More on strategy from Bower and Gilbert

Earlier this week I posted on the article by Joseph Bower of Harvard Business School and Clark Gilbert of Brigham Young University Idaho entitled "How Managers Everyday Decisions Create - or Destroy - Your Company's Strategy" (free link). Here are more interesting tidbits from the article.

The overarching theme is the tension between corporate decisionmakers, business unit managers, and operational managers when it comes to creating and implementing strategy. Corporate leadership can create strategy, but has very little direct involvement in carrying it out. Hence the plaintive cry of many CEOs when visiting their divisional offices: "What the hell happened to our strategic plan?" Followed by stammers, shrugs from management and a suggestion to break for lunch.

Similarly, general managers have authority to allocate resources in service to (or counter to) the corporate strategy, but have great difficulty working across divisional boundaries--which is frequently required to implement real strategic change.

Paradoxically, according to Bower and Gilbert, lower-level operations staff can easily work across divisional boundaries--because their work is highly related across the divisions. (I found this to be true when I worked as a product manager at a large company--I could utilize development staffs from other business units, and in some cases my division president might not even have known his counterpart.)

The authors' prescription is for top management to

1. carefully monitor how strategy is implemented
2. intervene when fundamental differences in strategic viewpoint arise
3. "use operational managers to get work done across divisional lines"
   
4. create space outside the formal strategy process to nurture disruptive ideas
   
5. actively manage the resource allocation process, rather than leave it to a system
   

(Picture from zenpixel via stock.xchng)

strategy, Harvard Business Review