labor, leading to different judgements and interests. A shared understanding of the success patterns might help. However, it is not a pre-requisit for a good, i.e., successful strategy. 

As long as players in an organization can agree on concerted action, the disagreement even on fundamental aspects of the business model is irrelevant. The job of managers in strategy making is to move things forward under the condition of uncertainty and competing local rationalities. Concerted action in the light of different judgements and interests is what a management team should strive for. For this you need well prepared debates, formats where these debates can take place and courage to take decisions. If the debate is sufficiently broad and deep in scope, the probability that organizational players stick to decisions is definitely higher.

Competing perspectives are the basis of success

With an understanding of strategy as a pattern in a stream of decisions in mind, executives can turn down the expectation of strategies to be brilliant plans with answers to every question. Instead, they can concentrate on moving things forward step by step. They can engage in debate with their fellow managers, trying to achieve agreement on concerted action in the light of different judgement and interests, which in modern organizations form the basis, not the hindrance for success.

Kai Matthiesen

Dr. Kai Matthiesen

has a special focus on the tasks that members of organizations face in their daily business – and what is actually required formally.

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