Does Strategy Really Matter?
Andrew Campbell
This provocative question – the subject of EBF’s Winter 2001/2 edition (EBF Issue 8) –
stirred the passions of three leading international strategy professors and a director of
Orange in a live debate organised by the Association of MBAs and EBF in December
2002. Chaired by Tim Dickson, EBF’s Executive Editor, the panel comprised Richard
Whittington, Fellow at New College and Professor of Strategic Management at the Saïd
Business School, University of Oxford; Joseph Lampel, Professor of Strategy at Cass
Business School; Andrew Campbell, a Director of the Ashridge Strategic Management
Centre; and Patrick Harris, then Director of Creaticity at Orange and now co-founder of
ThoughtEngine, a strategy and creativity consultancy.
Whittington opened the debate with the proposition that strategy matters to “more
people, more often” than ever before. Even in the so-called ‘new’ economy, he
maintained, there are “great market positions out there” (Nokia, Cisco, Marks and
Spencer) and “enduring, non-replicable, non-substitutable skills and resources” (in the
likes of Dell, GE, Mitsubishi and Daimler Chrysler). Shareholders and the marketplace,
moreover, increasingly scrutinise the creation of these ‘strategic assets’ and what
managers are doing to protect them. In a fast moving environment strategy needs to be
‘done’ more frequently, not less; decentralisation and the replacement of central
planning by a continuous process of ‘middle-up-down’ interaction means it is happening
in more companies at lower levels of the organisation (Ericcson in mobile phones and
Pharmacia in tobacco patches being good examples). The lesson is that more people
need to become better strategists.
Lampel said that the more successful the strategy, the less visible it becomes. Like the
proverbial Cheshire Cat it should disappear completely leaving only a smile on the face.
In practice all strategies fall short. Many organisations respond by declarations,
pronouncements, and bold initiatives, often accompanied by cries for leadership. The
performance paradox of strategy shortfall is that the organisations that make the most
fuss about their strategy are often the organisations with the greatest deficiencies in their
strategy. They get written about more than other organisations, and their improvements,
temporary or marginal, are often described as dramatic. When they come to grief, there
is a double disillusion. There is disillusion with the company, but there is also disillusion
with the particular strategy, and when taken in combination with all other similar cases,
there is increasing disillusion with the idea of strategy more generally. Strategy matters
most when it is needed most. Unfortunately, when driven by needs, organisations, like
people, are often not entirely wise in the way they go about urgently addressing needs.
There is a marked vulnerability for buying ‘off the shelf’ answers, to seek elegant
models.
What is often forgotten in the midst of the euphoria is that there are few ‘killer strategies’
out there. Most are at best a creative rendition of classic principles. For strategy to
matter it must always begin with an understanding of what does not change every time a
new technology or opportunity comes along. Call this the classic view of strategy. By
contrast we have the Romantic view which extols innovation and transformation on a
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continuing basis. There are times when this view is right. But when it is right, and when it
makes a genuine contribution, it is absorbed and becomes part of the craft and art of
strategy.
Campbell challenged other speakers to compare companies that strategise a lot with
those that don’t, observing that his own research shows little correlation between formal
strategy and corporate success. It is quite possible to find examples of businesses going
forward without missions, visions or logical strategic plans which can boast impressive
results. Success, according to Campbell, is related to the wisdom, skill and
purposefulness of individual managers. Strategy concepts can help managers improve
their wisdom, skill and purposefulness but often do not. This is not as worrying for the
field of strategy as it might seem. Campbell sees strategy concepts as an essential part
of the education of managers – as vital background, which helps managers get wiser
faster. He pointed to the dot.com bubble as an example of a situation where use of
strategy concepts could have helped managers (and did help some) be wiser. He was
distressed, however, to note the joy with which many academics and managers threw
out the tried and tested strategy concepts and declared a ‘new economy’ with new
strategic rules. Clearly the quality of education about strategy concepts still needs
improving.
Harris began by stating that strategy clearly matters, but that many people have a less
than obvious understanding of what it is and that business processes can sometime
muddy the water in achieving strategic aims. “If the root of a strategic aim is to get a
herd of people moving in the same direction,” he said, “then an earthquake is more
strategic than the business planning processes of many companies.” Harris pointed to
his time creating and managing the internalised Orange Corporate Strategic Think Tank
for Hans Snook, then maverick CEO of Orange, citing examples ranging from formal
processes such as the provision of a written strategic framework for the business to
more informal activities such as web-based, company-wide discussion areas, multimedia, and even imagined ad campaigns and rumour. He reminded the audience that
good strategy and good strategists will not normally be promoted around the
organisation in a prideful display of the CEO, but instead will produce information that
first appears as common sense and, second, has the ability for individuals to interpret
and ingest the intent in their own terms. Harris discussed the need to translate strategic
messages into appropriate material for varying audiences. His real-life example for this
message was to relate a story of a conversation between himself and Jean Francois
Pontal, then CEO of Orange, regarding the need to preserve investment in the customer
phone care programme. “For the finance team, we spoke of the allowance we would
give them to ‘lose’ money in this area – to agreed levels. For the technicians, our
conversation was all about meeting Service Level Agreements for their call centre
software. But for the 8,000 customer service staff, we simply proposed the single
principle of ‘a phone is like oxygen and a customer dies after two minutes without one’.”
Article first appeared in European Business Forum, Issue 13, Spring 2003
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