On the folly of outsourcing strategy: A thought experiment for strategists
Much of the literature in the strategy field, practitioner and academic, artificially and often unwittingly splits strategy into formulation and implementation. This is primarily because it’s easier for consultants and educators to focus on (and sell) strategy formulation leaving implementation as somebody else’s problem. Anyone who has been in a management position knows that talking about doing things (formulating plans) is far easier than getting things done (implementation).
To ensure a steady stream of fees, strategy formulation is then positioned as a complex undertaking out of the ken of ordinary managers. What is needed are strategy consultants with impressive CVs, MBA’s, crystal balls and snake oil to divine your strategy. It’s self-serving and strategy formulation and implementation should be a normal part of every managers role.
In my hard-won PhD I developed a thought experiment that demonstrates using external consultants to formulate your strategy is illogical and closer to madness than sensible. Thought experiments can be revealing in situations that are impossible or unethical to create. Einstein often used them!
The traditional view of strategy as a task able to be performed by individuals external to an organisation (i.e. consultants) infers that strategists are interchangeable. If the strategic analysis is performed ‘accurately’ (an impossibility), then the ‘right’ strategy (there is no such thing) will be identified. In other words, it is waiting to be “discovered” rather than developed. If this was true then we should be able to swap strategists between organisations or, as in this thought experiment, military strategists from one army to another with the same strategic decisions and outcomes. If strategy (remember that’s formulation and implementation) can be developed by outsiders then anyone with the requisite strategy skills will do.
Let’s test that.
In this thought experiment we hold everything else constant (and suspend disbelief) and swap two military leaders and strategists. The two protagonists are Arthur Wellesley (the Duke of Wellington) and Napoleon Bonaparte and we are swapping them as they are preparing for the upcoming battle near the Belgium municipality of Waterloo. They find themselves in charge of an unfamiliar army tasked with obtaining victory for their “new” side. History has generally recognised both as outstanding military strategists of their time with impressive records in warfare. If anyone can do it, they can!
Let’s look at the altered situation from Wellesley’s perspective who is now in command of the French army. Wellesley clearly retains his ability to formulate a sound strategy to beat the English but, in his altered context there are two major impediments to his ability to be an effective strategist.
First, can he formulate a strategy with the French army’s strengths and weaknesses taken fully into account? This is not simply the quantitative information, such as numbers of men, weapons and equipment available, but the important qualitative and intangible information. This is only obtained through exposure and experience such as the army’s morale, effectiveness in differing situations, and the strengths and competency of his officers. Wellesley could seek council from senior officers who, now confronted with a commander they are not familiar with (and English looking), may be considerably less forthcoming than they would be with someone in whom they had developed trust and a mutual understanding (Uzzi, 1996). Developing a strategy without first-hand experience and knowledge of the army/organisation is problematic because, as Rumelt (2011) notes, there is no substitute for on-the-ground experience. Wellesley, in true consultant style, will need to borrow his officer’s montre to tell them the heure.
The second major impediment occurs when implementation commences. As soon as Wellesley exits his tent and opens his mouth his troubles would start. Merde. It is difficult to imagine Wellesley bridging the cultural chasm between himself and the French army despite being able to speak fluent French. Napoleon would likely suffer a similar fate with the English army. I consider that the likely result is that both armies would pack up and go home. Who wants to fight and die for someone they don’t know?
An important reflection is that the content of the strategy developed is irrelevant. That’s a point worth dwelling on for anyone developing strategy. No matter how brilliant or insightful the strategy developed by either Wellesley or Napoleon, the content of the strategy will go unnoticed. Both are eminently qualified to formulate and lead the implementation of a military strategy but neither will have the cultural legitimacy required.
This thought experiment allows insight into how social embeddedness (i.e. people inside an organisation who have developed trust and confidence) operates within strategic management. In formulation it allows effective strategies to be developed with the knowledge of the internal and external contexts of the organisation. The strategy practitioner is inside the organisational ‘black box’ helping avoid the problem observed by Mintzberg - ‘If you are so smart, why didn’t you formulate a strategy that we dumbbells were capable of implementing’.
In implementation it provides credibility, connectedness and legitimacy with individuals in the organisation. As a research participant observed - people in the organisation need to fundamentally understand why they would want to work with you or why they come to work each day. This is the basis for the inter-personal skills required to communicate, motivate and connect with people allowing strategy to be implemented effectively.
The take home message – people external to your organisation, no matter how clever and strategic they may be, are unlikely to be able to formulate or implement strategy effectively. Consultants should be used to help with strategic management processes, not content. And sparingly!