Strategy skills and organizational change

THE CONCEPT OF STRATEGY

"Administrators are artisans and strategy is their clay"

Multiple Interpretations:

The concept of strategy has been the subject of multiple interpretations, so there is no single definition. However, it is possible to identify five alternative conceptions that, while competing, have the importance of complementing each other:

Strategy as Plan

A course of action consciously desired and determined in advance, in order to ensure the achievement of the company's objectives. It is usually explicitly stated in formal documents known as plans.

Strategy as Tactic

A specific maneuver intended to sideline the opponent or competitor.

Strategy as a Guideline

Strategy is any set of actions or behavior, whether deliberate or not. Defining the strategy as a plan is not enough, a concept is needed in which the resulting behavior is accompanied. Specifically, the strategy must be consistent with the behavior.

Strategy as Position

The strategy is any viable position or way of placing the company in the environment, whether it is directly competitive or not.

Strategy as Perspective

The strategy consists, not in choosing a position, but in embedding commitments in the ways of acting or responding; it is an abstract concept that represents for the organization what personality for the individual.

Henry Mintzberg's great contribution consists of an integrative approach of the different perspectives and the taking of positions on various topics that are traditionally the subject of debate in the field of management science.

The most salient points of his essay are set out below:

Strategies are both plans for the future and patterns of the past

Classical approaches to the concept of strategy define it as a "process through which the strategist withdraws from the past to mentally place himself in a desired future state and from that position make all necessary decisions in the present to reach that state."

From this definition the concept of strategy stands out as a purely rational and formal plan that is defined towards the future with total disregard of the past.

Along this same line of thought, Jean Paul Sallenave exposes the existence of two antagonistic approaches in strategic intellectual models, to finally lean towards the second of them:

Preferred approach: affirms that the future is the "continuation of the present, which, in turn, is the prolongation of the past."

Prospective approach: According to this approach, the future is not necessarily the extension of the past. The strategy can be conceived independently of the past.

Henry Mintzberg does not deny the importance of looking to the future and promoting creative visions, but introduces a key concept: the existence of patterns of organizational behavior that depend to a large extent on past experiences. The experience that arises from past actions - deliberate or not - do not stop making themselves felt, projecting into the future. Thus, the strategist knows precisely what has worked for him and what has not worked in the past; It has a deep and detailed knowledge of its capabilities and its market. Strategists are located between the past corporate capabilities and the future of their market opportunities.

Consequently, by incorporating the importance of past experiences, his concept of strategy departs from the classical conception, to arrive at the first key concept:

Strategies are both plans for the future and patterns of the past

Deliberate strategies and emerging strategies

In the epistemological field, two rival currents are known that try to explain the process of generating scientific knowledge: the deductive method and the inductive method. Under the first of them, every action is preceded by a set of expectations and hypotheses. The inductive method, on the other hand, first performs the action and later arrives at the formulation of hypotheses for its models.

This same debate occurs in the field of management. In the national order, Dr. Federico Frischknecht has titled his work «From Ideas to Action…. and from action to ideas! ”, in a clear reference to the importance of feedback that closes a circuit of« thought - action - thought….- «.

Henry Mintzberg introduces himself to these themes by recognizing the existence of "deliberate strategies" and "emerging strategies" as limiting points on a continuum along which strategies can be found that are "modeled" in the real world.

Indeed, although it is logical to imagine that "you think first and then you act", no less important - and equally logical - is to suggest that when ideas are executed, a learning process takes place through which "action drives to thought »and in this way a new strategy arises. Simply put, strategies can be formed in response to a changing situation, or they can be deliberately generated.

“It is not required that the strategies be deliberate, it is also possible that, to a greater or lesser extent, they emerge

Strategic learning

Behind what was exposed in the previous section, is the concept of «strategic learning». No strategist "thinks for a few days and works for others", on the contrary, he is in constant synchronization of "ideas - action" without damaging the vital feedback loop that unites them.

This concept implies that in some way "all levels of the organization are strategists." The notion that strategy is something that must be generated at high levels, far from the details of daily activity, is one of the greatest fallacies of conventional strategic management.

While an exclusively deliberate strategy impedes learning once it has been formulated, an emerging strategy promotes and stimulates it. Indeed, learning happens on the go…

However, it must be borne in mind that just as deliberate strategies impede learning, the development of exclusively emergent strategies prevents control.

Finally, it can be concluded:

"The most effective strategies are those that combine deliberation and control with flexibility and organizational learning"

Organizational change

According to the theory of organizational change, strategists have to choose between treating change incrementally and linearly, or fundamentally and diagnostically. If an "incremental change" strategy is chosen, chances are that "first things first" are addressed and the necessary changes are made in order, one by one. If a "fundamental change" strategy is chosen, the consequences for the organization are that the organization itself, its parts, and its relationships will change simultaneously. The effectiveness of these rival approaches is debated, with strong adherents in both cases. Let's see two examples:

Eliyahu Goldratt, in his work "The Goal" points out that "every company, in the process of reaching its goal, encounters one or more bottlenecks. If it were not so, the company would have infinite profit ». Based on your approach, once a bottleneck is overcome, a feed-back is generated, and a new constraint to work on is identified. This process allows the continuous improvement of the results, through the administration of incremental changes implemented according to a specific order: the importance of its negative impact on the achievement of the objectives.

Richard Beckhard and Wendy Pritchard, on the other hand, enroll in the "fundamental change" approach. Organizational leaders must have a clear vision of the end state they want for the entire system, including dimensions such as their business, their organization, and their ways of working. That vision must act as an integrating force in a multitude of seemingly disparate changes to be made. The plan for making the changes must be integrated.

In this regard, Mintzberg deploys a reasoning of a Kuhnian nature: both approaches are effective, the key is to know how and when to promote change. The "quantitative theory" - on which it rests - points out that for most of the time the same strategic orientation followed by "evolutionary" change is followed, until the organization loses synchronization with the environment and a drastic strategic turn in which many of its patterns are altered. This revolutionary disturbance caused a "leap" towards new stability.

First, it must be considered that the very concept of strategy is rooted in stability and not in change; the absence of stability implies the absence of strategy, as there will be no direction towards the future or a pattern for the past.

Having made this first assessment, identify two different periods of organizational behavior according to the moment:

"Normal Development"	"Quantitative Revolution"
Stability governs: strategic changes are incremental, but within the same orientation.	There is a radical strategic shift, driven by environmental turbulence, in which changes occur in the mission, identity, relationships between key stakeholders, in the way of working and-fundamentally-in culture.
It happens most of the time.	Strategic reorientations occur through short, concise quantitative leaps.
The emphasis is on efficiency: By doing "more of the same" you enjoy the benefits of the learning curve, allowing you to gain in efficiency, while developing distinctive qualities and reinforcing your identity.	The emphasis is on efficiency: it is the time for experimentation and creativity, in the effort to adapt to new environmental conditions.
It is time to "harvest"	It is time to "sow"
It is characterized by rigidity and control	It is characterized by flexibility and experimentation

STRATEGY PROFILE

The role of the strategy "modeler"

The strategist is not only a planner or a visionary but a subject in continuous learning to govern a process in which strategies and visions can emerge, as well as can be deliberately conceived.

Dedication, experience, personal touch, mastery of detail, a sense of harmony and integration, emotion and passion, are the basic ingredients for the success of the strategist.

Based on all the above, it is possible to identify four points to consider:

Stability management

If strategies require stability, strategists should not be obsessed with generating fundamental change. Rather, they must maintain orientation, gain efficiency by focusing on processes, and reinforce identity and distinctive features.

Detection of discontinuities

Without prejudice to what is stated in the previous point, it is probable that the fact of "doing more of the same" will cause the organization to lose synchronization with the environment. The strategist's real challenge is to detect the subtle discontinuities that may indicate the need for fundamental changes. For this, the strategist must have an agile mind and a clear understanding of the situation.

Business insight

The leader cannot "strategize" away from the operational details of his business. On the contrary, there, in the line of action, is where the best information is found, which allows to detect opportunities and learn by contrasting ideas and facts.

Pattern management

The manager's job is not only to preconceive strategies, but also to recognize their emergence in any other part of the organization and intervene when necessary.

PREVIOUS AND CURRENT APPROACHES TO STRATEGIES

Concept Innovation

As a summary of what has been exposed in the previous sections and in order to highlight the main contributions of Henry Mintzberg, the following comparative table is presented:

Concept	Previous Approach	Henry Mintzberg
Definition of Strategy	"Rational process through which the strategist withdraws from the past to mentally place himself in a desired future state and from that position make all the necessary decisions in the present to reach that state."	"The strategy must be defined through the integration and complementarity of its different meanings: as a Plan, as a Guideline, as a Tactic, as a Position and as a Perspective"
Genesis of the Strategy	"Effective strategies are formally designed through an analytical process carried out by the highest managers of the organization"	"It is not required that the strategies be deliberate, it is also possible that, to a greater or lesser extent, they emerge"
Organizational change	Incremental Change “The change must be implemented in an incremental and linear way. It must be addressed "first to first", implementing the necessary changes according to their order of importance, one by one	“Both approaches are effective, the key is to know how and when to promote change. The «quantitative theory» indicates that during most of the time the same strategic orientation followed by the «evolutionary» change is followed, until the organization loses synchronization with the environment and a drastic strategic turn is necessary in which they are altered many of their patterns. This revolutionary disturbance caused a "leap" towards a new stability "
Fundamental change Organizational leaders must have a clear vision of the end state they want for the entire system, including dimensions such as their business, their organization, and their ways of working. That vision must act as an integrating force for a multitude of seemingly disparate changes to be made. The plan to make the changes must be integrated
Strategist Location	"The strategies must be designed by the highest levels of the organization."	"In some way, all levels of the organization are strategists"