9 - SAE Re-Viewing Strategy Processes (Lenses)

Simple Rules
Type
How-to rules
Boundary rules Priority rules Timing rules
Purpose
Spell out key features of execution – ‘What makes our process unique?’
Focus managers on which opportunities can be pursued and which should not Help managers rate the accepted opportunities Synchronise managers with the pace of emerging opportunities and other parts of the company Help managers decide when to pull out of yesterday’s opportunities
Re-Viewing Strategy Processes
Ron Bradfield
Graduate School of Business University of Strathclyde
Schools of thought in Strategy
Ansoff Chandler Sloan Drucker Porter

And establish simple rules to create adaptive tension
Implications:
No one “right” approach
Managers need to operate with all 3 lenses
Requires “reflective” managers The dangers are:
Outcomes
Profit-maximizing
Henderson Aldrich Hannan & Freeman Williamson
Processes
Deliberate
CLASSICAL
EVOLUTIONARY
Emergent
SYSTEMIC
Morgan Granovetter Whitley Pascale Shrivastava
Calculated as … economic earnings less charge for weighted average cost (WACC) of capital employed.
But:
Failure to achieve ownership of plans
Detail rather than vision Informed overload Strategy as „the plan‟ Planning as ritual
Assumptions of the Experience Lens
PROCESSUAL
Cyert & Marsh Simon Mintzberg Pettigrew
Pluralistic
The Three Strategy Lenses
The strategy lenses are different ways of viewing strategy development: As design - logical, analytical and planned As experience - adaptation, cultural and political As ideas - emergent from diversity and variety
(After J-C Spender)
The Cultural Web of an Organisation
Stories Symbols
Rituals & Routines
Paradigm
Power Structures
Control System
Organisational Structures
Managers need to find ways of encouraging variety and diversity


This will not be achieved by tight strategic control
Formal plans and systems are de-emphasized Managers can create context
Unitary perspectives on managing
A lack of realism about the role and limitations of top management
Forms of Strategy
Unrealised Strategy Deliberate Strategy Realised Strategy
The Ideas Lens
Ideas are generated through variety:
Deliberately:
Experiments “Low cost probes” Moving people around Recruiting “outsiders” Incentives Reduction of boundaries Adaptive tension / edge of chaos “Simple rules”
Individual and collective experience is central
Therefore culture and history strongly influences strategic thinking and choices
Bargaining and negotiation determine strategic direction
common and taken for granted in an organisation …
The Paradigm
Development of Strategy
Implementation
Corporate Performance
If Unsatisfactory
STEP 1 Tighter control STEP 2 Reconstruct or develop new strategy STEP 3 Abandon paradigm & adopt new one
The Design Lens Highlights:
The potential benefits of systematic thinking to handle complexity and uncertainty
The need for planning and control
The benefits of analytic tools and techniques
But how do we account for:
Penicillin? Mobile Phones?
The Walkman?
Post Its?
Microwave Ovens?
Paradigm (or Recipe)
… the beliefs and assumptions held in
The Ideas Lens
…. builds on complexity and
evolutionary theories
The Ideas Lens
Ideas are generated through variety: Naturally:
Environmental Change and unpredictability Diversity of experience Informal links/”weak ties” Intuition Imperfect copying
Intended Strategy
Mintzberg
Emergent Strategy
Sns are instruments whose purpose it is to create economic value on behalf of those who invest risk taking capital in the enterprise. This clear purpose should drive companies regardless of whether they are privately or publicly held … and therefore business strategies should be judged by the economic value they create for the shareholders.
PWC
Economic Value Added
Defined as “… a performance measurement of economic return which takes account of profitability, the total cost of capital and the amount of assets under a manager‟s control”

Management Implications
Managers cannot know or plan the future


Managers need to be aware of, sensitive to and responsive to the wider environment