OUEG 4 The Int. JI of Mgmt Sc~. Vol. 1!). No. 6. pp. 613 to 627. t982
0305-,.',a'Q '~2 0,~0~'.3-'. 55113,0 ~)
Pergamon Pros, Lrd
Printed in Great Britain
Managing Strategies Incrementally
JAMES
BRIAN
QUINN
Amos Tuck School of Business Administration, Dartmouth College. USA
Received February 1982; in revisedjorm March 1982)
When sophisticated large organizations make significant changes in strategy, the approaches the.~
use frequently bear little resemblance to the rational-analytical systems so often touted in the
planning literature. Such systems are rarely the source of overall corporate strategies. Instead. the
processes used to generate major strategies are typically fragmented and evolutionary ~ith a high
degree of intuitive content. Although one usually finds imbedded in these fragments some ~er.v
refined pieces of formal analysis, overall strategies tend to emerge as a series of conscious internal
decisions blend and interact with changing external events to slowly mutate key managers" broad
consensus about what patterns of action make sense for the future. Based on a multi-year study of
how large companies change their strategies, this article summarizes ~h.v strategic managers do
proceed incrementally and how they manage the complex process of generating an overall strategy.
INTRODUCTION
Ix A RECENTLY completed study of large
companies undergoing strategic change [1], I
found that managers purposely guided important actions i,crementally toward strategies
embodying many of the structural principles of
elegant formal strategies. In these concerns the
approach was neither 'anti-planning' nor an
abrogation of the hard intellectual thought
processes required for formal strategic
analyses. In fact, formal planning was usually
an essential building block in the step by step
processes executives used to develop overall
strategies. But for good reasons, they relied on
much more evolutionary practices than this
model usually implies [16, 10,42]. Their
approach might at first seem to be disjointed
or muddling [20], but on closer analysis the
rationale behind their incremental approach to
strategy formulation was so powerful that it
perhaps provides a normative model for most
strategic decisions. Why and how do effective
executives manage in this mode'?
From broad to specific
Strategy deals with the unknowable [2]. In
the beginning, it is literally impossible to predict all the important events and forces which
might possibly shape the future of the enterprise--much less the total effect of their interactions. The best that executives can do is to
forecast the forces most likely to impinge on the
company's future and the probable nature and
range of their potential impacts [18]. From
these they can define broadly and flexibly what
they would like to do, i.e. their tSsion of success
[32]. Then successful strategists try to build a
resource base and a posture that is so strong
and flexible that the enterprise can survive and
prosper toward its vision despite all but the
most devastating events. They consciously seek
a market/technological/product scope within
which their concerns can be "preeminent' despite their resource limits [17]. Then, when
possible, they place some "side bets': (a) to
decrease the risk of catastrophic failure or (b)
to offer the company added future options [6].
Instead of seeking ultimate specificity in
their overall strategies, executives in my' study
accepted much ambiguity [50]. They initially
worked out in their own minds--and shared
with selected colleagues--only a few integrating concepts, principles, or philosophies that
would help rationalize and guide the
company's overall movements. They proceeded
step by step from the early generalities toward
613
Quirm .~{anaqinq Strateqie~ Incrementally
614
later specifics [30]. clarifying the strategy' incrementally as events permitted or dictated. In
early' stages they' consciously avoided over-precise statements ~hich might impair the flexibility or imagination needed to exploit new information or opportunities [37]. They constantly
reassessed the future, found new congruencies
as events unfurled, and blended the organization's skills and resources into new balances
of concentration and risk dispersion as external
forces and internal potentials intersected to
suggest better, but never perfect, alignments.
The process was dynamic with neither a real
beginning nor end.
In the hands of skilful executives incrementalism is not merely reactive as some have suggested [3]. Incrementalism can be a purposeful,
powerful management technique for integrating the analytical, behavioral, political and timing aspects of strategy formulation.
WHY INCREMENTALISM?
There are five basic reasons for using careful
incrementalism in strategy formulation. It
helps executives:
(1) improve the quality of information available for strategic decisions:
(2) deal with the different lead times and
sequencing problems involved in major decisions;
(3) stimulate flexibility, creativity, and opportunism in pursuing desired goals:
(4) overcome political and emotional barriers
to change;
(5) create the personal and organizational
commitment needed to implement strategies effectively.
Specific examples will demonstrate how incrementalism contributes in various c o m m o n and
difficult strategic situations.
Precipitatinq et'ents
No matter how carefully executives plan,
external events--over which they have essentially no c o n t r o l - - c a n precipitate urgent, piecemeal, interim decisions with critical long-term
strategic consequences [16]. Early decisions
made under stress can create new thrusts, precedents or opportunities that are difficult to
reverse later. Recognizing this, top executives
often deal with precipitating events in an incremental fashion. Early commitments are kept
formative, tentative and subject to later review.
In some cases, neither the company nor external players can understand the full implications
of alternative actions. All want to test assumptions and have a chance to learn from and
adapt to the others" responses [31]:
For example:
When 1 was in the office of Esso France's president, our
discussions were interrupted several times by announcements that the country was being shut down by political
turmoil and that various activist groups had taken over
one or another of Esso's facilities. Instead of ending our
conversation to take some action, the president quietly
said. "Right now we must merely find out what is going
on. Then we must wait until the situation clarifies
enough to know what to do". It took several days to
clarify the demands of the activists, to understand the
forces tit play. and to participate effectivelyin coalitions.
Haste could have set in motion forces which would have
permanently damaged the French company's strategic
position.
Further information has a value. So effective
executives consciously try to keep their options
open until they better understand how later
events may affect their enterprise, their various
constituencies, and their power bases. Logic
dictates that critical decisions should be made
as late as possible consistent with the information available [26]; this usually means
incrementally. But crisis decisions do not provide the s o l e - - o r central--rationale for incrementalism in strategy formulation. Other
aspects of strategy do.
Technolo,qy decelopment
Although one can. and should, lay out the
broad goals and a planned framework for R &
D activities, the precise directions that R & D
may project the company can only be understood step by step as scientists uncover new
phenomena, amplify discoveries, reduce concepts to practice, build prototypes, and interact
with potential users. Throughout this process
a wise management will maintain its options
and proceed incrementally from broad visions
toward final specific positioning strategies [38].
The latter pattern is often significantly affected
by where break-throughs occur, their timing.
Omega. Vol. ll)..\o. 6
and relative economic potentials, none of
which can be accurately predicted when the
program begins.
~15
each new unit markedly changes the company's
overall strategic capabilities.
For example:
For example:
Pilkington's entire world~`.ide strategy ~'.ould have been
markedb changed if its float glass program had not had
a bit of luck at a crucial moment. When a pouring spout
on its experimental glass facility broke, the accident led
to solution of the final bottleneck in the revolutionary
he'.', process '.`.hich then dominated the industry for 20
~ears. On the other hand, if Pilkington's fiberglass programs had been relatively more successful earlier, the
compan.~'s `.'.hole strategy might '.~e[l have shifted in
other directions [40].
Similarly today, Genentech must see which of its genetically engineered products and processes can be reduced
to practice first and ~hich `.`.ill perform safely and effecti`.elv in life systems, before it defines much of its eventual strategy. Even now it appears that Genentech's early
positioning may be in animal disease prevention, not in
the glamorous human health areas it first envisioned.
Recognizing the need for flexibility in technical strategies the US Defense Department and
companies like IBM and Xerox have developed
"phased program planning" systems. They make
concrete decisions only on the current phase of
a project. They continue to introduce data
from further technical findings and user interactions [48] into program decisions as long as
possible until truly fixed commitments must be
made for plants, components or major facilities. This added information often positions the
new technology differently and more effectively
than earlier formal analysis suggested--with
important consequences for strategy.
Acquisition/dicersiJication programs
Acquisition/diversification
strategies also
require an incremental approach for maximum
effectiveness. Formal analyses can lay out
broad goals for such programs, define the criteria candidate companies must meet, set priorities for the search, build needed resource and
organizational
flexibilities, and anticipate
potential problems in integrating new units
into the enterprise [22]. But so much depends
on the availability, sequencing, conditions of
purchase and specific management characteristics of the individual companies acquired that
successful acquisition programs must proceed
flexibly and opportunistically, interactively
reshaping initial visions and strategies as concrete potentials emerge [-47]. This is especially
important for large single acquisitions where
Continental Group would ha'.e a ~ery different strategic
posture today if it had purchased Peabod? Coal instead
of Richmond Insurance. Yet both would ba'.e made
viable "fourth legs" for Continental's busine>s at the nine
of their consideration. And the acquisition of one might
have preempted the other [40].
Similarly. Seagram's unsuccessful billion dollar attempts
to acquire St Joe Minerals and C O N O C O ~i[I probab[?
lead to a completely different future strategic posture
than it once antiocipated. Yet such divergent results are
common hazards of acquisition strategies.
Even in acquiring smaller companies the
final impact of a diversification program wilt
be determined by whether and when specific
candidates become available [24]--always a
somewhat random process. Some of the most
successful acquisitions come "over the transom',
as Steak and Ale did for Pillsbury [40], to a
flexibly prepared company. One can rarely
completely foresee how such acquisitions will
fit and blend into a new strategy until at least
the key pieces are known and in place.
For example:
General Mills very carefully laid out the criteria for its
early 1970s acquisitions in the classic manner. Its intentions were: (11 to expand in food-related fields, t2I to
develop new growth centers based on its skills at marketing to the homemaker. The consensus ,.,.as that the
majority of resources should go to food-related areas.
Almost the exact opposite occurred. Because of external
factors beyond its control, the company had a good
selection of candidates in non-foods areas and few in
foods. By 1973 General Mills had diversified into a wide
array of new areas from toys to creative crafts to fine
clothing, with high impact on its total posture [4f)].
In addition to handling such sequencing and
timing considerations, incremental processes
also assist in achieving the crucial psychological and power shifts which so significantly
affect a program's overall directions and consequences. Properly used, they step by step help
to create the broad conceptual consensus, risktaking attitudes and adaptive dynamics critical
to success. Most important among these processes are:
(1) generating the initial psychological commitment to diversify outside of familiar fields;
(2) building a sufficient 'comfort factor" about
risk-taking for key managers to actually
commit resources to new areas;
616
Quinn--3,1anaqinqStrategies Incrementally
13t systematically realigning the enterprise's
resources and organization structure so it
can move opportunistically:
(4) empowering an "activist" whose career
depends upon the success of the diversification p r o g r a m ;
(5) shortening lines of c o m m u n i c a t i o n from the
activist to the highest decision authorities;
(6) overcoming political resistance to redirecting funds;
(7) actively changing the c o m p a n y ' s past ethos
as new attitudes, potentials and power
centers emerge [31 ].
Each of these processes can affect the timing
and direction of the strategy as much as any
formal analysis. Each has its own timing imperatives. And each interacts with other decision processes and the r a n d o m appearance of
acquisition candidates to redirect initially
planned actions, time scales and results in
unexpected ways. Complexities are so great
that few diversification p r o g r a m s end up as
initially envisioned. Experienced managers
recognize this and manage their acquisition
programs incrementally, reshaping their broad
early visions flexibly, step by step, as new
opportunities,
acquired
competences
and
executive personalities merge to create new
potential patterns for success. Until these
patterns are clear, acquisition goals are kept
general and are rarely explicitly announced.
For example:
As George Wiessman. chief architect of Philip Morris"
successful acquisition program, said: "We don't
announce growth goals in new areas because we don't
want to get trapped into doing something stupid. We
might be tempted to acquire it company ~hen we
shouldn't. Or we might hang on to an operation we
really should sell off. Public statements can sometimes
generate powerful expectations--internally and externally-that can pressure you to do the wrong thing".
Their effects on personal or power relationships preclude discussion in the open forums
and reports of formal planning. T o p executives
have to think t h r o u g h the new roles, capabilities and probable individual reactions of the
m a n y principals affected. They m a y have to
wait for the p r o m o t i o n or retirement of a
valued colleague before m a k i n g a particular
desired change. T h e n they frequently have to
bring in, train, or test new people for substantial periods before they can staff key posts with
confidence. As individuals' potentials, performance, personal drives, and relationships to
other team members develop, top managers
m a y substantially modify major elements in
their original organization concept as well as
the overall corporate strategy.
For example:
At General Mills. Charles Bell brought in a new team of
outside professional managers under General Rawlings.
This team redefined the company's problems and opportunities in ways the prior management could not have
foreseen. Over a period of time they divested many divisions which had been the core of the old business. These
divestitures released funds for acquisitions in new areas,
thus automatically increasing the visibility and power of
the new controllership-financial group brought in by
Rawlings. But with fewer large divisions competing for
funds, the Consumer Foods Group also rapidly grew in
importance. This ultimately led to the choice of the Copsumer Foods Head, James MacFarland. for the corporation's next CEO--and set the direction of General
Mills' future strategy E40].
Successful reorganizations, other than those
made in crises, tend to proceed opportunistically, step by step, selectively moving people
and unit structvres toward a broadly conceived
organizational goal which is constantly modified and rarely articulated in detail until the
most important psychological and structural
pieces finally fit together. An overall concept of
'decentralization', "SBUs' or 'global product
units' m a y prevail t h r o u g h o u t . But if adequate
allowance is made for testing, flexibility and
feedback, the final formulation may bear little
likeness to initial conceptions. And the outc o m e is usually an improvement.
Major reorganizations
M a c r o organizational changes tend to be associated with most major corporate strategy
shifts [9]. Like most other important strategic
decisions, these moves are also typically
handled incrementally and outside the formal
planning process. Why'?
Gocernment-external relations strategies
Government-external
relations
strategies
also require incremental formulation. Such
strategies typically deal with very large scale
forces, mostly b e y o n d the c o m p a n y ' s direct
control. Data tend to be very soft. often can
Omeqa. ~,'ol. I O, ,Vo. 6
only be subjectively sensed, and may be costly
or impossible to quantify'. The wav outside individuals or groups will respond to a particular
stimulus is difficult to predict. Yet these forces
can be very powerful relative to the company'.
And their potential attack modes can be so
diverse that it is physically impossible to lay
out probabilistic decision diagrams that have
much meaning. Bizarre actions of outsiders can
determine final outcomes. Results are unpredictable and error costs extreme. Hence. the
most rational seeming and best intended strategies can be converted into disasters unless they
are interactively developed and tested.
For example:
In the 1960s General Motors found that technical discussions of cost vs benefit tradeoffs were useless against
demagogic slogans like "smog kills' or ' G M is the worst
polluter in the world'. Despite assisting in the basic
studies that defined automotive exhausts as a major
causative factor in smog, G M publicly resisted some
early attempts to impose effluent standards as "beyond
the state of the art'. Then later, after successfully completing the costly and risky I$100 million} dcvelopmcnt
of the catalytic converter. G M had its earlier concerns
thro~sn in its face as "foot dragging" or "lying" about technical potentials. As one executive said, "'You ~crc
damned if you did and damned if you didn't". Only' after
prolonged interactions with regulators, legiskttors and
public interest groups did G M truly understand the
needs and pressure potentials of its opponcnts. Area by
area it experimented with better ways to communicate
v,ith various interests. Only then could it identify effective patterns to mold into its overall corporate strategy
[3l]
Other strategies
Other strategies, like those for divestitures,
capital access, intermttional relations, human
resources development etc., are so sensitive
that they too are usually determined in subsystems outside the forums of formal planning.
The timing imperatives of each subsystem or
strategic area tend to drive its decisions out of
synchronization with the others. Consequently
just as managers move forward incrementally
within each strategic area, they also must proceed incrementally toward a total strategy
[253. They constantly try, both intuitively and
analytically, to integrate their actions into a
cohesive pattern as they go along. But rarely
do all the pieces fit neatly and totally in detail
at any specific instant, especially at the
moment annual plans are due.
Formal planning increments too
In most cases formal planning itself should
01"
be a part of the incremental process. Most
sophisticated managements purposely design
their plans to be "living' or "evergreen'. They
are best thought of as frameworks to guide and
provide consistency for future decisions made
incrementally. To act otherwise is to deny that
further information has a value. Properly developed, such systems are very usefuI--indeed
essential--as components of the strategic process: they teach managers about the future and
extend the time horizon of detailed plans; the?
serve as important vehicles for involving lower
level managers and forcing negotiations on
goals and program balances throughout the organization; in the planning guidelines issued
from the top and in the commitment patterns
they eventually set forth, they' systematize and
confirm incrementally' made strategic decisions.
Annual planning provides a critical interface
between strategic and tactical commitments. It
is the ,sine qua non of all decentralization and
sensible management control [44].
But in my sample, annual phmning was
rarely the source point for major new strategies
- - a n d certainly not for overall corporate strategies. These evolved from the kinds of incremental processes described above.
Formulation and implementatio~z blur
In large organizations overall strategies rarely
burst forth full blown from even the best
strategic studies [28]. Even MacArthur's brilliant "island hopping' strategy was slowly synthesized from a series of studies, political interactions, tests and early failures [23]. Executives
tend to adopt only a piece of a given study's
total recommendations and leave other key
elements to be defined as new information
becomes available, politics permit or specific
opportunities or thrusts crystallize. Overall
strategies emer,qe organically' as executives link
together and create order out of a series of
partially overlapping processes and interacting
decisions that may span years [12]. Such incrementalism is a conscious adaptation to the
psychological and informational problems of
getting an ever changing group of people with
diverse talents and interests to work together
effectively in a continually dynamic environment.
The lines between strategy formulation and
implementation constantly blur. Some parts of
a major strategy will be in early' awareness
618
Quinn .tlanu~lin(.IStrateqies lncremema!lr
b u i l d i n g stages, o t h e r parts in a n a l y t i c a l stages,
others in e x p e r i m e n t a l phases, others in unpred i c t a b l e flux or crisis situations, a n d still others
in i n t r o d u c t i o n or i m p l e m e n t a t i o n m o d e s
which require later m o d i f i c a t i o n . P a r t i a l implem e n t a t i o n of large scale strategies m u s t be
u n d e r w a y even as o t h e r f o r m u l a t i o n efforts go
forward. T h o u g h t f u l executives treat each step
in the f o r m u l a t i o n process as an integral part
of i m p l e m e n t a t i o n . T h e y see that key p e o p l e
are informed, involved a n d c o m m i t t e d in develo p i n g their p a r t i c u l a r phases of the strategy.
T h e y build existing m o m e n t a into the strategy,
wherever possible. A n d they c o n s t a n t l y try to
see that essential interim d e c i s i o n s - - l i k e facilities, technology, or p e r s o n a l s e l e c t i o n s - - h e l p
i m p l a n t or flexibly s u p p o r t intuitively perceived strategic thrusts that m a y not yet be
w o r k e d out in detail. Because of such d y n a m i c s
it m a y be m i s l e a d i n g to think that in large org a n i z a t i o n s one can realistically first f o r m u l a t e
a detailed overall strategy, a n n o u n c e it, and
then proceed to i m p l a n t it. M u c h m o r e subtle,
interrelated, c o n t i n u o u s e v o l u t i o n a r y processes
tend to d o m i n a t e strategy d e v e l o p m e n t in these
circumstances.
what similar incremental processes as they
m a n a g e c o m p l e x strategy shifts. A few glimpses
follow:
Leading the formal injbrmation system
Rarely do the earliest signals for strategic
c h a n g e c o m e from the c o m p a n y ' s formal horizon scanning, p l a n n i n g or r e p o r t i n g systems.
Instead, initial sensing of needs for m a j o r strategic changes is often described as "something
you feel uneasy a b o u t ' . "inconsistencies" or
'anomalies" [31] between the enterprise's current p o s t u r e a n d s o m e general p e r c e p t i o n of its
future e n v i r o n m e n t [29]. Effective m a n a g e r s
establish m u l t i p l e credible internal a n d external sources to o b t a i n objective i n f o r m a t i o n
a b o u t their e n t e r p r i s e a n d its s u r r o u n d i n g env i r o n m e n t s [50]. They use these n e t w o r k s to
short-circuit all the careful screens their o r g a n i z a t i o n s build up "to tell the t o p only what it
wants to hear' [4]. They actively search b e y o n d
their o r g a n i z a t i o n ' s formal i n f o r m a t i o n systems, d e e m i n g the latter to be too historical,
t r a d i t i o n o r i e n t e d or e x t r a p o l a t i v e to p i n p o i n t
needed basic changes in time [8].
For example:
MANAGING
INCREMENTALISM
H o w can one p r o a c t i v e l y m a n a g e strategy
f o r m u l a t i o n in this mode'? O n e executive provided p e r h a p s the most a r t i c u l a t e s h o r t statement of the overall a p p r o a c h :
Typically you start with a general concern, vaguely felt.
Next, you roll an issue around in your mind until you
think you have a conclusion that makes sense for the
company. Then you go out and sort of post the idea
without being too wedded to its details. You then start
hearing the arguments pro and con, and some very good
refinements of the idea usually emerge. Then you pull
the idea in and put some resources together to study it
so it can be put forward as more of a formal presentation. You wait for "stimuli occurrences" or "crises', and
launch pieces of the idea to help in these situations. But
they lead toward your ultimate aim. You know where
you want to get. You'd like to get there in six months.
But it may take three years, or you may not get there at
all. And when you do get there, you don't know whether
it was originally your own idea--or somebody else had
reached the same conclusion before you and just got you
on board for it. You never know*" [40].
Because o f differences in o r g a n i z a t i o n a l
form, m a n a g e m e n t style, a n d the c o n t e n t o f ind i v i d u a l decisions, no single p a r a d i g m holds
for all strategic decisions [37]. But m y s t u d y
suggests that executives tend to utilize s o m e -
To avoid their own natural biases, executives who are
aggressively seeking new potential opportunities or
threats make sure their networks include people who
look at the world quite differently from the dominating
culture of the enterprise. Some companies have structured 'devil's advocates" into their planning processes for
this purpose. Others have undertaken 'aggressor
company" exercises to simulate how intelligent aggressors
could best attack their patents, markets, or desired
future positions. Still others--like Xerox--have commissioned groups of known independent thinkers to
make special studies, with the extensive help of outside
consultants and authorities, to ensure top managers view
changing environments analytically and creatively.
Building organizational awareness
This m a y be essential when key p l a y e r s do
not have e n o u g h i n f o r m a t i o n or p s y c h o l o g i c a l
s t i m u l a t i o n to v o l u n t a r i l y c h a n g e their past
a c t i o n p a t t e r n s or to investigate o p t i o n s creatively. At early stages, successful c h a n g e
m a n a g e r s seem to consciously generate a n d
c o n s i d e r a b r o a d a r r a y of alternatives [50].
W h i l e t a p p i n g the 'collective wit" of the o r g a n ization, they try to build a w a r e n e s s a n d concern a b o u t new issues. T h e y a s s e m b l e objective
d a t a to argue against preconceived ideas o r
blindly followed past practices. Yet they want
to a v o i d p r e m a t u r e l y t h r e a t e n i n g
power
Omeqa.. !, el. l i t \'o. 0
centers that might kill i m p o r t a n t changes
before p o t e n t i a l s u p p o r t e r s really k n o w w h a t is
at stake and can bring b r o a d e r interests to
bear. At this stage, m a n a g e m e n t processes are
rarel~ directive. Instead they are likely to
involve studying, challenging, questioning,
listening, talking to creative people o u t s i d e ordinary' decision channels, g e n e r a t i n g options,
but p u r p o s e l y a v o i d i n g irreversible c o m m i t ments [ 15].
For dxdmple:
In the early 1970s there was u glut in world oil supplies.
Ne`,ertheless, GM's Chief Economist began to project an
increased US dependency on foreign oil and higher
future prices. These concerns led the Board in 1972 to
create an t~d hoc energy task force of key executives
under David Collier. The group's report in May 1973
'created a good deal of discussion around the company'
in the months before the oil embargo hit. "We were
trying to get other people to think about the issue", said
Richard Gcrstenberg. then chairman of GM. These discus>ions provided an important backdrop for the crucial
do`,`,nsizing decisions made during the embargo period
[4o].
Executives may want their colleagues to be
m o r e k n o w l e d g e a b l e a b o u t such m a j o r issues
and help think t h r o u g h r a m i f i c a t i o n s clearly
before t a k i n g specific actions [25]. T h e y w a n t
to avoid being the p r i m e s u p p o r t e r of a losing
idea or having the o r g a n i z a t i o n a t t a c k or
slavishly a d o p t "the bess's s o l u t i o n ' a n d having
to change it its m o r e evidence b e c o m e s available. Even t h o u g h top executives m a y not have
in m i n d specific s o l u t i o n s to an e m e r g i n g p r o b lem they can p r o a c t i v e l y guide early steps in
intuitively desired d i r e c t i o n s by defining the
issues staffs investigate, selecting the p e o p l e
who m a k e the investigations, a n d c o n t r o l l i n g
the r e p o r t i n g process. T h e y may' not t e r m i n a t e
this "diagnostic phase' [29] until they have
identified potential p r o p o n e n t s a n d o p p o n e n t s
of various p o s i t i o n s a n d are sure that e n o u g h
people will "get on b o a r d ' to m a k e a s o l u t i o n
work.
Building credibilio'/changing symbols
S y m b o l s m a y help m a n a g e r s signal to the
o r g a n i z a t i o n that certain types of changes are
coming, even when specific s o l u t i o n s are not
yet in hand. K n o w i n g they c a n n o t c o m m u n i cate directly with the t h o u s a n d s w h o m u s t
carry' out a strategy', m a n y executives p u r p o s e l y
u n d e r t a k e a few highly visible s y m b o l i c a c t i o n s
which wordlessly c o n v e y c o m p l e x messages
~19
they c o u l d never c o m m u n i c a t e as we{!. or as
credibly, in ~erbal terms. T h r o u g h ~vord of
m o u t h the informal grapevine can amplify signals of a p e n d i n g c h a n g e in ways no formal
c o m m u n i c a t i o n could E41].
For exumple:
In GM's do~`,nsizing decision, engineers said one of top
manugement's early decisions affected the credibilit,, o(
the ,,,,hole `,`,eight-reduction program: "'Initially. we proposed a program using a lot of aluminum and substitute
materials to meet the he`,`, mass targets. But this ~ould
hu`,e meant a `,er`, high cost. and `,'.ould hu~c strained
the suppliers" aluminum capacity. Ho`,~e`,er. ~hen ~e
presented this program to management, they said.
"Okay. if necessary, v,'e'll do it'. The> didn't back do~`,n.
We began to understand thcn that the.'. ~ere dead
serious. Feeling that the company ~`,ou{d spend the
money was critical to the success of the entire mass
reduction effort" [40].
O r g a n i z a t i o n s often need such s y m b o l i c moves,
or decisions they regard as symbolic, to verify
the r e t e n t i o n of a new strategy or to build
c r e d i b i l i t y behind one in its initial stages. Without such a c t i o n s people may interpret even
forceful verbiage its mere rhetoric and delay
their c o m m i t m e n t to new thrusts.
Legitimizing new viewpoints
This will often involve p l a n n e d delays, since
t o p m a n a g e r s m a y p u r p o s e l y create discussion
forums or allow slack time for their organiza t i o n s to talk t h r o u g h t h r e a t e n i n g issues, work
out the i m p l i c a t i o n s of new solutions, or gain
an i m p r o v e d i n f o r m a t i o n base that permits
new o p t i o n s to be e v a l u a t e d objectively in
c o m p a r i s o n with m o r e familiar alternatives.
Because of familiarity, solutions which arise
out of executives' p r i o r experience are perceived as having lower risks (or potential costs)
t h a n newer a l t e r n a t i v e s that are m o r e a t t r a c t ive when viewed objectively. In m a n y cases,
strategic c o n c e p t s which are at first strongly
resisted can gain a c c e p t a n c e a n d positive c o m m i t m e n t s i m p l y by the passage of time and
o p e n d i s c u s s i o n of new i n f o r m a t i o n - - w h e n
executives d o not e x a c e r b a t e hostility by pushing them t o o fast from the t o p E l l ] . M a n y top
executives, p l a n n e r s a n d c h a n g e agents consciously a r r a n g e for such "gestation periods"
a n d find that the c o n c e p t itself is frequently
m a d e m o r e effective by the resulting feedback
a n d acceptance.
620
Quinn -.~lana~4inqSrrateyies lnc'remcntc~llv
For example:
When "William Spoor took over as CEO at Pillsbur,,.
one of the biggest issues he faced v,as v,hether to stay in
or get out of the Pillsbury Farms" chicken business.
Management was deeply split on the question. Spoor
asked all ke? protagonists for position papers and purposely commissioned t~o papers on each side for the
Board. He in~ited consultants" yields and ~isited Ralston
Purina. ~hich had undergone a similar divestiture. He
got an estimate from Lehman Brothers as to the division's ~alue. All this went to the Board which debated
the issue for months. A key event occurred when Lehman found a potential European buyer at a good price.
Finally. ~hen the vote v,as taken only one person--Pillsbury Farms" original champion--voted for retention
Dc~].
Tactical sifffis and partial solutions
These are typical steps in developing a new
overall strategic posture and early p r o b l e m
resohttions are likely to be partial, tentative or
experimental [24]. Beginning moves are often
handled as mere tactical a d j u s t m e n t s in the
enterprise's existing posture a n d as such they
e n c o u n t e r little opposition. Executives can
often o b t a i n agreement to a series of small programs when a b r o a d objective change would
e n c o u n t e r too much opposition. Such programs allow the g u i d i n g executive to m a i n t a i n
the enterprise's o n - g o i n g strengths while shiftmg m o m e n t u m - - a t the m a r g i n - - t o w a r d new
needs [12]. At this stage, top executives themselves may not yet c o m p r e h e n d the full n a t u r e
or extent of the strategic shifts they are beginning [7]. They can still experiment with partial
new approaches without risking the viability of
the total enterprise, while their b r o a d early
steps can legitimately lead to a variety of different success scenarios [29].
Fop" example:
Following the Collier report, when the oil embargo hit
in fall 1973, General Motors responded at first by merely
increasing production of its existing small cars. Then as
the crisis deepened, it added another partial solution, the
subcompact "T car'--the Chevette--and accelerated the
SeviHe's development cycle. As economy appeared more
saleable, executives set an initial target of removing 400
pounds from big-car bodies in 1977. Then as fuel economy pressurcs persisted and engineering feasibilities
offered greater confidence, this target was tightened
further to 800-1000 pounds (3 miles per gallon). No step
by itself shifted the company's total strategic postt,re
until the full downsizing of all lines was agreed upon.
But each partial solution built confidence and commitment toward a new direction.
As events unfurl, the s o l u t i o n s to several initially unrelated p r o b l e m s tend to flow together
into a new synthesis. W h e n possible, strategic
logic Irisk m i n i m i z a t i o n ) dictates starting b r o a d
initiatives that can be flexibly' guided in any of
several possible desirable directions [50].
Broadening political support
B r o a d e n i n g political s u p p o r t for emerging
new thrusts is frequently a n essential and consciously' proactive step in m a j o r strategy
changes. Committees, task forces or retreats
tend to be favored mechanisms. By selecting
such groups' chairmen, m e m b e r s h i p , timing
a n d agenda the g u i d i n g executive can largely
influence and predict a desired outcome, y e t
n u d g e other executives toward a consensus
[24]. The careful executive, of course, still
m a i n t a i n s complete control over these "advisory" processes t h r o u g h his various influence
a n d veto potentials. In a d d i t i o n to facilitating
smooth
implementation, many
managers
report that interactive consensus b u i l d i n g also
improves the quality, of the strategic decisions
themselves a n d helps achieve positive and
i n n o v a t i v e assistance when things otherwise
would go wrong.
Fop" example:
Shortly after he became CEO of General Mills. James
MacFarland took his 35 top people on a three day retreat
to discuss 'how to move a good company to greatness'.
He wanted the views of others in defining greatness and
their active participation in achieving it. Working in
groups of six to eight, the management team defined
what the characteristics of a great company were from
v~,rious points of view. what General Mills' shortcomings were, and what main thrusts were needed to
overcome these. Over time. these broad visions, goals
and programs were converted into charters for various
divisions and groups. They became the initial guidelines
for the company's very successful and flexible development over the next decade [40].
Overcoming opposition
O v e r c o m i n g o p p o s i t i o n is almost always
necessary at some stage. Careful executives realize that they must deal with the s u p p o r t the
preceding strategy had. They try not to unnecessarily alienate m a n a g e r s from the earlier era.
whose talents they m a y need in future ventures,
t h r o u g h a frontal assault o n old approaches.
Instead, they persuade individuals toward new
concepts whenever possible, co-opt or net, tralize serious o p p o s i t i o n if necessary [43], or
move t h r o u g h zones of indifference [5] where
early changes will not be disastrously opposed.
U n d e r the best circumstances, they find ' n o
Ome~la. Vol. I0,
lose" situations that activate all important
players positively towards new c o m m o n goals.
For e.,;amp[e:
After the "goodness to greamess' conference described
above. General Mills had t~o major strategic thrusts: ~II
~o expand internally' and through acquisitions in food
related areas and (21 to acquire nev, growth centers
based on General Mills" marketing skills. Neither of the
two critical po,*,er centers--the more traditional product
groups nor the strong finance acquisition g r o u p - - w a s
foreclosed from participation and active involvement in
the new strategy. In fact. both were stimulated to support it for their own future benefit.
Successful executives tend to honor legitimate differences in views concerning even
major directions and note that initial opponents often thoughtfully shape new strategies in
more effective directions. Some may become
active supporters as new information emerges
to change their views. But consensus is not
always possible. Strong minded executives
sometimes disagree to the point where they
must be moved to positions of less influence or
stimulated to leave. And timing can dictate
very firm top level direction at key junctures.
Consciously structured flexibility
Flexibility is essential in dealing with the
many 'unknowables' in the total environment.
One cannot possibly predict the precise form
or timing of all important threats and opportunities the firm may encounter. Logic dictates
therefore that managers purposely design flexibility, into their organizations and have
resources ready to deploy incrementally as
events demand. This requires:
(11 proactive horizon scanning to identify the
general range, scale, and impact of the
opportunities and threats the firm is most
likely to encounter;
(2) creating sufficient resource buffers, or
slacks, to respond as events actually do
unfurl;
(3) developing and positioning "champions'
who will be motivated to take advantage of
specific opportunities as they occur;
(4) shortening decision lines between such persons and the top for rapid system response.
o~a~ it) 6--D
.\o. 6
621
These--rather
than
pre-capsuled
land
shelved) programs to respond to stimuli which
never occur quite as expected--are the keys to
real contingency planning.
The concept of resource buffers perhaps
requires some amplification to suggest their
strategic nature.
For example:
Exxon set up its Exploration Group to purposely undertake the higher risks and longer-term investments necessary to search for oil in new areas, and thus to reduce ~he
potential impact on Exxon if there were sudden unpredictable changes in the a~ailabilit~ of Middle East oil.
Instead of hoarding cash, Pillsbury and General Mills
sold off unprofitable businesses and cleaned up their
financial statements to improve their access to external
capital sources for acquisitions. Such access in essence
provided the protection of a cash buffer without its
investment.
IBM's large R & D facility and its project team
approach to development assured that it had a pool of
people it could quickly shift among various projects to
exploit interesting new technologies opportunistically as
they developed.
With such flexible patterns designed into the
strategy the enterprise is proactively ready to
move on those thrusts that by their very nature
may have to evolve incrementally.
Trial balloons and systematic waiti,o
These are often the next steps for prepared
strategists. As Roosevelt awaited a critical
event like Pearl Harbor, the strategists may
have to wait patiently for the proper option or
precipitating event to appear.
For example:
The availability of desired acquisitions or real estate may
depend upon a death, divorce, tiscal crisis, management
change or erratic economic break. Technological
advances may await new knowledge, inventions or lucky
accidents. Or planned market entries may' not be wise
until new legislation, trade agreements or competitive
shake outs occur. Very often the optimum strategy
depends on the timing and sequence of such random
events. For example the timing and nature of SDS lnc.'s
availability was a proximate cause of both the date and
results of this first Xerox entry into computers.
Executives may also consciously launch trial
concepts like Mr McColough's "Architecture of
Information' or Mr Spoor's 'Super Box' in
order to attract options and concrete proposals. Usually these trial balloons are phrased
in very broad contextual terms. Without mak-
622
Quinn-- 3,1anaqinq Strate~ties Incrementally
ing a commitment to any specific solution, the
executive activates the organization's creative
abilities [46]. This approach keeps the
manager's own options open until substantatire alternatives can be evaluated against each
other and against concrete current realities.
And it prevents practical line managers from
rejecting desirable strategic shifts because they
are forced to compare "paper options' against
what they see as well-defined, urgent needs.
CreatimJ pockets of commitment
This may be necessary for entirely new strategic thrusts. The executive may encourage exploratory projects to test options, create
necessary skills or technologies or build commitment for several possible options deep
within the organization. Initial projects may be
kept small, partial, or ad hoc, not forming a
comprehensive program or seeming to be integrated into a cohesive strategy. At this stage
guiding executives may merely provide broad
goals, zt proper climate and flexible resource
support, without being identified with specific
projects [46]. In this way they can avoid escalating attention to any one solution too soon
or losing personal credibility if it fails. But they
can stimulate those options which lead in
desired directions, set higher hurdles for those
that do not or quietly have them killed some
levels below to maintain their own flexibility.
Executives can then keep their own options
open, control premature momentum, openly
back only winners and select the right moment
to blend several successful thrusts into a
broader program or concept [49]. They can
delay their own final decisions on a total thrust
until the last moment, thus obtaining the best
possible match-u p between the company's
capabilities, psychological commitments, and
changing market needs.
For example:
For years IBM hats made the technical "shoot out" a
portion of its style in managing development programs.
They a[Io~ various teams to work independently on
alternative approaches to a desired solution. Then they
have the teams demonstrate their approach in a prototype competition. Top m a n a g e m e n t maintains the right
of ultimate choice. But the winning team is already committed to its approach and ready to champion it in the
organization. Such parallel development improves each
team's motivation to invent and progress, enhances the
quality of information used to critique each approach,
creates genuine options, and allows final choices to be
made as near the marketplace as possible. B~ increasing
the effectiveness of derisions, the etficienc~ of development impro;es despite the apparent cost of" parallel development.
Similar techniques ha~e been used by Bell Laborutories, Pilkington, United Technology. and other successful technical groups.
Crystallizing )bcus
Crystallizing focus at critical points in the
process is. of course, vital. Sometimes executives will state a few key goals at an early stage
to generate action or cohesion in a difficult or
crisis situation. But for reasons noted, guiding
executives often purposely keep early goal statements vague and commitments broad and tentative 1-37]. Then as they develop information
or consensus on desirable thrusts, they may use
their prestige or power to push or crystallize a
particular formulation. Despite adhering to the
rhetoric of specific goal setting, most executives
in my study were careful not to state many new
strategic objectives in concrete terms until they
had carefully built consensus among key
players [2l]. To do otherwise might inadvertently centralize their organizations, preempt
interesting options, provide a common focus
for otherwise fragmented opposition, or cause
the organization to undertake undesirable
actions just to carry out a stated commitment.
Because the net direction of an organization's
goals ultimately reflects a negotiated balance
among the imperatives felt by the dominant
executive coalition [33] and the most important power centers and stakeholders in the
enterprise [14], the last thing an executive
wants is to weaken his or her position by creating an unintended counter coalition. When
to crystallize viewpoints and when to maintain
open options is one of the true arts of strategic
management.
For example:
The principal stockholder in a 5200 million drilling
c o m p a n y wanted the company to grow relatively rapidly
by selective acquisitions. But when its Board representafive presented a detailed plan outlining proposed areas
for growth and diversification, the proposal was stymied.
Other Board m e m b e r s - - b a s e d on limited experience-took a rigid stance on one specific aspect of the plan.
acquisition of "service companies' supporting the line.
No progress was made until the principal stockholder
went back and sold the Board on an idea they all could
accept, growth through acquisition. As Board members
became comfortable with this broad concept it became
possible later to reintroduce the idea of "service
companies" and allay the Board's fears with a specific
example.
Omeqa. ~ ol. I0..Vo. 8
Formalizing c'ommilmenl
This is the final step in formulation. As partial consensus emerges, the guiding executbe
may crystallize events by stating a few broad
goals in more specific terms for internal consumption. Finally when sufficient general acceptance exists and the timing is right, the decision ma~ appear in more public pronouncements. For example, as General Mills divested
several of its major "old line" divisions its
annual reports began to state these as moves
"to concentrate on the company's strengths"
and "to intensify General Mills" efforts in the
convenience foods field', statements which it
would have been unwise or impolitic to make
until many of the actual divestitures had taken
place and a new management coalition and
consensus had emerged.
As each major new thrust comes into focus
strategic managers insure that some individualis) feel responsible for its execution. Plans
are locked into programs or budgets, and control and reward systems are aligned to reflect
intended strategic emphases [10]. Since so
much has been written on this subject. I will
avoid details here.
Contit~umq d~vzamic'.~ and mutati,u.i consensus
Unless continuing dynamics and mutating
consensus quickly follow initial implementation. old crusades become the new conventional wisdom and the organization fails to
prepare, itself for new concerns and concepts.
In trvin,, to build commitment, executives
often surround themselves with people who
strongly identify' with the new strategy. These
supporters can rapidly become systematic
screens against new views. Even as the organization arrives at its new consensus, guiding
executives must move to insure that this too
does not become inflexible. Effective strategic
managers therefore immediately introduce new
focus and stimuli at the top to begin mutating
the very strategic thrusts they have just solidified--a most dimcult but essential psychological task. Thus strategy formulation in successful lar,,e organizations becomes a continuous
evolving, political, consensus building process
with neither a finite beginning nor end.
N o t a linear process
While generation of a strategy generally
flows along the sequence presented, stages are
623
by no means orderly or discrete. Few executives manage the process through all phases
linearly. Any single decision may well involve
numerous loops back to earlier stages as unexpected issues are encountered. Or decision
times may become extremely compressed and
require short circuiting leaps forward when
crises suddenly appear and options narrow
precipitously. The strategy's ultimate development involves a series of nested partial decisions (in each strategic area} interacting with
similar decisions in all other areas and with a
constantly changing resource base. Pfiffner
[35] has aptly described the process as "'like
fermentation in biochemistry, rather than an
industrial assembly line". The validity of a
stratem,,., lies not in its pristine clarity, or ri~,or-,
ously maintained structure, but in its capacity
to capture the initiative, to deal with unknowable events, to redeploy and concentrate
resources as new opportunities and thrusts
emerge and thus to use resources most effectively toward selected goals.
Each major segment of a strategy is likely to
be in a different phase of its d e v e l o p m e n t - from initial awareness toward ultimate comm i t m e n t - a t any given moment. The real integration of all these components into a total
enterprise strategy takes place primarily. in the
minds of individual top executives. Some portions of the strategy may be seen the same way
by all, but each executive may legitimately perceive the overall balance of goals and thrusts
slightly differently [29]. Some differences may
be openly expressed as issues to be resolved
when new information becomes available:
others may remain unstated, hidden agendas to
emerge at later dates; still others may be
masked by accepting a broad statement of
intention that accommodates many divergent
views within its seeming consensus--while a
more specific statement might be divisive.
Events often move almost imperceptibly from
awareness, to concern, to experiments, to
options, to partial acceptance, to momenta, to
consensus, to formal reinforcement. The process is so continuous that it may be hard to
discern the particular point in time when
specific clear-cut decisions are made.
INTEGRATING THE STRATEGY
Nevertheless. the total pattern of actions,
624
Qt6mz -~,l~maqinq Strate~ties Incrementally
though incremental, does not remain piecemeal
in well-managed organizations. Effective executives constantly reassess the total organization,
its capacities and needs as related to surrounding environments. The,,' seek new cohesive patterns which integrate interim decisions made in
subordinate strategies. To coordinate these decisions cross-sectionally, wise managers use a
variety of formal and informal techniques.
They see that the teams developing
subordinate
strategies
have
overlapping
members. They require periodic briefings and
reviews for higher echelon groups to bring a
total corporate view to bear and to learn from
those with more detailed knowledge. They use
formal planning techniques to interrelate and
evaluate resources required, benefits sought
and risks undertaken. Some use highly developed scenario techniques or complex forecasting models to better understand basic relationships among specific subsystems, the
total enterprise, and its critical environments.
Others create specialized staffs, 'devil's advocates', or "contention teams" to make sure that
all important aspects receive thorough evaluation. These techniques help in specific situations. But two other concepts lie at the core of
most strategic integration.
eaucracies and undesirable rigidities in the
plans themselves.
As noted, careful professionalism in planning
can pay high dividends. Nevertheless, few effective planners rely primarily on annual planning
processes to create overall strategies. In larger
companies they often delegate those procedures to subordinates while they focus on
other modes of intervention. In parallel with
the concepts developed above, they carefully
orchestrate ad hoc efforts designed to:
(1) teach top managers about the future:
(2) seJtse developing strategic needs early;
(3) build e x e c u t i v e awareness
(4) broaden
action;
support and
about
options:
comfort levels for
(5) crystallize and communicate partial con-
sensus as it emerges
(6) stimulate a few key executives' personal
commitment toward new options:
(7) build attitudes, communication channels
and resource buffers that make the organization more flexible toward change.
CoJtcentratin9 on a fi, w key thrusts
Strategic managers constantly seek to distil
out a few (six to ten) 'central themes' that draw
the firm's diverse existing activities and new
probes into common cause 1-45]. Once identified, these help maintain focus and consistency
in the strategy. They make it easier to discuss
and monitor intended directions. In ideal circumstances, these themes can be converted into
a matrix of strategic 'thrusts" or 'missions' cutting across divisional plans and dominating
other criteria used to rank divisional commitments [-39]. Each division's plans have to show
enough effort to accomplish its share of each
thrust, even though this means overriding
short-term present-value or rate-of-return
rankings on projects within the division [34].
Texas Instruments and General Electric
Company have provided some well publicized
formal models for doing this. Unfortunately,
few companies seem able to implement such
complex planning systems without generating
voluminous paperwork, large planning bur-
These interventions take on many different
forms. One can only suggest--not catalogue-interesting approaches here.
Teachin 9 (the chief planner of a large chemical
company):
' F o r the price of one professional and his secretary. 1
can design for myself and a few ke3 executives a biweekly series of scminars led by the very best people in
the world. There's just no comparison between the
potential impact of the two investments. And keeping
my stall" to m i n i m u m leveIs avoids political exposure."
Commitment (the vice president of strategic
planning of a large information products
company):
"'[ move when [ know a top executive is about to make a
speech or internal presentation where a reference about
the future would be useful. [ brief him or his speechwriters on potentially exciting developments or ideas I
think may be ready for public exposure. Sometimes this
is just a device to increase the executive's awareness of
needs the c o m p a n y must respond to. Once an executive
Ome~ta. ~ ol. I ~ .V<). 4
has spoken publicly about an issue, he is much more
likel,, to feel he understands it and is committed to doing
something about it. If I can get him to implicitly endorse
a goa! or a specific option in public, he ~i[l feel e~en
more committed."
Such "whispering in the ears of the gods" helps
create awareness and set the hook of initial
commitment in key people. As a coalescing
idea picks up momentum, planners often seek
out its main sources of support and opposition
and develop further processes to "assess" it or
increase its psychological and potential viability.
3,1oment,mt (a very effective chief planner of a
large consumer products company):
"'1 may first ha~e to build tip a more adequate data base
on the subject. Then I arrange for some articulate proponents or neutral parties to prepare b a c k g r o u n d papers
on the topic with no recommended actions presented. As
these endeavors accumulate weight a n d o r support. [
may set tip :in informational meeting or two to inquire
where we should go from here and what the prime concerns of o p p o n e n t s are. My office can often coordinate
the accumulation of necessary data for the next stage of
discussions. Finally. if necessary. I can arrange for a line
executive to establish a carefully selected committee to
look into the issue and come forward with recommendations. Of. if 1 can get a partictllar m a n a g e r to s p o n s o r
the idea. it can be put forward as a trial balloon in his
next rormal plan."
Such legitimate interventions can help a new
option over the hurdles of ignorance and suspicion it always encounters. As the idea gains
momentum, planners can further stimulate its
acceptance by' having their staffs prepare
special studies on it and by including inquiries
about it in the instructions issued for drawing
up long-range plans. Finally, as consensus
emerges, they see that the concept appears in
the assumptions, goals, and formal strategy
statements of various groups. But this is the
terminus of the strategy process. Not the
essence of it.
625
easily disagree on a proper balance of actions.
In response to changing pressures and coalitions among these groups, the top management
team continuousl~ forms and reforms its own
coalitions aligned around specific decisions.
These represent various members" different
values and interests concerning the particular
issue at hand and are sources of constant
negotiations and implied bargains among the
leadership group [43].
Most major strategic moves tend to assist
some interests--and executives" careers--at the
expense of others, Consequently, each set of
interests can serve as a check on the others and
thus help maintain the breadth and balance of
the overall strategy. Some managements try to
insure that all important policies have representation or access at the top. And the guiding executive group may continuously adjust
the number, power or proximity of these access
points to maintain a desired balance and focus
[5l]. People selection and coalition mana<,ement are the ultimate controls top executives
have in guiding and coordinating their
companies" strategies. These must be managed
with sophistication and care to achieve desired
degrees of stimulation, objectivity, cohesion
and dynamism. The following quotations, the
first by a CEO, the second by' Robert Hatfield
when Chairman of Continental Group, make
the point well:
(1)
"'If good peopleshare the same values, the',' ,.,.ill instinctively act together. We must k n o ~ h o ~ people ~ill respond intuitively ~ h e n they are thousands of miles
a w a y . . . . We work hard and consciously to understand
each other and where we :ire going. If ~e know these
things and c o m m u n i c a t e openly', our actions will bc sensible and cohesi,,e. Yet we'll ha,,e the flexibility to dcaI
with changing en,.ironments. T h e s e - - a n d the choice of
top-flight people are our real controls f o r c o o r d i m i t i n g
strategy development."
(2)
Coalition management
At the heart of all controlled strategy development lies coalition management. Top managers
operate at a confluence of pressures from:
stockholders, environmentalists, government
bodies, customers, suppliers, distributors, producing units, marketing groups, technologists,
unions, special issue activists, individual
employees, ambitious executives and so on,
where knowledgeable people of good will can
"'How do you manage the strategic process'? It all comes
d o w n to people: selecting people. First. you look for
people with certain gener,tl characteristics. They have to
be bright, energetic, flexible. ~,,ith high integrity or the,,'
won't be adaptive and last in the long run. A m o n g these.
you look for the best people with the kinds of experience
and interests likely to lead the c o m p a n y in directions
you ,.',ant it to go. But you have to be careful with this.
You don't want just 'yes men' on the directions you
belie;e in. You want people who can help you think out
new a p p r o a c h e s too. Finally. you purposel.~ team people
with s o m e w h a t different interests, skills, and management styles. You let them push and tug a bit to make
626
Quinn
3,1anaqinq Srrateqles lncremcntaltt
sure different approaches get considered. And you do a
lot of chatting and informal questioning to make sure
}ou stay informed and can intervene if ?ou ha~e to."
CONCLUSIONS
In recent ,,'ears. there has been an increasing
chorus of discontent concerning corporate strategic planning. Many managers are concerned
that despite elaborate strategic planning systems, costly staffs for this purpose, and major
commitments of their own time. their most
elaborate strategies get implemented poorly, if
at all. These executives and their companies
have generally fallen into the classic trap of
thinking about strategy formulation and implementation as separate sequential processes.
They have relied on the awesome rationality of
their formally derived strategies and the inherent power of their positions to cause their organizations to respond. When this does not
occur, they become bewildered, if not frustrated and angry.
Instead. successful managers who operate
logically and proactively in an incremental
mode build the seeds of understanding, identity
and commitment into the very processes which
create their strategies. Careful incrementalism
allows them to improve the quality of information used in decisions and deal with the
practical politics of change--while they step by
step build the organization's momentum
toward the new strategy and the psychological
motNation to carry it through. In large enterprises strategy' formulation and implementation are largely overlapping, simultaneous and
continuous functions. In their formulation processes, successful strategic managers generally
create the awareness, concern, options, initial
movement, personal identity and organizational commitment that cause the strategy to
be already flowing toward effective and flexible
implementation before it is ever--if ever-announced in detail.
NOTES AND REFERENCES
1. THE STUD'.' (pub. 1980, see [39]). From diverse industries a sample of some ten multibillion dollar
companies ~as selected. Each had recently undergone
major strategic changes. Important participants were
asked how the overall strategy and each of its important components had come about. With each
company's help I tried to document all statements as
carefully as possible from both primary and secondary
sources. These materials were integrated and published
in a series of detailed case studies ~hich make up the
data base I refer to here. Participating companies
v,ere: General Mills, Inc. and PillsbuD C o m p a n ? tconsumable productsl: Exxon Corporation and Continental Group tbasic processesl: Xerox Corporation and
Pilkington Brothers Ltd. tad~anced technolog~l: and
General Motors Corporation. Chr?sler Corporation
and Volvo AB Iconsumer durables),
2. ANSOFF HI {1965) Corporate Strategy: .4n .4nah'ric
Approach to Business Policy Jbr Grm~th and Expansion.
McGrav,-HilL New York.
3. AXSOFF HI (19721 The concept of strategic management. dl Bus. Pol. 2~4). 2-7.
4. ARG'~RIS C (19771 Double loop learning in organiz*
ations. Harc. Bus. Rec. 55i5!. 115-25.
5. BARNARD CI (1938) The Functions ql the Executit'e.
Harvard University Press. Cambridge. Massachusetts:
provides perhaps the first reference to the concept of
the "zone of indifference'.
6. BOWleR JL (1970) Planning within the firm..4m, Econ.
Rec. 60121. 186--194: notes that executives place such
diversif?ing side bets to reduce their personal risk as
well as corporate risk.
7. CARrt':R EE (19701 A behavioral theory approach to
firm investment and acquisition decisions. Unpublished doctoral dissertation, Carnegie-Mellon University: notes that initial goal consensus by the dominant
coalition is by no means common.
8. Ca~trt~R EE (19711 The behavioral theory of the firm
and top-level corporate decisions. Adm. Sci. O. 16{4).
413-28 : describes active search processes by executives
to define new problems, not just to respond to recognized problems.
9. CHANIkLER AD 119621 Stratc~ly and Structure: Chapters
in the Ilistory of the lmlustrial Enterprise. MIT Press.
Cambridge, Massachusetts.
10. Cotlt-y KJ & CYI!RT RM (19731 Strategy: formulation
implementation, and monitoring. Jl Bus. 4613). 349-67.
11. CYERT RM, DILl. WR & MARCH JG 11958) The role of
expectations in business decision making. Adm. Sci. Q.
3(3), 307-40.
12. CYERT RM & MAI',CH JG (19651 ,-I Behacioral Theor)"
of the Firm. Prentice-HMI, Englewood Cliffs, New
Jersey.
13. DANU!L DR (19661 Reorganizing for results. Harc. Bus.
Rrc. 44(6L 96-I04.
14. G~ou(;lot, P (1973) The goal paradigm and notes
towards a counter paradigm. Adm. Sci. Q. 1813).
291-310: suggests a wider negotiation involving lower
level task groups as well.
15. GILXIORti FF(1973) Overcoming the perils of advocac~
in corporate planning. Calif 5hjt Rec. IN3), 127-37.
16. GUTH W D {1971) Formulating organizational objectives and strategy: a systematic approach. Jl Bus. Pol.
2(1), 24--31: provides an excellent example of this
approach.
17. HENDERSON B (1981 } The Concept ~ Strategy. Boston
Consulting Group, Boston. Massachusetts: describes
this process in Social Dar,ainist terms that, as in the
biological analogue, successful companies are those
which assume the specific differentiating characteristics
necessary to outperform all others in their selected
niches.
18. KLEIN H 11981} Environmental anal?sis and forecasting. JI Bus. Strategy 1[31.
19. LIND~LO~.I CE {1968) The Policy-Making Process.
Prentice-Hall. Englewood Cliffs. Ne~ Jersey; notes
that the incremental manager is a shre~d, resourceful
problem solver, wrestling bravely with a universe he is
wise enough to know is too big for him.
Omeqa. Vot. I0. No. 6
20. LIND~IL()~I DE 11959~ The ~cience of "muddling
t h r o u g h ' Puhl. Ad,n. Rer. 19q2). 79 83: is the classic
statement of this approach.
21. LOCKE EA 119681 Tov.ard a theor? of task motivauon
and incentives. Orq. Behac. Hum. Pert[ 3~21, 157-89:
suggests that assigned goals have effect onl? to the
extent that the.,, are accepted and internalized b', the
subordinate.
22. M:,C'E ML & MO>~TOO~,tER~ G G (1962) Management
Problems of Corporate Acquisitions. Harvard Unitersit?. Boston. Mvssachusetts: Iaid out the classic pattern
for this approach.
23. ,~|-',NCHESTER W [ 19781 American Caesar: Douglas
),hwArrhur 1,'~8¢~1964. Little Brown. Boston. Massachusetts.
24. MARCH JG. OLSEN JP 11976) (with contributions by
CHRISTENSEN S, COHEN MD. ENDERUD H, KREINER K.
ROMELAER P, ROMMETVEtT K. STAVA P & WEINER SS)
.4mhiquity and Choice in Orqanizations. Universitetsforlaget. Bergen: suggest that these suggestions become
"garbage cans of ideas" unless properly guided.
25. MARCH JG & SIxtO>/ HA (19581 Cognitive limits on
rationality. Or#a,izations. John Wiley. New York: note
that as members of the top management coalition
sponsor an idea a process of "uncertainty absorbtion"
takes place. People begin to judge the competency' of
the sponsor rather than the evidence presented, and
that individual's credibilit', and power suffer if the
result is wrong.
26. M~\RSCHAK J fl954) Toward an economic theory of
organizations and information. Decision Processes (Eds
THR..Xt.I. RM, C(x):,lus CH & DAvis RL). John Wile?',
New York.
27. N'IINrZt~B.Rr.; H (1973) The Nature of Managerial Work.
Harper &.Row, New York.
28. MINI'ZBI!RG H (19731 Strategy making in three modes.
('alill Mgt Rec. 16(2), 44-53: cites different modes of
strategy formation as well. Elements of all three modes
wcrc seen in the largest companies of my sample, but
all ,,,,ere linked by incremcntalism.
29. MIyrzmR¢; H, R..MSINC;HAN1 P & THt'ORI'T A (1976)
The structure of 'unstructured' decision processes.
Ad,m Sci. (2. 21121. 246--75.
30. Ni wH_t. A & SIx*oN HA {1972) Hanlan Problenl Soh,mq. Prentice Hall, Englewood Cliffs, New Jersey; note
that ~ h e n faced with complex contextual decisions,
executives tend to break them down into sub-decisions
to which more routinized or understood decision procedures c~,n be applied.
31. NORMANN R (19771 Manaqement Jbr Growth (trans.
ADLliR N). John Wiley, New York.
32. P',SCALI- R & ATHOS A (19811 The Art oJ" Japanese
3,1anaaemenr. Harvard University Press, Cambridge,
Massachusetts; suggest that perhaps the most distinguishing characteristic of most successfully managed
US companies is the clear presence of a "superordinate
goal' that becomes a portion of the value system
influencing all major decisions on a day-to-day basis.
33. Pi!Rttow C (1961) The analysis of goals in complex
organizations. Am. Sociol. Rec. 26{ 1). 854-66: stresses a
dominant coalition which negotiates key goal relationships within itself and uses its combined power to
enforce these as organization goals.
34. Pt:ti~f:tia J, SALANCIK GR & LEBLEBICI H (I976) The
35.
36.
37.
38.
39.
40.
4I.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
027
effect of uncertaint? on the use of social influence in
organizational decision making. 4din. 5ci. Q 21!21.
227-45.
PFIF~,',.ER JM i1960~ Administ:-ati',e ra~,ionaIi D. Pi~hl.
.4din. Rec. 2013t. 227 45.
QUtN>/ JB (1961~ Long range ptanning of industrial
research. Hart. Bus. Rec. 39141.
QUINN JB tl977) Strategic goals; proces~ and politics.
Sloan .'~lgt Rec. 1911): develops this argument in depth.
QUINN JB 11979) Technological innovation, entrepreneurship, and strategy,. Shmn 'q4r Ret. 20~31: amplifies
this concept.
QL'INN JB {1980) Strate~lie.~ liJr Chwlqe: Lo~/ical Im'rementalism. Do',',,' Jones lrv. in. Home,a ood. Illinois : develops the argument in depth.
Quotation from ~, copyrighted case b,. James Brian
Quinn {1977-19811 Dartmouth College. Hanover, Ne',,,
Hampshire. Available upon request.
RHENMAN E 119731 OuIaniz~lHon Thee,'l /br LottORanqc Phmnin~t. John Wiley, Ne'* York.
ROTHSCHILDWE/19761 Puttiml ig all Toqerher: a Guide
w Strategic Thinking. A M A C O M . New York.
SAYLES LR (19641 3dana#erial Behacior: Administration
in Complex Organizatio~ts. McGraw-Hill, New York:
provides an excellent over;jew of the processes
involved.
SCHAFFER WB (1973)What ha',e v,e learned about c o t
porate planning? .'~l~lt Rec. 62181. 19-26; lists other
benefits, but timse ~ere repeatcd[? confirmed by top
managers.
S,',taLVlia DJ & Rt.(;Gt.t!S RL 11966) Six business
lessons from the pentagon. Hare. l:lus. Rcr. 44{2).
64-75; develop this form of missions planning in detail.
SOI!LIU!RG PO (1967) Unprogrammed deci:,ion making.
Ind. 3,1qt Rcc. 8(2). 19--29: dc,.elops a simiDr concept
he calls a "trap search'.
VANCIt. RF & LORANGE P 11975) Strategic planning in
diversified companies. Hun'. Bu~. Re~. 53111, 81-90:
also note that formal strategic planning is inappropriate for acquisition planning besond setting broad
goals and guidelines.
YON HIPPLE E (I977) The dominant role of the user in
semiconductor and electronic process innovation.
IEEE Trans. EoM2412).
WtTTti E 11972) Field research on complex decisionmaking processes--the phase theorem. Int. Stud. 3.Igt
Or,q. 2121, 156-82: notes up to 51 specific decisions in
observed strategic processes v, hich had to be blended
over a several-year time frame.
W'a.APt' HE {1967) Good managers don't make policy
decisions. Hare. Bus. Rec. 4515). 91-99.
ZALEZ>iIK A 11970) Power and politics in organizational life. Haru. Bus. Net'. 48i3i: develops this thesis.
He notes that confusing complicance with commitment
is one of the most c o m m o n and difficult problems of
strategic implementation. Often organizationaf commitment may override personal interest it the former is
carefull? developed.
ADDRESS FOR CORRESPONDENCE: Profi'ssor James Brian
(2uinn, Amos Tuck School of Business Administration.
Dartmouth College. Hanocer, .\H 03755, USA.