Sunday, November 27, 2011

Internal evaluation and facing the truth

Some of the earlier topics from class I keep coming back to as we add evaluative frameworks are those expounded by Collins and Porras in their article “Building Your Company’s Vision.” These were the guys who discussed the importance of core values to guide decisions, the importance of deciding what a company “won’t do”, finding a core purpose for the company’s existence, and setting “Big, Hairy, Audacious Goals” that fit long term vision. I found the authors’ supported claim that even the most hard-nosed moneymakers often saw value in their organizations beyond the profits powerful. The value-purpose-BHAG framework fits so many different types of organizations. I’ve seen this discussion of how important it is for an organization to have clarity, for the entire “organism” that is an organization to share in the same goals, and for leaders to set vision and inspire others, come up in classes time and again.

So I was surprised to find that the article I enjoyed most this week, “The Perils of Bad Strategy” actually humorously disparaged what the author Rumelt call the “template-style strategy”. By this they mean, “filling in the blanks” for vision, mission, values, strategy. They claim that these templates are filled with buzzwords and vague, too big to handle ideas. Just within my own job search and curiosity, exploring companies’ websites this point defiantly seems valid. According to Collins and Porras, values are never supposed to change: this somewhat necessitates having a certain vagueness and grandness so that these static things can incorporate change in decades and century old companies. Rumelt believes part of the perpetuation of bad strategy due to “template style strategy…general outline goes like this: the transformational leader (1) develops or has a vision (2) inspires people to sacrifice (change) for the good of the organization, and (3) empowers people to accomplish the vision.”[i] This sounds very similar to what Collins and Porras wrote and actually is exactly the strategy for leadership outlined in one of our required Organizational Design and Implementation class readings.[ii] Instead Rumelt recommends another approach: diagnose and be honest about the critical aspects of the challenges facing the company, develop a guiding policy based on your diagnosis, and establish coherent actions or “steps that are coordinated with one another to support the accomplishment of the guiding policy.”

I think both articles offer meaningful insight to setting strategy. The Collins and Porras framework works better for the long run whereas the Rumelts better addresses immediate problems that require a strategic approach. I think the two actually support each other, and that the real problem with Collins and Porras approach is how easy it is to “fill in the blanks” and suggest that the company is something it is not instead of honestly self-evaluating. I think an organization would benefit from taking the Collins and Porras approach first, deciding values, and what was absolutely not going to fit within a companies values and then utilizing the Rumelts framework to locate strategies that could possibly fit inside the greater values, purpose, BHAG framework. This requires a company honestly looking at themselves and resisting the urge to slap “sustainability” or “value adding” into their mission or vision statements. This may sometimes mean that a company has a less romantic clarion call, but it will probably mean that their ability to add value based on solid self diagnosis will survive.

[i] The Perils of Bad Strategy (Rumelt, McKinsey Quarterly, June 2011)

[ii] John P Kotter “What Leaders Really Do” Harvard Business Review December 2001

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