211
n
Management happens
– we rst objected to having our own picture on
the cover, but PR convinced us it would give it a
more personal touch), read the rst page (checking
the acknowledgements for their name), briey ip
through some of the other chapters, and put it in a
drawer. Where it remains until October 15th, when we
remind them, “It is that time of year again”.
Previously published in Harvard Business Review, March 2002
Wanna play Strategy? Get a board game
OK, I might have exaggerated a bit above, but not too much (and
only to make a point)! Certainly not more than the people who
pretend that strategizing in their rm is a rational, systematic,
and objective process. As a matter of fact, it continues to surprise
me what people sometimes proclaim is their business strategy.
Take for instance the principles I often hear people suggest form
the basis of their acquisition strategy.
When a particular transaction is being considered, executives
have to go out and explain the logic behind the deal to directors,
Business Exposed22
investors, and analysts. Regularly, however, a strategic rationale is
only drawn up after it has been decided by management that the
deal is “desirable”. Quite often, this logic will appear contrived,
overly complex, or simply made to t the acquisition rather than
the deal resulting from a well thought-through strategy in the
rst place.
For example, I’ve often heard the logic behind a transaction
being explained in terms of complementarities; “It is a perfect
match because their geographic spread perfectly matches ours”
or, “Their product portfolio complements ours”, and so forth.
Yet, just as often I would hear the logic being explained exactly
the other way around; in terms of perfect overlap, for instance,
“It is a perfect match because they are active in the exact same
markets as we are.”
Just the fact that you “complement” each other does not
constitute a strategy. It might be worthwhile to combine forces,
but rst you’d need an argument to explain why this would
enable you to create extra value. Without such logic, it’s hollow
and meaningless. Similarly, just because you have perfect overlap
doesn’t automatically imply it’s a good strategy. Why does adding
it up enable you to do something you could not do before?
Yet, the one that always gets me is “the matrix”. Yep, really a
matrix. On the horizontal axis, one places countries (in which
the company is active). On the vertical axis, one places business
lines (in which the company is active). Then, on the intersec-
tions, one ticks boxes (with a decisive “X”) indicating in which
countries we have which line of business. And our strategy is: We
ll the boxes. As many as possible.
“This acquisition is expensive, but it enables us to immediately
tick six boxes!” Wow, yes, surely this warrants an 80 percent
takeover premium – well done indeed; six boxes! We’re doing
well, aren’t we?”
I agree strategy is simple, but it’s not that simple!
Because strategy is really not the same as a game of Risk, placing
pawns on a map of the world. Sure, perhaps it can be advanta-
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