Inside Business: Hey, you with the strategies - loosen up

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The Independent Online
TO MOST people in business, strategy is the summit. No matter what they say most consultancies aspire to be like McKinsey and Bain, while companies' in-house strategic planning departments are typically peopled by folk with big brains.

But is strategy as important as all that? Is it not possible to see many so-called brilliant strategies as after-the-fact rationalisations?

Well, no and yes. After all, many of the most successful companies have got where they are by trial and error or accident in the first place.

But that has not prevented strategic planners inside and outside organisations from taking themselves extremely seriously and seeing the approaching millennium and its associated uncertainties, in particular, as a powerful boost to their activities.

A new book on the subject should give them pause for thought. Launched earlier this month at a meeting of the association of MBAs - a classic bunch of strategy wannabes if ever there was one - Strategy Safari (Prentice Hall) is, as its title suggests, a run-round of the various theories of this rarified area of management. With Henry Mintzberg, the Canadian guru, one of the three authors, it is a lot more fun than that description would indicate. He was on typical puckish form at the launch.

A sort of Woody Allen of the management world, Mr Mintzberg has always done a good line in pointing up the absurdities of his chosen specialism. So this time, he demonstrated how the fad of the "experience curve" associated with the likes of the Boston Consulting Group came to be usurped by the "knowledge spiral" (when we all fell for the Japanese approach to knowledge management) and how Michael Porter, perhaps the most famous strategist of them all, has seen his "chain" challenged by David Hurst's "organisational eco-cycle".

Strategy proponents will note that it is easy to scoff. But behind the droll cartoons and the pithy descriptions of what he and fellow authors call the "schools of strategy" there is a serious point. It is that in strategy, as in just about every area of management, no single way is right.

Accordingly, the sort of analysis advocated by Porter and others clearly has its place. But it is not the be all and end all. In introducing the "configuration school" Mintzberg and co are calling for an approach that takes in "all of the above".

The book quotes one management academic, Richard Rumelt, who recalls that in 1977 his MBA final exam on the Honda Motorcycle case asked whether the company should enter the global automobile business. "It was a 'giveaway' question," he said. "Anyone who said 'yes' flunked." To an MBA student the reasons were obvious: markets were saturated; efficient competitors existed in Japan, the United States and Europe; Honda had little or no experience in automobiles; and Honda had no auto distribution system. And yet in 1985 Rumelt's wife drove a Honda. The analysis did not allow for the energy of a company determined to succeed, says Mr Mintzberg.

Such an example always brings a laugh but organisations and their advisers continue to make such mistakes. It is almost as if they are so sure of themselves that they think they can secure the prize - of one simple solution - that has eluded everybody else.

And that is why academics from the same institution can, apparently in all seriousness, come up with such diametrically opposed notions as "bottom- up" and "top-down" change.

Presumably, perpetuating such absurdities is much more acceptable than having chief executives admit that they do not have a monopoly on making things happen or consultancies that advise their clients to send out their best and brightest with the instruction to observe.

That would take away the mystery and would never do.