Two types of strategy Part Two: Apex Statements are eating our brains

We need leaders who get up and out, are close to global megatrends and consumer behaviour, and understand leading indicators for changes to how people will work and live.

A self described “leadership consultant”

Continued from Part One.

Starting sometime – I’m thinking late in the 1980s – organisations started changing their weekend team-building retreats – where everyone went canoeing and abseiling – to strategy retreats. At strategy retreats the idea is that everyone empties their minds and the group starts with clean sheets of paper. Often a retreat begins and ends with attention to metaphysical questions like “What is our mission?”. Another fave was “Where to we want to be in ten years time?”. The very question blasted away all those cobwebs of short term thinking and you could Think Big. Megatrends were discussed. I’d love to know the history of this transformation from abseiling to Big Thinking as it seems a massive cultural shift in many, many ways.

One story that stuck out for me, and that was often told as some kind of illustration of the importance of the apex questions being posed was the company that made carpets and eventually realised, though this astringent process of navel gazing, starting with a clean sheet of paper, thinking long-term, gettingout of the weeds, looking to the heavens for deeper insight, that it was in fact supplying its customers floor covering needs. Don’t laugh – this actually had a point. The upshot was that the firm reconfigured its offering as a flooring services solutions company. Still sounds like a joke I know, but that’s because it’s become a cliché. This was a genuine and valuable corporate reinvention. They made a lot more money and, by taking responsibility for the end of life of its products improved both economic and environmental efficiency. But I suspect this was real strategy – brought about by some smart people, perhaps some strategy people and if not some research capacity and testing before the strategy was ‘rolled out’ as we say.1

In any event, by the naughties this approach had become pretty much a business monoculture. Virtually all organisations in the private, public and, following not long after, the not-for-profit sector, had ‘mission statements’. 2 As you know the ‘mission’ of the organisation would be summarised in some short pithy catchphrase. This could be a little embarrassing because what they did was run a particular organisation – say a newsagency, or a TV station or a government department, but that wasn’t the answer to the question “what do we do?” or “what is our mission?”. They were after an answer that might do a number of things.

The same article I’ve just cited outlines the many functions of “mission statements”.

  • To communicate a sense of the direction and purpose of the organization.
  • To serve as a control mechanism for keeping the firm “on track.”
  • To aid in making day-to-day decisions.
  • To inspire and motivate employees.
  • Mission Statements as a Communication Tool

The fact that there are so many purposes for mission statements gives the game away. Because several of these uses are, at the very least, in some tension with one another. So the mission statement is a kind of apotheosis of confused thinking. The dramaturgy of its production comes with all sorts of bromides about how we’re rising above the mundane. It all seems so … well commonsensical. Why don’t we give ourselves more time to focus on these Big Strategic Things – a common lament of boards and senior managers about board meetings?3 But nothing is as it seems.

For instance “Where do we want to be in ten years time?” is a plausible conversation starter. But it’s marketed as so much more.4It’s almost invariably sold to the group who’ve been working on their blank-mindedness on the first session or morning of the retreat as the necessary beginning of the journey.How can you plan to go somewhere if you don’t know where you’re going? But if we were going to take this apex goal setting seriously, this is a very serious step – the foundation of all our strategic thinking. Get that wrong and you’ll be on the wrong tram – rather literally.5  There’d be a lot of work gone in before everyone turned up. People known for their thoughtfulness would have debated aspects of it – fleshed out the possible options (including the possibility that asking such a question is quite possibly a poor, and uninformed way to begin the strategic discussion).

There might be some reference to the need to revise this starting point and start again if one were to take the possibility of human fallibility seriously. There might be some reference to crafting a goal with some reference to what is and what is not within the organisation’s control. But wait – if you did that you wouldn’t be starting with the goal would you? That suggests the organisations’ means and ends are dialectically, rather than mechanically related to each other. Anyway … no matter. I’m just trying to give some flavour of what the slightest bit of critical thinking might turn up here. Suffice it to say that it’s a misunderstanding to expect any of this.

Again, the game is usually given away – in this case by how poorly such conversations are prepared, how little intellectual leadership is shown in them. And by the end of the morning one has some lame objective “We want to be the leading newsagent, in – take your pick – our suburb, the state, the country, the world.” Why was that objective chosen? No real reason. Because it sounded good in the group. The person who said “we want to continually make entrepreneurial (risk-taking) decisions systematically and with the greatest knowledge of their futurity; organizing systematically the efforts needed to carry out these decisions; and measuring the results of these decisions against the expectations through organized, systematic feedback” just seemed to be going on and on – even though he turned out to be Peter Drucker.

If we want to use the mission statement as a strictly motivational/communications device, well and good. The problem is though, that it won’t have the desired effect of getting ‘buy-in’ from employees and other stakeholders if it’s transparently a piece of fluff. So there needs to be some process whereby the statement can be given some essentially bogus gravitas – like the retreat in which we pretend it’s all part of everyone’s planning the culture, the mission and the future of the organisation when it’s more like an advertising slogan – signifying nothing other than whatever little psychological hijinks it’s up to.

Here’s one authority that turned up in a Google search.

Google’s mission, for example, is “to organize the world’s information and make it universally accessible and useful.” Google pursued this mission in its early days by developing a very popular Internet search engine. The firm continues to serve its mission through various strategic actions, including offering its Internet browser Google Chrome to the online community, providing free e-mail via its Gmail service, and making books available online for browsing.

Hang on a minute. This gets things completely arse about. I think it is possible that Google’s book project came from such aspirations to organise the world’s information (whether or not formalising this in ‘mission statement’ achieved anything). But Chrome and gmail? How does Google building its own open source browser to compete with Firefox or gmail to compete with hotmail and its epigones help with the mission? It doesn’t, except in so far that one could use the mission to justify building pretty much any IT asset and making it publicly available. So here’s a strong proponent of mission statements who proceeds to demonstrate his anti-thinking in full view.

Here’s another comment about the strategic significance of the mission statement:

[T]he mission statement is a crucially important part of strategic goal setting. It is the superordinate goal that stands the test of time and assists senior managers and indeed workers in navigating through periods of turbulence and change. It is described as “the stake in the ground that provides the anchor for strategic planning”.

Hang on, hang on. So an organisation is going through a “period of turbulence and change” and while its “senior managers” are seeking to figure out how to navigate it, they keep coming back to the mission statement that was constructed in a different time, and also in an environment in which it was assumed that an organisation has a singular mission expressible in a single, summary statement? And why exactly is this a sensible way to go about strategic thinking? To come back to the Google example above, there may have been a time when Google could (and so perhaps should) have expressed a singular overarching ‘mission’ as organising the world’s information” but that time has long gone. Google is a set of resources and competencies sitting in a whole range of markets. For instance relatively early in its life, it realised that it had developed resources in delivering the best search engine that gave it technical advantages over its competitors when it came to scaling servers. That meant it could make disruptive forays into web based email and other cloud served markets. It went aggressively after online email not because it related particularly directly to its ‘mission’ as expressed in its mission statement, but because, all things considered it was a strategic fit. Ditto all its big strategic decisions – like buying and developing Android (because Apple looked like it might run away with a critical market for delivering ads).

Sad. 6

  1. I’ve now checked out this story and I’ve got the moral right, but the facts completely wrong. Turns out that a nasty run-in with accounting standards rendered the whole exercise a waste – of time and no doubt a lot of money. But at least the documented case study suggests that none of this came from a corporate retreat in search of mission and vision statements. It seems to have came from the CEO’s inclinations, his reading of business environmentalism, presumably pursued by the firm’s strategy and other senior executives.
  2. “A study by Boston-based Bain & Company and the Planning Forum (Krohe 1995) found that nine of every ten of the 500 firms surveyed had used a mission statement sometime in the previous five years”, Barbara Bartkus, Myron Glassman, and R. Bruce McAfee, 1997, Mission Statements: Are They Smoke and Mirrors?, Business Horizons, November-December 2000. 23-8 at p. 23.
  3. I recall reading this as a common response of directors recently, though I can’t source it.
  4. I’m aware of the irony of quoting McKinsey’s in all this but as they observe:

    Many strategic-planning processes are far more focused on setting goals (with no tangible lever that management can control) rather than crafting choices and moves to meet those goals (levers firmly in the control of management).

  5. Well metaphorically actually, but you get my meaning.
  6. To quote President Trump.
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18 Responses to Two types of strategy Part Two: Apex Statements are eating our brains

  1. Pingback: Two types of strategy: Part One | Club Troppo

  2. Ken Parish says:

    I can’t help wondering whether it’s worth spending even this modest amount of time musing about the patently idiotic. I have a tripartite strategy for surviving workplace discussions about mission statements and similar topics:

    (1) Test how long I can get away with taking the piss out of the concept (eg by suggesting we take Startrek as the inspiration for our corporate mission: “to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before”) before getting stern looks;

    (2) Play on Twitter on my mobile phone until completely bored;

    (3) Text someone to ring me and say I have an urgent court appointment.

    It works well for me anyway.

  3. Nicholas Gruen says:

    Yes, agreed. This is the second and last part of an essay on strategy which is mostly cleaning cobwebs out of the way. I’ve got a more substantial post in the wings which I hope you won’t find as basic. But I quite like having these things documented so I can pepper posts, emails and other forms of communication with references to stuff that’s already set down. After all I encounter the linear instinct – presented as the simplest commonsense constantly – here’s one example and here’s another, complete with nice, linear diagram. 

  4. JJ says:

    I’m interested in the function this nonsense serves. A few rambling thoughts …

    No doubt a lot of it is simply the done thing.

    I do wonder though about the benefits the executives get from it. Partly I suspect it provides a set of rhetoric expected from the organisation’s leadership in the modern world (and also provides a ‘filler’, thereby avoiding in engaging in real and difficult discussions on issues that matter). Futhermore, the execs get to control this conversation.

    It also provides cover when things go wrong.

    From a staff point of view, at least you can quickly identify a potentially good exec who doesn’t spout such nonsense quite as much – might be worth looking for a job in their area.

  5. paul frijters says:

    yeah, I have wondered about the functionality of this stuff too. Clearly it has its uses as a smokescreen and a control device, but you also see organisations that are relatively new and with self-made execs doing this, and they don’t need it for either smokescreen or control uses.
    There is partially the issue of the formation of group social norms in order to seem like a reciprocal group.

    There is also the issue of religion though: these mission statements and their related mutterings are awfully similar to religious missions, complete with incantations and prayers. Scratch under the surface of religious mutterings and you could make all the points above again.

    The bottom line? Nick, you’re a heretic :-)

  6. John Scott says:

    Sir Douglas Hague CBE, Joint Course Leader, Oxford Strategic Leadership Programme, 1994, said:

    “Leadership is about having a ‘grand strategy’. This matters more than ever now, in times of turbulent social, political and economic change. Too few people today practice original ‘grand strategy’. Rather they indulge in imitative competitiveness. That is the highest form of risk for it virtually guarantees that the chance of failure is maximised, not minimised.”

    His comments remain highly pertinent, particularly as we see more clearly the obsolescence of mainstream economics in the face of an economy now dominated by services. Services are based on value and wealth creation through mutuality. Economics needs a new concept and measurement tool and a means to achieve sector-wide productivity gains.

    To go boldly where no one has gone before the Federal Government might usefully think about an original grand strategy to achieve a revolution in the quality of collaboration in the health sector. The current imitative digital strategy has demonstrated its failure.

  7. John R Walker says:

    Am told that one of the reasons for the Google book project is to develop a massive data base of expressions , phrases etc in most of the worlds languages, for use in really powerful translation software.

  8. John Scott says:

    Nicholas, I would like to clarify that I was not having a go at your comments regarding the word and concept of ‘strategy’.

    We don’t have a way of expressing really big ideas, particularly big ideas that require a ‘whole of industry’ perspective and an organic evolution.

    We need a new conversation and an openness to new knowledge and new tools to address what I now understand you call: “An ecology of public and private goods and how they matter in economic and social development, and what public goods we must have in the digital age”.

    My colleagues and I have been working for two decades addressing the challenge of productivity of knowledge and service work (we do have a solution) and the need for new ‘public goods’ that enable service sectors, such as the knowledge intensive health sector, to function in a much more sustainable and adaptable fashion. Adaptive efficiency is a new imperative. (As a matter of public record, I led for five years the COAG Health Minister’s ‘e-health’ initiative entitled: Moving Information to Care’.)

    In modern health systems the benefits of the digital revolution have not been realized. This is in part because people in their communities of discourse have not been placed at the centre. Clinical leadership and empowerment is required for reform and the embrace of digital pathways requires a purposeful form of connection with the electronic sphere to ensure that the normative aspects of healthcare are upheld.

    What has impeded progress in the health sector over the past two decades has been the over-reliance by government on neo-classical economics with its production orientation and ‘average concept’ of measurement. The Commonwealth Health Department is on record in 2014 calling for a new concept for productivity and method of measurement.

    As I now realize, the comments in your presentation about Public Goods for the 21st Century, align with ours.

    Please accept my apology if my comments gave offence.

    John

  9. Nicholas Gruen says:

    Thanks John,

    I’m not sure where you got the idea that I was or might have been offended. Far from it.

    But I’m not sure you’ve characterised the problem correctly. I think most people could agree that there is – pretty obviously – a huge prize to be had from the health sector’s embracing IT better than it has.

    In what sense is this for want of the appropriate ‘vision’? From Wikipedia, this is the vision of the National e-Health Transition Authority.

    NEHTA is the leading organisation in supporting the national vision for eHealth in Australia, working openly, constructively and collaboratively with consumers, providers, funders, policy makers and the broader healthcare industry to enable safer, higher quality, accessible, equitable, efficient and sustainable healthcare. To enhance healthcare by enabling access to the right information, for the right person, at the right time and right place.

    It’s admittedly a mouthful, but the basic idea is OK – in its prolix way it manages to capture many of the upsides. I could write quite a lot about how the vision should be different – I think I could sketch out a far more powerful one – which I think would related to bolder articulation of what is public and what is private. But I doubt if having my vision would have made much difference. (Actually I doubt it very much. I expect a better articulated vision properly understood and bought into by all the players would have had some salutary effect, but most players wouldn’t really have understood the differences between my formulation and NEHTA’s boilerplate, and if they did, they wouldn’t have felt it in their bones – so it’s hard to see what difference it would have made.)

    But at least as far as I understand it, the main problem wasn’t a failure to understand that there were large benefits in getting e-health right. It was the multiplicity of interests, the fragmentation of existing IT effort making integration not just technically very difficult, but orders of magnitude harder again given the number of governance, political, ethical problems that need to be solved. All this in a political environment which has pretty much given up providing cover for good, detailed work. Better to just bring a lump of coal into the chamber to make your points (and remember to wear the right coloured ribbons).

    As for ‘neo-classical’ economists, it’s easy to call for a paradigm shift. There’s a lot wrong with neo-classical economics, but then it’s just a framework: A starting point. It’s not my favourite starting point, but then it’s a perfectly good intellectual framework for understanding the immense value from seizing the free rider opportunity that the non-rivalrousness of digital artefacts gives us. Thomas Jefferson’s way of expressing the free rider opportunity is more exciting and uplifting, but it’s essentially the same idea.

    I’d say we should be using the tools we have to get on with the task and suspect calls for more ‘vision’ to be what I call strategisation.

    Your thoughts?

  10. John Walker says:

    Nicholas
    Curious , how does somebody become a leadership consultant? Is it a degree course or what?

  11. Nicholas Gruen says:

    Leadership is taught in Davos – in the off season – on ski-lifts.

    Going up.

    You go down with the beautiful people.

    They lead … you follow.

    There are videos about Martin Luther King Jnr, Mahatma Ghandi, Albert Einstein and Richard Branson. Tony Blair gives a talk about the agonies of being outside the Catholic congregation until he’d been bundled out of the Prime Ministership. Former inductees have said that Mr Blair literally “burns” with sincerity – no change there.

    And … by a process no-one has ever been able to fully put into words … you are inducted into the ways of humility.

    • John Walker says:

      :-) a Kid Creole and the Coconuts song springs to mind:

      Gina, Gina,
      he’s just a ski instructor

      What can he do for you
      That we couldn’t do
      He’ll spend his whole life through
      snowballing you

      Gina, Gina,
      he’s just a ski instructor
      Gina, Gina
      he’s just a ski instructor

      What do you do
      when all the snow starts to melt
      there’s been no action here since William Tell
      (blow saxophone)
      it’s all about gina

      what will you say to him
      when you’d rather sleep
      you think saliva gatz is all that you need

      He’ll take you up a slope
      and down one too
      showing off his value
      Wiener Schnitzel and?????
      Is all he will allow you
      Isn’t that annoying, isn’t that boring

  12. John Scott says:

    Nicholas,

    I agree that there are tremendous gains to be obtained from health embracing IT better than it has.

    The description of NEHTA is admirable in what it aspired to. Unfortunately, it didn’t walk the talk on virtually every aspect.

    You are right to say that there are a multiplicity of interests. However, there is a narrow set of mutual interests provided you have a compelling narrative that is understandable by all parties and a mechanism to turn improvements desired by the health sector into delivered services; services which embrace digital pathways and adhere to norms developed by the health sector for the health sector.

    You need a Trusted, Independent Collaboration Mechanism in order to enable
    all the interests to be REFLECTED (not Represented) at the decision table. You need a higher level of trust than is present today.

    While I have an interest in a new paradigm for the workhorse of modern economics, I am comfortable with your thought that neoclassical economics can be used to help demonstrate the immense value from seizing the free rider opportunity that the non-rivalrousness of digital artefacts in the digital age offers.

    We can contribute to that opportunity.

  13. Pingback: Against Strategy | Club Troppo

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