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. 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.]

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. “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.] 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. I recall reading this as a common response of directors recently, though I can’t source it.] 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.[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).]It’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. Well metaphorically actually, but you get my meaning.]  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. To quote President Trump.]

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[…] But Troppo would not be Troppo if it didn’t leave its readers, literally gasping for air wondering how things would turn out in the next bodice ripping installment. […]

Ken Parish
Admin
Ken Parish(@ken-parish)
4 years ago

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.

JJ
JJ
4 years ago

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.

paul frijters
paul frijters
4 years ago

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 :-)

John R Walker
John R Walker
4 years ago
Reply to  paul frijters

Actually mission statements have also crept into church groups, often with fairly poor results – so much ” activity ” that ” we went broke “.

John Walker
John Walker
4 years ago
Reply to  paul frijters

Paul
My guess is that something similar to ‘sexual selection pressure’ is probably what’s going on.

John Scott
John Scott
4 years ago

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.

John R Walker
John R Walker
4 years ago

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.

John Scott
John Scott
4 years ago

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

John Walker
John Walker
4 years ago

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

John Walker
John Walker
4 years ago
Reply to  Nicholas Gruen

:-) 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

John Walker
John Walker
4 years ago
Reply to  John Walker
John Scott
John Scott
4 years ago

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.

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[…] that are either carefully expressed to be vague, ambiguous and/or all things to all people (AKA mission, vision and other theological statements) or which run the risk of being foolish on their face once thought about by those unlucky enough […]