Harvard Business Publishing

Does it matter that Jeff Skilling was a Harvard alumni ? Perhaps the discussion of leadership and management should necessarily include an examination of one's inner soul. One of my earliest management instructors asked this question. Are you concerned and genuinely interested in the well being of people ? If not then leave now. Surprisingly half the students did not show up for the next class. Of course the debate is much more complex.
Can US corporations compete with their Japanese counterparts while shouldering enormous healthcare and pension costs ? Also,
as technological advances lowers the demand for general labor how can society provide meaningful economic activity for the labor class ? A Darwinian approach to these issues is unconscionable. Letting the issue fall to the wayside sets the conditions for future disasters. It seems this is the road ahead.
These are not questions for small or struggling businesses whose main focus is survival. Yet for mature industries to ignore these issues will in part accelerate their demise.

I once had a discussion with a room full of armed forces personnel. One question on the table was "How do we get our corporals to think strategically?" My first question was: Do you actually want them to? And then: Do your actions demonstrate that? There were a multitude of answers to those two questions.

Training & apprenticeships are good. Strategic thinking begins by looking at the impact of your activities outside your immediate task focus. "That's not my job" or "I'm far too busy to think about what I'm doing" are the enemy of strategic thought. First line managers identify & nuture early attempts at strategic thinking among their staff (and those early attempts will be all over the place) then that is an important first step. A significant minority of managers do not do that however - and those embryonic strategic thinkers are lost.

I spent a day with a group of managers in the UK yesterday in a Strategic thinking workshop. The biggest barriers to thinking strategically that I observed were: 1) The office is the most unlikely place for strategic thinking to take place, yet many managers feel uncomfortable or guilty about taking time away from the office to think; 2) Making time time to think is really difficult in the relentless delivery focused, measurement obsessed and inward looking business culture of many large corporates; 3) Throughout formal education and early careers many managers have been encouraged to think analytically and have 'suppressed' their natural creativity and in extreme cases where they have demonstrated creative thinking have been considered 'wacky' or maverick. People do what they get 'rewarded' for. Leadership (not management) is required to develop a strategic thinking culture at all levels of an organisation.

I loved Robert Yee's anecdote about one of his first management instructors! To do something like that with credibility, the instructor must have some actual business experience. But that's another story and I digress.

The challenge with the training people to think strategically is not in the training, but in getting anyone to admit he or she needs the training. Years ago, I worked on technology strategy in the company of many top notch engineers. I once told the best among them, "No one questions your right to design a piece of equipment because you have 20 odd-years of training and degrees to back you up. Yes, people without formal training have been brilliant inventors, but they are few and far between. However, they have no qualms about challenging me, despite my track record. Why? I think it is because there have been many more brilliant strategists who have never had any formal training. And people, being human, say, 'Look at Bill Gates? Who taught him strategy? Didn't he drop out of Harvard's undergraduate program?'" Moreover, the blame for bad strategy can be deflected far more easily than blame for a bad product design.

So the incentive to learn is weak, both ex ante and ex post. What is needed is a wee bit of humility!

As the financial turmoil continues, I commend HBS for the introspection concerning their curricula and what they may have done (or could have done but did not) to shape the values of some of the alumni who played a role in getting us into this mess (W being the most prominent one).

Two classmates from my own HBS MBA class served federal prison terms for financial fraud of some type, and they were smooth and glib players with the skill to generate trust in others.

Is there a role in strategy formulation to address the core values on which an ethical strategy is based? In the executive programs on the topic I team at UCLA, this topic always arouses great controversy. Those whose comfort zone is tested by the discussion label it "too touchy feeley", those who understand the need for our leaders to be ethical too love the discussion.

Terry Schmidt, MBA 71

Strategic thinking has two components: opening up the range of decision options, and selecting the best decision by considering the full impact of the decision on all parties.

There are lots of possible techniques to expand the range of considered options. Time pressure to make the decision is usually high, and there will be one or more advocates for an immediate decision in a favored direction. Time is one variable, though, and there are probably many assumptions about boundary conditions that should be challenged. Try to document as many of the core assumptions as you can, and see what happens when you relax each one. Often, one core assumption can be altered to yield a valuable new option - a new channel, a new source of investment funds, a different pricing model, etc.

The other technique I use is to wear different hats and consider the impact of the decision from the perspectives of at least three directions: my own organization (what direction am I headed?), the most directly impacted constituent (What is my response? What happens after that?), and an uninterested observer, say a potential investor in some part of the industry value chain (Where is value growing?). These three perspectives can be expanded with the views of other constituents - a line employee, a regulator, a supplier, a channel partner, a process technology innovator - to think about the impact of the possible decisions and select the best choice.

In addition to quantifitative game theory, I recommend training in empathy and role playing to think about the impact of possible decisions on others and their possible responses to your decision.