What was the most common business strategizing practice in Finland, in the 90’s? Perhaps to rent a wood cabin from Lapland for the executive board and coming back with a plan that was then kept safe from the inquisitive employees.
At first sight, it might even feel right: the executive team’s trip could increase togetherness and enable them to concentrate on strategy work. However, what kind of strategy this method has led to? Is strategy a plan? Or a road map produced by the top management?
I prefer to perceive strategy as the actions taken by the whole organization on the chosen road. By so doing, I acknowledge the ideas behind strategy-as-practice perspective, first introduced by Richard Whittington. The key message of this approach is that strategy is doing: it’s constant meaning-making with the people in the organization and agile adaptation to changing environment, in order to maintain the optimal balance in creating value for the business owners and the customers (Earner, 2014).
The great balancing act
The balancing between maximizing own profits and serving clients’ needs is indeed one of the most fundamental balancing acts that the strategists encounter. Jack E. Earner’s “My little book of strategy” introduces an intriguing idea that strategy is all about constant balancing between different, mutually exclusive alternatives. For example, the strategists either commit themselves to turn the business upside-down with a quick transformation or take time to develop incremental changes. They either focus more efforts on exploration – investing time and money on future – of they settle with exploitation, capitalizing on past investments. The need of innovativeness related to strategy work also requires the strategists to balance between autonomy and coordination: how much disorder or chaos can they live with to achieve innovative ideas?
Leading the way to efficient strategy work
According to Earner, strategy is about “setting the direction to meet the challenges of the market”. Thus, to set the strategic goals, you have to know your customers’ complex needs well enough, something that requires in-depth relations management, continuous data analysis and transparency in communication. The strategy-as-practice approach is especially interested on how the goals are to be determined and on what kind of actions they lead to.
There are numerous frameworks, tools and techniques to help with strategic decision-making and goal-setting but they are no use, if the strategists don’t have relevant data on the performance of the company and vision on the future of the market. In the digitalized world that we live in, nearly everything is measurable and the needed data is available. However, the most of the potential of digital data is heavily under-utilized – it will be fascinating to follow how companies will adapt their strategy practices to make better use of the big data.
The Palmu consultancy has introduced a concept used in their service design but quite seldom in harsh business world – empathy. Even though one could imagine their approach as just another marketing tactic, I think they have a good point to make: you have to understand your customer. Using the word empathy, the Palmu consultancy wants to emphasize that in strategy work there are no universal truths or theoretical frameworks that can be applied in any organization’s strategy work. Instead, the challenges and problems of companies often consist of a whole lot of ambiguity and complexity. Being emphatic, to really listen and to set in another person’s shoes, is a crucial means to validate your assumptions and at the same time, it creates firm ground for cooperation, a crucial element of successful strategy work.
All three elements of communication are equally needed in strategy work: top-down, bottom-up and collective sense-making. My experience is that there are certain things that just need to be informed by the top management – the employees don’t expect to be involved in everything. However, top-down communication shouldn’t dominate the overall communicative landscape of a company. Instead, I think it should be limited to areas where top management can’t expect the employees to have knowledge and ability to influence the decisions. Thus, as Earner suggests, the strategists should develop routines, practices, spaces and material artefacts to break down boundaries restricting participation. However, this doesn’t happen without mutual trust between the management and the employees – so how to build it?
Referring to the ideas presented by Rouleau and Balogun, I would argue that middle managers have a crucial role in strategy work through discursive activities in everyday work practices. It is the everyday life where the organizational actors communicate with each other, form relationships and build ground for strategic actions. If they succeed in building mutual trust in their daily communication, it is more likely that there is ground for common understanding of strategic goals and actions.
As the middle managers often have the closest relationship with the operative employees, they also tend to have the discursive competence needed in persuading them, as Rouleau & Balogun point out. The way the middle managers talk to their subordinates and the way they listen to them, seem to have a crucial effect on the people’s attitudes towards strategy and to their willingness to participate in strategy work. It is the communication, thus, that determines how the strategy will look like and if it materializes as desired actions.
The crucial role of middle managers is something that I’ve learned during my few working years in HR department. Thus, I believe, it is important to build routines and practices to increase constant collaboration between hierarchical layers of organization.
The journey towards strategy professionalism
I definitely believe in Jack E. Earner’s phrase:
“Effective leaders are able to both reflect and make things happen”.
Back in the old days, it may have been enough to be able to give orders but, today, that kind of leadership doesn’t work. The most effective leaders ask and listen to their organization and trust in their decision-making capabilities but at the same time they have the drive to get their own hands dirty, to speed-up and make things happen. This is what Earner calls internal balancing act of a strategist.
Internal balancing act
Earner mentions three success factors of an effective strategist. These are the kinds of things that I believe I should focus on developing, no matter in what kind of position I will work in the future. First, Earner emphasizes the importance of knowing yourself. For me, this is a good starting point, as I found myself quite self-reflective in terms of what I do, how I collaborate and why I behave in a certain way. Due to my HR background I’ve also learned to analyse my own ways of working – as well as others’ – using some tools, which have helped me to recognize some features to be developed.
One of these features is linked to the second factor needed from a strategist: Earner offers pluralist mind-set as a means to cope with uncertainty related to strategy, as endless stream of balancing acts. Nowadays I understand strategy as something that doesn’t require the right answers but, instead, something that should be perceived as a trial-error process, “muddling-through”. This is something that the perfectionists, like I’ve used to consider myself, have difficulty to deal with but I’m glad I have already started to learn to make errors and accept that they are important part of getting things done.
Last, Earner brings up an ethical perspective needed from the strategists: integrity. Earner proposes that the strategists should aim at “building organizations around doing good things”. I think this is what strategizing should be in 2016 and onwards: integrity should be in the work practices and in everyday activities. One thing I personally can do here, is to be trustworthy myself.
As it’s clear now that I, as an enlightened corporate communication professional, wouldn’t take the executive team to a wood cabin in Lapland, what kind of practices would I then favour in strategy work?
If I would have to pick three main points that the contemporary strategists should focus at, I would choose the following:
- practices increasing involvement of different stakeholders, particularly customers and employees
- routines and technologies enhancing data-analysis to make informed decisions
- breaking boundaries to enable communication flow in all directions.
I believe that these aims in strategy work would lead to increased agility needed in the fast-changing, unpredictable environment where strategies are being done today.
Earner, Jack E. (2014) My Little Book of Strategy. Helsinki: Talentum & Aalto EE
Palmu 2016. The verbal and the written materials provided during the Strategic Change –course. Aalto University.
Rouleau, L. & Balogun, J., 2011. Middle Managers, Strategic Sensemaking, and Discursive Competence. Journal of Management Studies, 48(5), 953–983.
Tienari & Vaara 2016. The verbal and written materials provided during the Strategic Change –course. Aalto University.