Chapter 9

Some Final Thoughts on Practice and Improvisation

Form a conceptual point of view, developing a strategy for your firm is really pretty straightforward. Constantinos Markides¹ argues that a strategic position can be summed up as the responses to three simple questions:

• Who are my customers—and who are not?
• What will I offer customers—and what will I not offer?
• How should I do this in the most efficient way?

You’ll recall that these are basically the same as the founding questions in chapter 7, which dealt with choosing or formulating a strategy for your firm. The questions are simple but turn out to be quite difficult to answer clearly, especially if you have no way to attack them. Developing good analytic techniques is a powerful position from which to answer, at least in part, those questions.

However, in working with students and executives (particularly the latter, who have often been tasked with the job), I hear strategic analysis and planning criticized because they say it is difficult and because even when pursued, it doesn’t work. Yet, I hope you see that analysis and planning is important because it can do the following:

• Guide your significant—that is, strategic—investments and commitments
• Provide a platform for contribution by others, which makes more hands for crafting and influencing the strategy
• Bind the members of the organization together and provide a common basis for action

The general purpose of this book is to specifically address the first criticism and to point to a way to deal with the second. In general, I agree that the analysis process can be frustrating and confusing when the tools are unfamiliar. Yet, in these past chapters, you’ve worked through a large set of well-known and proven techniques and seen how and why they are applied. Your work with the very general environmental assessment model (PEST), industry analysis (five forces) and firm level techniques applicable to your own organization and competitors (VRIN) should resolve one aspect of unfamiliarity: understanding which tools to use and when to apply them.

There is little doubt, however, that the first time you work through an entire analysis cycle, this will be difficult to do. First, you will need to find the right information or, if and when it doesn’t exist in an easily accessible form, develop synthesis and workarounds. Synthesis comes from combining and analyzing data sources to create a new source, which can be exceedingly valuable. Even so, you may have to deal with less than complete data, at least for the time being. That is not what you want, but you can move forward if you note it and think about what variances in what you initially estimate might do to your work—and remember to keep pursuing the right data.

Another issue is that you will likely find your definitions and boundaries changing over the course of the work. You might not know it is happening, but it can show up when a conclusion you reach at one stage contradicts an earlier conclusion. This is actually quite a useful discovery: You’ve either erred in one or the other conclusions or you’ve changed the basis for analysis, which permits contradictions to exist. Both are fixable if you pay attention to them.

Both of these factors lead to an important third reason that analysis is difficult: Practitioners usually don’t do it often enough to gain proficiency and this can lead to frustration. An illustration: I play golf, in a sense. I own the right tools (clubs, shoes, bag), I understand what I’m trying to do (get the ball in the cup), and several times a year I’ll walk a course with my tools and my understanding. You can likely imagine the results because you see the fundamental problem: Doing well at golf or anything complex requires practice and application and I’m not doing that. The same is true of strategic analysis. Subsequent passes through the process will be faster, easier, and more effective because you don’t have to create sources—you review and revise. Certainly, you will need to revisit your assumptions and your conclusions to roll in new information and eliminate the obsolete and attend to changes in industry boundaries and competitors. But, in many ways the first time through makes the second and third and so on far easier. Persistence and consistency are critical to the reliability of your work.

The second primary criticism—that doing strategic analysis is not useful since it doesn’t work—is more difficult to address because I think there are several reasons why people adopt this perspective.

First, it has been a distressingly common practice to deintegrate the planning (or analysis and formulation) stage and the execution stages of strategy.² The planning process, often undertaken by senior executives, generates a document that is then turned over to lower level executives to turn into results. Obviously, this destroys the context of the analytic conclusion for those implementing managers: They see what to do but not why. Moreover, the day to day demands of business and the manager’s functional responsibilities often get in the way of recreating the reasoning that led to the plan. If these managers run into situations that are not identical to those envisioned in the plan, the prescribed actions become pointless or futile—and managers see this. The strategy is a waste of their time and scarce resources that, they reason, could be better used elsewhere, so the implementation was cursory.

The second and even greater contributing cause of perceived irrelevance is that strategy and strategic analysis is often approached as something that ought to be done but as infrequently as possible. This arises because strategy is often regarded as the purview of the CEO and, to some extent, the senior management team. Thus, strategy is often regarded as “not my job” and as an imposition because of it. I suspect the origin of this is the common approach that renders strategy-making an episodic—if not spasmodic—effort. This approach also invokes the problem of unfamiliarity discussed previously. That’s why the idea of strategic analysis, implementation, and assessment is much more effectively approached as a cyclical, ongoing process (Figure 9.1)—a process that persists and becomes part of the fabric of the firm. This has several advantages.

First, keeping up to date with the analytics and the assessment requires that the job be broadly shared. The crafting of decisions about what to do and why can get distributed to many more managers and staff. The cognitive sharing takes the burden off the previously few involved. Second, continuous strategy can eliminate the problem of the disjunction between formulation and implementation. Now, staff at many levels understands how and why the strategy is what it is, what events might mean for that strategy, and what to do about it. Henry Mintzberg observes that by creating the right systems to encourage and stimulate participation, you get engagement in strategy.³ This may not solve the problem of “right strategy” in the sense that broad engagement automatically makes everything work to plan, but it can improve the probability of acceptable outcomes and thus improve the quality of the feedback for subsequent efforts.

Another way of thinking about the level of intellectual investment needed is through a metaphor for what happens in the give and take of ideas and information in the analytic process. Sometimes, especially early on in the learning process, students get frustrated because they feel they can’t go “outside the box,” and I tell them they are correct—because they aren’t ready. To illustrate this, I show them a video of Gabriela Montero and her approach to Mozart’s 20^th Piano Concerto⁴ because, even more than sports, jazz and improvisation have become popular metaphors for what happens (or should happen) with strategy.⁵ Jazz works because it is adaptive and creative yet founded in disciplined pursuit of mastery. Improvisation requires individual skills yet is fundamentally a group effort, emphasizing attentive listening and “self-reflectivity”⁶ or the ability to avoid self-indulgent and destructive dissonance.

Researchers who use this metaphor tend to focus on the listening, openness, and communication elements because they translate directly to how people might more effectively relate to each other. They are certainly important but for our purposes, the metaphor is even more powerful because of what is required to get to that improvisational point. Before a musician can improvise effectively, he must first master an instrument well enough that when performing he is not thinking about the technical elements of playing it but rather letting the music play through. Further, a musician needs to understand the musical genre, its grammar and vocabulary, and its influential interpreters and their approaches. Jazz pieces, for instance, have a language or structure (and maybe several dialects) that usually includes an introduction of a theme, exposition of the theme or main melody, recapitulation, and coda or tag. ⁷ Even then, what masters do within the structure teaches as well: Marc Sabatella cites Clark Terry, a well-known trumpet and flugelhorn player, who described this part of the process as “imitate, assimilate, innovate.” You can’t improvise easily unless and until you’ve paid your (learning) dues. Finally, the musician needs to understand the song itself and how to fit into it. In short, the ability to improvise requires a substantial investment in basic skills before the more social issues of communication, reflexivity, and the like come into play. Thinking outside the box requires first that you know the interior of the box very, very well—or what results is just noise!

Jazz is a good metaphor here because it captures the sense of dynamics and responsiveness that a well-functioning strategic process embodies. I sincerely believe that the skills you have learned here are equivalent to the technical skills musicians develop, that the language and grammar of your industry can be mastered, and that with them you can not only be comfortable and competent in analysis when your environment is stable but also be ready to improvise when needed. Practice, persistence, and process take your work beyond a mere exercise—it becomes a powerful way of interpreting and interacting with your world.