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June 27, 2008
Do As I Do, Not As I Say
The McKinsey gang's ongoing interest in behavioral economics leads from time to time to email alerts about articles that lead off like this:
Hidden flaws in strategy
"Why do top managers, steeped in theories of good business strategy, still make bad decisions? While ignorance and hubris sometimes play a role, the brain itself—how we think—is also a culprit. Insights from behavioral economics help explain why we don't always think rationally and how our logical flaws can lead to bad strategic decisions."
On a day like today, when the stock market dropped over 300 points, the catchiness of that intro is in the contrast between the confidence we want to have in logic and the confidence we want to have in our ability to use it.
Getting strict, we might have to say that when strategy is based on logic, strategy is interpretive -- because in different hands, the same logic might lead to different strategy and/or different strategic outcomes.
But why doesn't it make just as much sense to place the first faith in the strategy and then find the logic to execute it? Well, it does; it's just that in this mode, the "strategy" is not a performance; instead it is a proposition that supplies the point of view to be used when managing functions.
McKinsey's discussion seems to be poised to warn us away from the problem of management personalities corrupting objectivity, and further, poised to argue that this should be the right warning because we can assume that there is usually going to be sufficient objectivity to correctly navigate to the correct destination. That is, the most prominent assumption that we can read into the McKinsey caution is that it's not cool to split from the plan. Logic shall bear decisions and decisions shall bear the plan and the plan shall be righteous.
But isn't that still letting the bad boys off the hook? Levity aside, coaches bring the game plan to the players knowing this: that the players actually have to play, which means that the players will improvise their way to the opportunity to comply, if they understand the strategy -- "strategy" which is again essentially a point of view and not a performance prescription.
Strategy is about belief in the value of your position. It is esentially about where you're going to be, and why you're going to be there. Because of that, any position within a hierarchy of operational dependencies can be a strategic position. In effect, a position represents the opportunity, so the most direct way for a leader or manager to damage the potential of a strategy is to make decisions that inhibit or prohibit the players' opportunity to align and coordinate their compliance to the strategy.
Because of that, we want a model of coaching to rely on, not just retraining (or re-straining) of senior staffers to the logic-decision-plan mode. We want an observation-design-motivation mode just as much if not more. We want the sideline clipboard.
Posted by Malcolm Ryder at June 27, 2008 11:21 PM