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Weekly UpdatesTake a look at your stock portfolio. What can you remember about the mission statements of any of the companies in which you have invested? How often have your decisions to do business with a company been influenced by its mission statement? Did the school's mission statement enter into your decision regarding your child's education? So why do you think it is important to broadcast your company's mission or vision in every piece of communication you send out? Is it on your website? Is it in your sales office? Is it in the showroom?
The mission statement might matter to you, and maybe to your people, but to the average customer or investor it is nothing more than a bunch of meaningless words. Yet mission statements have taken hold in the American business scene. Companies large and small have embraced this esoteric document as though their future depended on it.
The idea goes like this. Your mission guides what you as a company seek to do. This is your over-arching goal, so to speak. With the mission established, usually after much wordsmithing, the strategic planner would perform a good old SWOT analysis and devise a future course of action that will take the company to great heights. If the planner has been contaminated by an MBA education, he or she will most likely employ something like Porter's Five Forces Model (Porter, 1980) to determine how one might achieve a competitive advantage. At the end of the planning process, a sophisticated document usually referred to as the strategic plan will emerge. And more often than not, it will sit on a shelf somewhere gathering dust until the next planning cycle rekindles the urge to be rational.
So goes the logic of deliberate strategies. So goes the conventional wisdom of what contributes to success in business.
In his thought-provoking work, Pfeffer (1998) notes that companies have been looking for success in all the wrong places. One of these wrong places is in the pursuit of "a strategic fix to what are fundamentally operational problems" (p. 14). Indeed, success more often hinges on how well we do something than on how well we planned to do it.
What You Don't Expect Will Wipe You Out
Planning, after all, is based on assumptions about what might happen in the future. And the future, as we all know, is unpredictable. Consequently, academics have proposed, and strategic planners have embraced, the use of contingency models. What if the economy only grows by 2 percent instead of 4 percent? What if the price of oil goes up by another 5 percent? What if?. But the greater danger lies not in the uncertain, but in the unknown. The bow and arrow did not become obsolete as weapons of war because of a new and improved model, but due to the advent of the gun which was heretofore an unknown. Likewise, many other previously unknown (and unknowable) inventions have led to the demise of "the way things were." In marketing we call these "new to the world" products. No amount of sensitivity analysis can ever decipher the unknowable. And if they are unknown, how do we even know to ask what if?. As Mintzberg (1987) has suggested, formal planning often results in nothing more than an extrapolation of past strategies, or the copying of competitors' strategies. Not quite the stuff of innovation management.
Debunking the Myth of Formal Planning
Remember the popular novel Shogun? In an MBA strategic management class I took 20 years ago, my professor held it as an exemplar of formal planning. The shogun (a great general warrior-king in ancient Japan) planned every step to the nth degree, and was never surprised because he had a contingency plan to deal with all eventualities. I can still recall the professor saying how we should all read the book.
Case 1: The Battle of Midway Effective as it was in a work of fiction, such detailed formal planning became much less rewarding to another Japanese warrior. The hero of Pearl Harbor, Admiral Yamamoto, devised a detailed plan to attack and capture the island of Midway in 1942, as a way to secure victory for Japan in the Pacific theater in World War II. The action that ensued is known as the Battle of Midway. In a recent strategic analysis of that important battle (Chung and McLarney, 1999), researchers found that rigid planning doomed the Japanese fleet with its inflexibility. Much of what happened at the Battle of Mid way was unknowable to the Japanese naval planners, and consequently their elegantly programmed plan of attack was in shambles within minutes of the engagement. Yamamoto's counterpart, Admiral Nimitz, employed a much more participative kind of management. Other than to arrive at a commonly accepted goal with his field commanders (to inflict as much damage on the enemy as possible), Nimitz allowed his commanders to take action as they saw fit. Indeed, Nimitz was well known for not second-guessing his "managers." Despite overwhelming odds, the American fleet prevailed at the Battle of Midway, due in large part to Nimitz's style of leadership and to Yamamoto's trust in the formal planning process.
Case 2: Honda Motorcycles One might look at this example and marvel at how much Nimitz's management style resembles what is commonly seen as "Japanese Management." Indeed, especially with Pascale's (1984) discussion of Honda's launch of their motorcycles in the US market, the notion that "adaptive persistence" and fluid actions took hold. Indeed, Pascale's work dispelled earlier studies that attributed Honda's success to formal planning. I shall not go into details here except to say that according to Pascale, Honda's motorcycle launch was not a result of detailed planning. In fact, its actual course of action arose in spite of whatever planning that was conducted.
Mintzberg (1987) has suggested that an "emergent" view of strategies is fruitful. In both the example of Midway and Honda depicted above, we can see how actual strategies emerged out of actions, rather than a result of pre-programmed plans. The idea of emergent strategies takes into account that actual (or realized) strategies result not only from the plans made by senior management, but also by actions taken at the grass roots level.
Case 3: Sparrows & Associates To illustrate this perspective of strategy in an entrepreneurial setting, I shall summarize a recent ethnographic study performed on an advertising agency in southern Ontario. Interested readers are encouraged to contact the author for more details about the study.
Sparrows & Associates is an advertising agency operating in a major city in southern Ontario. Six more or less full time people make up Sparrows & Associates: except for the president, everyone else is paid by the hour, though the workload is such that people often work more than a forty-hour week. Most of the agency's clients are real estate developers. Sparrows has had to weather one of the most severe recessions in memory. Its reliance on the housing industry made the company's first years of operations that much more tenuous. Sparrows has attempted to diversify into other areas, and counts among its clients a manufacturing company, some high-tech firms, and a trust company. The bulk of its revenues, however, is still derived from the real estate sector. Sparrows services about 25 clients, and between eight to ten of these are active at any one time. The company is also branching out into a totally unrelated diversification--direct marketing of gourmet jams. The last few years have been particularly busy, and the people at Sparrows have had to work nights and weekends just to meet client demands. Including George (the CEO), Sparrows comprises six people (four women and two men). Because of the precarious nature of a new start-up business, the other people joined Sparrows on a freelance basis. However, business has grown to the point where they all basically work full time at Sparrows. Fifty-hour work weeks are not uncommon.
Sparrows is a youthful organization. Except for George (himself only 41), everyone was either in his or her twenties or thirties. And although they all have substantive experience in advertising/ communications, none of them (except George) has held senior positions at similar firms. Energy level is high. George, for instance, sleeps an average of maybe five hours a day. Stress is also high. Because they are in a service environment with tight deadlines and ephemeral client fancies, and because they do not have much in the way of infrastructure and backup, tension sometimes runs high. In George's words, they get "zooed" a lot. Sparrows people express a general inclination to learn and do new things. In interviews, they indicate that constantly learning and improving their knowledge is a major attraction that Sparrows offers. George appears to be aware of this desire to learn, and comments that he encourages his staff to take courses by agreeing to subsidize the tuition. In addition, the small size of the company requires that employees "wear many hats," as several informants put it.
Other than George, who is officially "top management," there is no hierarchical organization to speak of. Although Sparrows ostensibly is organized along departmental lines (eg. studio/design, account services, production and accounting), the size of the company is such that the lines are fuzzy and functions overlap. People chip in whenever necessary. During site visits, for instance, incoming telephone calls were answered by whoever happened to be available. Courier pickups were handled by whoever was around. Client Service people helped with design. And so on. Sometimes freelancers are called in to handle specialized activities or to help reduce the workload. But because these freelancers only come infrequently, they do not form the "core" group that makes up Sparrows & Associates.
The Symbolism of Leadership: Or, "Georgeism."
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