Understanding strategy: why is strategy so difficult?

"Everything in strategy is very simple, but that does not mean that everything is very easy. "

--Clausewitz (1976: 178)

As academics, our first responsibility is to teach strategy to students who are then expected to use their skills out in the real world. A key concern we have recognized is that the word strategy means different things to different people. These differences in the meaning and conceptualization of strategy affect both academics as well as practitioners. According to Bongiorno (1993), there is neither a pattern in the way the subject is taught, nor is there any consensus on the definition of strategy. As Bongiorno (1993) points out, top universities in the country have entirely different methods of teaching strategy to business students. Some universities require MBA students to take a number of courses, while others require a single capstone course, and yet others have no strategy courses at all. The confusion surrounding the definition of strategy is another case in point.

In this paper, we do not aim to resolve all the differences that currently exist, nor do we make suggestions about how strategy should be imparted. Rather, we seek to highlight some of the difficulties that beset strategists in the field. Overall, we set ourselves two tasks in writing this paper. One is to have a better understanding as to why strategy is so inherently difficult. Two is to develop a framework at a fairly high level of abstraction from which strategizing can be conceptualized and extended. In order to develop the paper, we will (1) discuss learning and learning to learn; (2) examine the factors that make strategy so difficult; (3) the complexity, themes, and contexts of strategy; and finally (4) develop a framework to strategize. We end with a discussion section that summarizes the main points of this paper.

LEARNING AND LEARNING TO LEARN

In addition to differing definitions of strategy and the way the subject matter is taught, it is useful to examine the frameworks that have been popularized. Given that the field is highly dynamic, fluid, and complex, we take a critical view of the subject and examine some of the structures that the discipline leans on. To start with, we note that almost all strategy textbooks have a standardized way of presenting the discipline. The typical format starts with a general definition of strategy, followed by an examination of the internal and external environments, corporate strategy, portfolio management, business unit strategy, implementation, and control, and so on. Vital issues in the field like the internet, technology, globalization, domestic and foreign regulations, social forces, culture and history, the WTO, domestic and foreign interest groups, local and national politics in the international environment, and a host of relevant factors are either glossed over or simply not addressed. We do not pay enough attention about how to think about the thinking process itself.

The content of strategy that is taught does not address the many factors that exist in the real world. In the absence of an understanding of the impact of these vital issues, students are imparted a simplistic knowledge about how the world of business works. We do not create conditions to more fully incorporate the factors that take into account how the world works. Finally, we do not pay enough attention about how to think about the thinking process itself. Our knowledge, as a consequence is limited. It is important, at this point, to examine our knowledge of strategy, how it is taught, and how it is used.

From an epistemological point of view, work in cognitive psychology (Gaskins & Elliot, 1991; Palinscar & Brown, 1989; Liedtka & Rosenblum, 1998) has identified three distinct categories of knowledge. These categories are:

1. Content knowledge--How the world works;

2. Cognitive knowledge--How to think about how the world works; and

3. Metacognitive knowledge--How to think about the thinking process itself.

With its focus on content, the teaching of strategy has focused primarily on the first category with a lesser emphasis on the second, and almost none on the third. There has, therefore, been on a heavy reliance on teaching and mastering analytical techniques like SWOT analysis, portfolio management, competitor analysis, and industry structure analysis. A programmed approach to thinking has been taking place (Liedtka & Rosenblum, 1998), and the emphasis has been teaching students to think in terms of content knowledge in an essentially single-loop learning process (Argyris, 1985; Argyris, Putnam, & Smith, 1985).

Strategy students tend to get the impression that all business strategy can be conceptualized and encapsulated within the content of the prevailing paradigm--an unlikely, inaccurate, and incomplete version of reality. Students expect business problems to be understood, explained, and controlled through the repertoire of the frameworks and models that they have assimilated. Students, consequently, conceptualize each technique to be discreet and "not as a part of an overall pattern of thinking" (Liedtka & Rosenblum, 1998:294). More importantly, strategy students develop a blind spot or are unable to correctly decipher those aspects of the business world that reside outside of their paradigm. This is especially critical because the fast-paced and complex environment of business bears little resemblance to the more artificial, organized, and simplified academic world. Changing contexts imply that managers must be ready to consider, develop, and implement different ways of managing (Dunbar, Garud, and Raghuram, 1996). Paradoxically, according to Dunbar et al. (1996), when managers face turbulence in the environment, their training is to assume contextual stability with a preference for incremental adjustments in keeping with this assumed stability. Dunbar et al. go on to state:

Works such as Porter's, for example, assume a particular type

of stable, institutional context. By assuming a stable context,

Porter can focus on a limited number of criteria for assessing

effectiveness and proceed to identify categories of variables that

may affect achievement according to these criteria. By being

repeatedly presented to students in MBA programs, to

executives in corporate training programs, and to participants at

academic conferences, such work establishes a frame defining

how people think, what they think about, and what they believe

they should be thinking about. Through these repeated diffusion

efforts, specific ways of thinking become gradually

institutionalized as being the generally recognized and the

appropriate way to see, assess and act. Repeated presentation of

Porter's work, for example, illustrates how a particular

approach to strategic decisions emphasizing profit making can

become institutionalized and significantly affect both practice

and research. (1996:24)

Metacognitive knowledge--how to think about the thinking process itself--is barely addressed or taught in most academic institutions. It is the most neglected category of the three distinct categories of knowledge that have been identified. We argue that we need to step out and step back from what we term as strategy and examine the field with all its complexity and interdependent forces. We believe that metacognitive knowledge is one solution to remedy the over-emphasis on content driven strategy. Metacognitive thinking, essentially double-loop learning (Argyris, 1985; Argyris, Putnam, & Smith, 1985), suggests that students move beyond thinking about the design of strategies, and to think about the design of the process for thinking about those strategies. Double-loop learning moves the analytic techniques at the cognitive level, but connects them more powerfully to a context (Liedtka & Rosenblum, 1998). In addition to the double-loop insight, Dunbar et al. (1996) suggest that popular frames in strategy should be subject to deframing. Deframing is important because people generally do not know how to abandon the ways of thinking and acting that they have learned to rely on and are not even aware that it is an issue (Torbert, 1991).

WHY IS STRATEGY SO DIFFICULT?

In discussing the intractable and complex nature of strategy, we closely analyze the cognitive and metacognitive knowledge aspects of strategy. Consequently, we are constrained to think about how to think about how the world works, and also about how to think about the thinking process itself. However, in order to understand strategy better, we explore the roots from where the field has emerged and evolved--the military. In our search for material, we came across the work of Gray (1996, 1999a, 1999b) that provided us with a considerable insight into the subject. In developing this section, we borrow from Gray's work, and are indebted to his research. We examine the militaristic perspective of strategy presented by Gray, and adapt it, to the extent possible, to the world of business and competitive dynamics. In this section, we examine the complexity, themes, and contexts of strategy.

The Complexity of Strategy