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Two types of strategy Part Two: Apex Statements

March 18, 2017 - 18:36 -- Admin

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”

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.4

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 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).

Sad6

  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.