Behaviour Of The Chief Executive Introduction - Strategic Management

The aim of this chapter is to provide some personal views on the way strategic management might develop, and to add a few thoughts about strategic success. Strategic management has made great strides since it emerged as a topic under its old name of long-range planning. We now have better techniques of strategic analysis, and new concepts of strategy formulation, and we understand more about the behavioural aspects of managing strategically. It is perhaps of interest to try to speculate where the subject might be heading.

From observation over many years, I believe that many organisations follow a strategic path, stimulated by something, and charging off down a path without thinking about the implications. Somehow we do not seem to learn as much as we should from past experience. To my knowledge there has been at least one major study of the failure rate in acquisitions at roughly ten yearly intervals. The conclusions in the 1970s, 1980s and more recently 1993 had one thing in common. The failure rate was around 50 per cent. Either something continually goes wrong in the pre-merger strategy, or we are still struggling to learn how to implement the strategies which are so perfect on paper.

My belief is that the next decade of advances in strategic management will be much more about managing strategic change than formulating strategy. Indeed one could see the term ‘strategic change’ becoming the new byword for the next phase of strategic management.

Strategic emphasis has, over time, been moving to a greater focus on implementation. I think the future will bring a greater merging of formulation skills with those of organisational behaviour and change management. Put another way, successful change comes about through a blend of the hard and soft disciplines, the analytical and the behavioural. Neglect of one in favour of the other is likely to lead to actions which do not yield the desired results. Trends in management rarely appear from nowhere, and the emphasis I see on strategic change is a logical step in the evolution of strategic management.

Nevertheless, it does challenge the traditional boundaries between functions, and requires a closer binding of many functions which have traditionally been regarded as independent. This does not mean that planners have to report to organisational development people, or that human resources in some way comes under planning. It does mean that traditional views of roles have to change, and that each should be seen as a non-watertight element of an overall task that has to be conceived as an entity.

Igor Ansoff can fairly be described as the father of strategic management, first exposing the concept of strategic planning and later leading the thinking that developed this to the concept of strategic management. In a letter to me about the new journal, he observed: ‘The role of the corporate planner . . . is already obsolete, both in theory and practice, and the journal could contribute to the concept of the strategic change manager . . . who combines four disciplinary perspectives: analytic, psychological, sociological and political.’

While the title of corporate planner – or the many other variations on this theme – may live on, the role in successful organisations is much as Igor describes it. Similarly, organisational development can no longer be a staff activity whose efforts are unrelated to the corporate objectives and strategy, while those organisations which give little thought to organisational behavior must find mechanisms to bring these skills into the change process. The same argument can be made for many of the activities of the human resource function, such as management development. Overall there is a need for leadership and management of a high order, activities which cannot be separated from strategic decision making or organisational development. The real issue for all players is how to manage strategic change in an era of increasing turbulence. While there are many structural solutions, the most important step is the realisation of the mutual interdependence of all these players, if successful change is to take place.

The turbulence in the business environment is a driver of change, and leads to what might be called a situational approach to strategic management. In particular I refer to the recent thinking by Igor Ansoff which appears elsewhere in this book. However, the events which change the business prospects also change the expectations and attitudes of the people we employ. The future of strategic management, which I see as strategic change, will also be a future which takes far more account of the economic value of human resources. I foresee far more emphasis on approaches and techniques to address this issue than has been the case in the past, and I would hope for a kit bag of tools which matches the range of choice now available for dealing with other aspects of strategy.
I should like to leave the last new thought with Igor Ansoff:Important as they are, un disciplinary perspectives of a multidisciplinary problem do not automatically add up to a solution of the total problem. This fact is amply supported by the voluminous literature in cybernetics, general systems theory and sociology.The second reason is that I cannot think of any really important problem in today’s society and its organisations whose solution is not vitally dependent on intimate contemporaneous interplay of the whole range of ‘hard’ and ‘soft’ sciences.

More emphasis will be placed on methods that provide a better strategic insight into human resource management; leadership and management of a much higher order will be required; and a more situational approach to strategic management will become the norm, in order to relate to the degree of environmental turbulence faced by the particular organization.


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