Read the two articles attached and the Robin Hood case, reflect on the following questions:
What strategic problems does Robin Hood have? How do you identify those problems as strategic versus nonstrategic?
It was in the spring of the second year of his insurrec-
tion against the High Sheriff of Nottingham that Robin
Hood took a walk in Sherwood Forest. As he walked he
pondered the progress of the campaign, the disposition of
his forces, the Sheriff's recent moves, and the options that
The revolt against the Sheriff had begun as a personal
crusade, erupting out of Robin's conflict with the Sheriff
and his administration. Alone, however, Robin Hood could
do little. He therefore sought allies, men with grievances
and a deep sense of justice. Later he welcomed all who
came, asking few questions, and only demanding a will-
ingness to serve. Strength, he believed, lay in numbers.
He spent the first year forging the group into a disci-
plined band, united in enmity against the Sheriff, and will- ing
to live outside the law. The band's organization was
simple. Robin ruled supreme, making all important deci-
sions. He delegated specific tasks to his lieutenants. Will
Scarlett was in charge of intelligence and scouting. His
main job was to shadow the Sheriff and his men, always
alert to their next move. He also collected information
on the travel plans of rich merchants and tax collectors.
Little John kept discipline among the men, and saw to it
that their archery was at the high peak that their profession
demanded. Scarlock took care of the finances, convert-
ing loot into cash, paying shares of the take, and finding
suitable hiding places for the surplus. Finally, Much the
Miller's son had the difficult task of provisioning the ever-
increasing band of Merrymcn.
The increasing size of the band was a source of satis-
faction for Robin, but also a source of concern. The fame of
his Merrymen was spreading, and new recruits poured in
from every corner of England. As the band grew larger, their
small bivouac became a major encampment. Between raids
the men milled about, talking and playing games.
Vigilance was in decline, and discipline was becoming
harder to enforce. "Why," Robin reflected, "I don't know
half the men 1 run into these days."
The growing band was also beginning to exceed the
food capacity of the forest. Game was becoming scarce,
and supplies had to be obtained from outlying villages.
The cost of buying food was beginning to drain the band's
financial reserves at the very moment when revenues were in
decline. Travelers, especially those with the most to lose,
were now giving the forest a wide berth. This was
• Prepared by Joseph Lampel. City University, London. Copyright Joseph Lampe,l 1985, revised 1991. Reprinted with permission.
costly and inconvenient to them, but it was preferable to
having all their goods confiscated.
Robin believed that the time had come for the
Merrymen to change their policy of outright confisca-
tion of goods to one of a fixed transit tax. His lieutenant
strongly resisted this idea. They were proud of the Merry-
men's famous motto: "Rob the rich and give to the poor."
"The farmers and the townspeople," they argued, "arc our
most important allies. I low can we tax them, and still hope
for their help in our fight against the Sheriff!"
Robin wondered how long the Mcrrymen could keep to
the ways and methods of their early days. The Sheriff was
growing stronger and better organized. He now had the
money and the men, and was beginning to harass the band,
probing for its weaknesses.
The tide of events was beginning to turn against the
Merrymcn. Robin felt that the campaign must be deci-
sively concluded before the Sheriff had a chance to deliver a
mortal blow. "But how," he wondered, "could this be
Robin had often entertained the possibility of killing the
Sheriff, but the chances for this seemed increasingly remote.
Besides, while killing the Sheriff might satisfy hi personal
thirst for revenge, it would not improve the situ- ation. Robin
had hoped that the perpetual state of unrest. and the Sheriff's
failure to collect taxes, would lead to his removal from office.
Instead, the Sheriff used his politi- cal connections to obtain
reinforcement. He had power- ful friends at court, and was
well regarded by the regent. Prince John.
Prince John was vicious and volatile. He was con-
sumed by his unpopularity among the people, who wanted the
imprisoned King Richard back. He also lived in
constant fear of the barons, who had first given him the
regency, but were now beginning to dispute his claim to
the throne. Several of these barons had set out to collect the
ransom that would release King Richard the Lion- heart
from his jail in Austria. Robin was invited to join the
conspiracy in return for future amnesty. It was a danger-
ous proposition. Provincial banditry was one thing, court
intrigue another. Prince John's spies were everywhere. If
the plan failed, the pursuit would be relentless and retribu-
The sound of the supper horn startled Robin from
his thoughts. There was the smell of roasting venison in
the air. Nothing was resolved or settled. Robin headed for
camp promising himself that he would give these problems
his utmost attention after tomorrow's raid.
7/11/2014 Why Smart People Struggle with Strategy – Roger Martin – Harvard Business Review
HBR Blog Network
Why Smart People Struggle with Strategy by Roger Martin | 2:00 PM June 12, 2014
Strategy is often seen as som ething really sm art people do — those head-of-the-class folks with top-notch academ ic
credentials. But jus t because these are the folks attracted to strategy does n’t m ean they will naturally excel at it.
The problem with sm art people is that they are us ed to seeking and finding the right answer; unfortunately, in strategy
there is no single right answer to find. Strategy requires m aking choices about an uncertain future
(http://hbr.org/tools/playing-to-win-strategy-toolkit) . It is not possible, no m atter how m uch of the ocean you boil, to
dis cover the one right answer. There isn’t one. In fact, even after the fact, there is no way to determ ine that one’s
strategy choice was “right,” because there is no way to judge the relative quality of any path agains t all the paths not
actually chos en. There are no double-blind experim ents in strategy.
To be a great strategist, we have to step back from the need to find a right answer and to get accolades for identifying
it. The best strategists aren’t intim idated or paralyzed by uncertainty and am biguity; they are creative enough to im agine
possibilities that m ay or m ay not actually exist (http://hbr.org/tools/playing-to-win-strategy-toolkit) and are willing to try a
course of action knowing full well that it will have to be tweaked or even overhauled entirely as events unfold.
The es sential qualities for this type of person are flexibility, im agination, and resilience. But there is no evidence that
these qualities are correlated with pure intelligence. In fact, the late organizational learning scholar Chris Argyris
argued the oppos ite in his clas sic HBR article Teaching Sm art People How to Learn (http://hbr.org/1991/05/teaching-
sm art-people-how-to-learn/ar/1) . In his study of strategy consultants , Argyris found that sm art people tend to be m ore
brittle. They need both to feel right and to have that correctness be validated by others. When either or both fail to occur,
sm art people becom e defens ive and rigidly so.
This does not im ply that sm art people should be kept away from strategy. It does im ply however that strategy should
not be a m onoculture — as it can becom e in strategy consulting firm s — of high-IQ analytical wizards. Great strategy is
aided by diversity of thought and attitude. It needs people who have experienced failure as well as success . It needs
people who have a great im agination. It needs people who have built their resilience in the past. And m ost im portantly,
it needs people who respect one another for their range of qualities , som ething that is often going to be m ost
difficult for the proverbial sm artest person in the room .
Strategy bewilders and confuses at every turn. This led the Economist to claim that: “Nobody really knows what strategy is”. The chasm at the heart of our knowledge of strategy, argues Costas Markides, requires a return to fundamentals.
What is strategy and how do you know if you have one?
What is strategy, really? Despite the obvious Not that the confusion is restricted to academics. importance of a superior strategy to the success of If asked, most practising executives would define an organisation and despite decades of research on strategy as “how I could achieve my company’s the subject, there is little agreement among objectives”. Although this definition is academics as to what strategy really is. From technically correct, it is so general that it is notions of strategy as positioning to strategy as practically meaningless. visioning, several possible definitions are fighting for legitimacy. Lack of an acceptable definition has Needless to say, this state of affairs is opened up the field to an invasion of sexy slogans unfortunate. Perhaps nothing highlights better and terms, all of which add to the confusion and the sad (comical?) state of affairs surrounding state of unease. strategy than the following.
What is strategy and how do you know if you have one? Summer 2004 Volume 15 Issue 2 Business Strategy Review 5
In November 1996, the most prominent strategy academic, Michael Porter of Harvard, published a Harvard Business Review article grandly entitled “What is strategy?” (Harvard Business Review, Nov-Dec 1996).This was followed only a few months later by another famous academic, Gary Hamel of London Business School, with an equally impressively titled article, “The search for strategy”(London Business School working paper, 1997). That after 40 years of academic research on the subject, two of the most prominent academics in the field felt the need to go out of their way and start searching for strategy goes to show how much confusion we have managed to create regarding such a crucial business decision.
Although part of the confusion is undoubtedly self-inflicted, a major portion of it also stems from an honest lack of understanding as to the content of strategy. I would like to propose a view of strategy that is based on my research on companies that have strategically innovated in their industries. These are companies that not only developed strategies that are fundamentally different from the strategies of their competitors but whose strategies also turned out to be tremendously successful.
Strategy: your move?
The building blocks of Microsoft’s successful strategy are the same as the building blocks of the strategy that propelled Sears to industry leadership 100 years ago
Based on my research on these successful strategists, I’d like to propose that there are certain simple but fundamental principles underlying every successful strategy. When one goes beyond the visible differences among strategies and probes deeper into the roots of these strategies, one cannot fail but notice that all successful strategies share the same underlying principles or building blocks. Thus, the building blocks of Microsoft’s successful strategy are the same as the building blocks of the strategy that propelled Sears to industry leadership 100 years ago. My argument is that by understanding what these building blocks are, an organisation can use them to develop its own successful strategy. The building blocks are:
Strategy must decide on a few parameters
In today’s uncertain and ever-changing environment strategy is all about making some very difficult decisions on a few parameters. It is absolutely essential that the firm decides on these parameters because they become the boundaries within which people are given the freedom and the autonomy to operate and try things out. They also define the company’s strategic position in its industry. Without clear decisions on these parameters, the company will drift like a rudderless ship in the open seas.
What are these parameters? A company has to decide on three main issues: who will be its targeted customers and who it will not target; what products or services it will offer its chosen customers and what it will not offer them; and how it will go about achieving all this – what activities it will perform and what activities it will not perform.
Business Strategy Review Summer 2004 Volume 15 Issue 2 What is strategy and how do you know if you have one? 6
A company will be successful if it chooses a distinctive (that is, different from competitors) strategic position
These are not easy decisions to make and each question has many possible answers, all of them ex-ante possible and logical. As a result, these kinds of decisions will unavoidably be preceded with debates, disagreements, politicking and indecision. Yet, at the end of the day, a firm cannot be everything to everybody; so clear and explicit decisions must be made. These choices may turn out to be wrong but that is not an excuse for not deciding.
It is absolutely essential that an organisation make clear and explicit choices on these three dimensions because the choices made become the parameters within which people are allowed to operate with autonomy. Without these clear parameters, the end result can be chaos. Seen in another way, it would be foolish and dangerous to allow people to take initiatives without some clear parameters guiding their actions.
Not only must a company make clear choices on these parameters, it must also attempt to make choices that are different from the choices its competitors have made. A company will be successful if it chooses a distinctive (that is, different from competitors) strategic position. Sure, it may be impossible to come up with answers that are 100 per cent different from those of competitors but the ambition should be to create as much differentiation as possible.
Given the importance of coming up with clear answers to these three issues, the question is: who comes up with possible answers to these questions; who decides what to do out of the many possibilities; and how long do the decisions remain unchanged?
Who comes up with ideas? Given the right organisational context, strategic ideas (on who to target, what to sell and how to do it) can come from anybody, anywhere, anytime. They may emerge through trial and error or because somebody has a “gut feeling” or because somebody “got lucky” and stumbled across a good idea. They may even emerge out of a formal strategic planning session. (However dismissive we can be of the modern corporation’s formal planning process, the possibility still exists that
some good ideas can come out of such a process.) No matter how the ideas are conceived, it is unlikely that they will be perfect from the start. The firm must therefore be willing and ready to modify or change its strategic ideas as it receives feedback from the market.
In general, there are numerous tactics at our disposal to enhance creativity at the idea- generation stage. Let me list a few of them:
Encourage everyone in the organisation to question the firm’s implicit assumptions and beliefs (its sacred cows) as to who our customers really are, what we are really offering to them and how we do these things. Also, encourage a fundamental questioning of the firm’s accepted answer to the question: “what business are we in?” To facilitate this questioning, create a positive crisis. If done correctly, this will galvanise the organisation into active thinking. If done incorrectly, it will demoralise everybody and create confusion and disillusionment throughout the organisation. Develop processes in the organisation to collect and utilise ideas from everybody – employees, customers, distributors and so on. At Lan & Spar Bank, for example, every employee is asked to contribute ideas through a strategy workbook; Schlumberger has an internal venturing unit; Bank One has a specific customer centre where all customers are encouraged to phone and express their complaints; at my local supermarket, there is a customer suggestion box. Different organisations have come up with different tactics but the idea is the same: allow everybody to contribute ideas and make it easy for them to communicate their ideas to the decision makers in the organisation. Create variety in the thinking that takes place in formal planning processes. This can be achieved not only by using a diverse team of people but by also by utilising as many thinking approaches as possible. Institutionalise a culture of innovation. The organisation must create the organisational environment(culture/structure/incentives/people) that promotes and supports innovative behaviours.
What is strategy and how do you know if you have one? Summer 2004 Volume 15 Issue 2 Business Strategy Review 7
This is not an exhaustive list of tactics that could be used to increase creativity in strategy making. I am sure that other tactics and processes exist or can be thought of. The principle, though, remains the same: at this stage of crafting an innovative strategy, the goal must be to generate as many strategic ideas as possible so that we have the luxury of choosing.
Who decides? Even though anyone in an organisation can come up with new strategic ideas (and everybody should be encouraged to do so), it is the responsibility of top management to make the final choices.
There have been many calls lately to make the process of strategy development “democratic” and “flexible” – to bring everybody in the organisation into the process. The thinking here is that the odds of conceiving truly innovative ideas are increased if thousands of people rather than just five or 10 senior managers put their minds to work. And this much is true.
But the job of choosing the ideas that the firm will actually pursue must be left to top management. Otherwise, the result is chaos, confusion and ultimately a demotivated workforce. After all is said and done, it is the leaders of an organisation, not every single employee, who must choose which ideas will be pursued.
Choosing is difficult. At the time of choosing no- one knows for sure whether a particular idea will work nor does anyone know if the choices made are really the most appropriate ones.
One could reduce the uncertainty at this stage by either evaluating each idea in a rigorous way or by experimenting with the idea in a limited way to see if it works. However, it is crucial to understand that uncertainty can be reduced but not limited. No matter how much experimentation we carry out and no matter how much thinking goes into it, the time will come when a firm must decide one way or another. Choices have to be made and these choices may turn out to be wrong. However, lack of certainty is no excuse for indecision.
Not only must a firm choose what to do but it must also make it clear what it will not do. The worst strategic mistake possible is to choose something but also keep our options open by doing other things as well. Imagine an organisation where the CEO proclaims that “our strategy is crystal clear: we will do ABC” and at the same time the employees of the organisation see the firm doing XYZ as well as ABC. In their eyes, this means one of two things: either we don’t really have a strategy; or top management is totally confused. Either way, the organisation is left demoralised and confidence in senior
management is shattered. Organisations that say one thing and then do another are those that have failed to make clear choices about what they will do and what they will not do with their strategy.
The difficult choices made by Canon in attacking Xerox highlight the importance of choosing in an explicit way what to do and what not to do. At the time of the attack, Xerox had a lock on the copier market by following a well-defined and successful strategy, the main elements of which were the following: having segmented the market by volume, Xerox decided to go after the corporate reproduction market by concentrating on copiers designed for high-speed, high-volume needs. This inevitably defined Xerox’s customers as big corporations, which in turn determined its distribution method: the direct sales force. At the same time, Xerox decided to lease rather than sell its machines, a strategic choice that had worked well in the company’s earlier battles with 3M.
At this stage of crafting an innovative strategy, the goal must be to generate as many strategic ideas as possible so that we have the luxury of choosing
Business Strategy Review Summer 2004 Volume 15 Issue 2 What is strategy and how do you know if you have one? 8
Unless we take a holistic, big-picture approach in designing the activities of our company, our efforts will backfire
Xerox’s strategy proved to be so successful that several new competitors, among them IBM and Kodak, tried to enter the market by adopting the same or similar tactics.
Canon, on the other hand, chose to play the game differently. Having determined in the early 1960s to diversify out of cameras and into copiers, Canon segmented the market by end-user and decided to target small and medium-sized businesses while also producing PC copiers for individuals. At the same time, Canon decided to sell its machines through a dealer network rather than lease them. And while Xerox emphasised the speed of its machines, Canon elected to concentrate on quality and price as its differentiating features.
Cutting the story short, where IBM’s and Kodak’s assault on the copier market failed, Canon’s succeeded. Within 20 years of attacking Xerox, Canon emerged as the market leader in volume terms.
There are many reasons behind the success of Canon. Notice, however, that just as Xerox did 20 years before it, Canon created for itself a distinctive strategic position in the industry – a position that was different from Xerox’s. Whereas Xerox targeted big corporations as its customers, Canon went after small companies and individuals; while Xerox emphasised the speed of its machines, Canon focused on quality and price; and whereas Xerox used a direct sales force to lease its machines, Canon used its dealer network to sell its copiers. Rather than try to beat Xerox at its own game, Canon triumphed by creating its own unique strategic position.
As in the case of Xerox, these were not the only choices available to Canon. Serious debates and disagreements must undoubtedly have taken place within Canon as to whether these were the right choices to pursue. Yet choices were made and a clear strategy with sharp and well-defined boundaries was put in place. As in the case of Xerox, Canon was successful because it chose a unique and well-defined strategic position in the industry – one with distinctive customers, products and activities.
Strategy must put all our choices together to create a reinforcing mosaic
Choosing what to do and what not to do is certainly an important element of strategy. However, strategy is much more than this. Strategy is all about combining these choices into a system that creates the requisite fit between what the environment needs and what the company does. It is the combining of a firm’s choices into a well-balanced system that’s important, not the individual choices.
The importance of conceptualising the company as a combination of activities cannot be overemphasised. In this perspective, a firm is a complex system of interrelated and interdependent activities, each affecting the other: decisions and actions in one part of the business affect other parts, directly or indirectly. This means that unless we take a holistic, big- picture approach in designing the activities of our company, our efforts will backfire. Even if each individual activity is optimally crafted, the whole may still suffer unless we take interdependencies into consideration. The numerous local optima almost always undermine the global optimum.
The problem is that human beings can never really comprehend all the complexity embedded in our companies. We therefore tend to focus on one or two aspects of the system and try to optimise these sub-systems independently. By doing so, we ignore the interdependencies in the system and we are therefore making matters worse. Since it takes time for the effect of our actions to show up, we do not even see that we are the source of our problems. When the long- term effects of our short-sighted actions hit home, we blame other people and especially outside forces for our problems (we had no forecasts, demand is unpredictable, the economy is not growing and so on).
In designing a company’s system of activities, managers must bear four principles in mind:
First, the individual activities we choose to do must be the ones that are demanded by the market.
What is strategy and how do you know if you have one? Summer 2004 Volume 15 Issue 2 Business Strategy Review 9
Second, the activities we decide to perform must fit with each other.
Third, activities must not only fit but must also be in balance with each other.
Finally, in designing these activities, it is important to keep in mind that the collection of these activities will form an interrelated system.
Not only should we pay particular attention to the interrelationships in this system but we should also be aware that the structure of this system will drive behaviour in it. What people do in a firm is conditioned by this underlying structure. Therefore, if we want to change behaviour, we will have to change the structure of the system.
Strategy must achieve fit without losing flexibility
Creating the right fit between what the market needs and what a firm does can backfire if the environment changes and the firm does not respond accordingly. We are all familiar with the story of the frog.
When a frog is put in a pot of boiling water, it jumps out; when, instead, the same frog is put in a pot of cold water and the water is slowly brought to a boil, the frog stays in the pot and boils to death.
In the same manner, if a company does not react to the constant changes taking place in its environment, it will find itself boiled to death.
This implies that a company needs to create the requisite fit with its current environment while remaining flexible enough to respond to (or even create) changes in this environment. But what does it mean when we say that a firm must remain flexible?
The way I use the term here, I imply three things: a firm must first be able to identify changes in its environment early enough; it must then have the cultural readiness to embrace change and respond to it; and it must have the requisite skills and competencies to compete in whatever environment emerges after the change. Thus, flexibility has a cultural element to it (being willing to change) as well as a competence element to it (being able to change).
Strategy needs to be supported by the appropriate organisational environment
Any strategy, however brilliant, needs to be implemented properly if it is to deliver the desired results. However, implementation does not take place in a vacuum. It takes place within
an organisational environment, which we, as managers, create. It is this organisational environment that produces the behaviour that we observe in companies. Therefore, to secure the desired strategic behaviour by employees, a firm must first create the appropriate environment – that is, the environment that promotes and supports its chosen strategy.
By environment, I mean four elements: an organisation’s culture; its incentives; its structure; and its people. (What I call here “environment” is what is widely known as the 7S framework developed by McKinsey and Co. The 7S are: style, strategy, structure, systems, skills, staff and superordinate goals.)
A company that wants to put into action a certain strategy must first ask the question: “what kind of culture, incentives, structure and people do we need to implement the strategy?”
In other words, to create a superior strategy, a company must think beyond customers, products and activities. It must also decide what underlying environment to create and how exactly to create it so as to facilitate
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