Wednesday, October 30, 2013

How does a student learn strategy?

By Andrew Yenchik

Does a student learn strategy through academic exercise, experiment, and lecture?  Or does a student learn strategy through experience, failure, and on-the-job training?  This question has peaked my interest during the past week of lecture and readings – and I’ve attempted to find a suitable answer to quench my question.

This past summer I interned at USAA as a Program Manager.  One main job function was to participate in the yearly strategic planning activities for each line of business.  Each Program Manager manages the strategic planning, budgeting, and execution of projects within one line of business.  At USAA, these lines of business are banking, property and life insurance, and investments and financial planning.  Moreover, some programs span multiple lines of business, such as data analytics or social media.  I quickly learned as the social media Program Manager that no Porter’s Five Forces or Disruptive Innovation framework would guide me through the rigors of yearly strategic planning.

As I reflect on my recent strategic planning internship experience, I realize that those Program Managers who planned, strategized, and implemented at the highest levels and with the most impact were those that had the most years of experience at USAA – not those that had the best training in strategy or the most experience strategizing in general.  For some reason, institutional knowledge outranked academic knowledge when it came to strategy.

As a student, how do I learn strategy, especially as my experience showed me that experience trumped frameworks and 2x2 matrices?   How do I learn enough in graduate and the first few months or years in a new job to be effective, efficient, and valuable as a strategic thinker and planner?  Even McKinsey agreed that the best way to assure your strategy beats the market is by “digging into the timeless strategic question of why [you] make money.”  [1]  And how you make money can be the secret sauce that no firm wants to share. If I don't know the sauce, what do I do?

I’ve found a few ideas, at least, to set my course during my time in academia.  I’ll share what I think and invite your comments and questions.

First, it appears unimportant which you learn first, strategy frameworks or specific industry experience.  Both are needed in tandem to perform these strategic planning activities. My frustrations regarding lack of USAA specific experience is most likely similar to a fellow Program Manager with years of USAA specific experience and no training on SWOT analysis, balanced scorecards, and budget controls.  However, my value can come as one who understands the academic side of strategy and can quickly and adeptly learn the interworking of a firm (how they make money).  Then, applying the academic side of strategy to that specific firm occurs rapidly and fluidly.  This is the training that can set me apart as a strategist and consultant.   

Second, learning the frameworks, 2x2 matrices, charts, and flows does have a purpose.  How can I expect to convey my ideas and convince others, both specific to a firm and to a certain strategic idea, if I can’t communicate those ideas effectively and clearly?  While arrows and boxes may seem hard to memorize and weird to interpret, most have a purpose to convey a specific idea – and idea that I might need to convey to a top-level executive or ground level engineer.  Drudging through the monotony does have a higher purpose.

Third, the ability to apply strategic ideas quickly and accurately doesn’t always work.  If being a good strategist is a combination of academic knowledge and industry expertise, then why do in-depth strategic planning processes often fail or get set aside at firms like USAA? As Kaplan and Beinhocker reveal, “Companies that achieved such success used strategic planning not to generate strategic plans but as a learning tool to create ‘prepared minds’ within their management teams.” [2]  Perhaps the most important value such strategic planning can bring to a firm and an individual like myself is the skill-set of failing fast, learning fast, and being a prepared mind for the next intense strategic hallway discussion.

In browsing for more literature regarding my question, How does a student learn strategy?, I came across the book, The Strategist: Be the Leader Your Business Needs, written by Cynthia Montgomery.  Montgomery is a Harvard Business School (HBS) professor, best selling HBR writer, former head of the Strategy Unit at HBS, and many more accomplishments I won't take the space to list.  The title, coupled with Montgomery's accomplishments, attracted me to do some research on the book.

In an interview with Forbes, Montgomery gives an answer to almost my exact question.  When asked "How can you be a strategist in a company if you’re a young worker? What are the challenges and opportunities?” she responded:  “It takes time to develop the skills and sensibilities of a strategist. Part of it is ‘science’ – straight-up analytical ability, but a lot of it is judgment, a lot of it is feel. Being a strategist is a way of seeing, a way of thinking, a way of acting. One learns to do it well through practice.”  [3]  What an answer - I've got a long way to go, but appear to be on the right track!  I think this book will be my next read.  What do you think - how does a student really learn strategy?

[2] The Real Value of Strategic Planning (Kaplan and Beinhocker, MIT Sloan Management Review, Winter 2003)

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