Thursday, June 19, 2014

Smart people and strategy

Very astute post:

Why Smart People Struggle with Strategy

The problem with smart people is that they are used to seeking and finding the right answer; unfortunately, in strategy there is no single right answer to find. Strategy requires making choices about an uncertain future. It is not possible, no matter how much of the ocean you boil, to discover the one right answer. There isn’t one.
I’ve posted before on this issue.

On the problems with the case study method:

One of the real problems with business education is the heavy use of prepackaged case studies. While they purport to hone critical thinking skills, they also impart false lessons. Future managers come to believe that the information in front of them is complete, reliable, and predictive. The only thing left to do is exercise some thinking and then make a decision.

In real life it will never be that simple. Numbers are shaky and dirty data is a persistent problem. In the beginning there won't be enough critical information on the matter at hand. At the same time , there will be a flood of trivial and irrelevant material that demands attention.

It is tempting to wait until more data and better data can be obtained. Unfortunately, time is often a critical competitive dimension.
On the superficial way business schools teach strategy and corporations implement it:

Strategy and Execution: Business and the Military

Overall, I think American businesses put too little emphasis on clear strategic thinking. They put a lot of emphasis on planning but these efforts are frequently evasions of thought rather than real attempts to clarify and define.

Zbigniew Brzezinski once wrote that large bureaucracies do not have strategies-they have shopping lists. That sums up the output of the strategic planning process in most businesses as well. The end result is a grab bag of initiatives and budget items larded with some wishful thinking and trendy buzzwords.

While it is true that B-schools emphasize strategy over execution, they do not do a very good job of it when compared to military education. The approach is superficial using cookie-cutter templates in textbooks and skimpy case studies.
On George W. Bush and how his MBA training influenced his governing style:

GWB and his MBA

I discussed the conventional case study method here. I'm not sold on the idea that it is great training for strategic leaders. Decision-making under uncertainty is the sine qua non of strategic leadership. Paralysis by analysis is a constant danger. But it is possible to veer too far in the other direction. A bias for deciding can stifle curiosity. In a case study no one has extra information. The meta-lesson is that "no one knows more than I do." In real life, a little extra digging, some pointed questions, some humility, can prevent a lot of mistakes.

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