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n
Management happens
geous to own multiple business lines in that particular set of
countries, but without a thorough explanation of why these
countries (and not others), and these lines of business (and not
others), and why it is benecial to have them all, that’s what it is;
an oversized game of Risk, but with real money, and real people.
“Framing contests”: what really happens in strategy
meetings
So, if strategy development is usually not a rational, structured
process, in which options are developed, analyzed, and decided
upon, what does happen in strategy-making meetings?
One of the rst series of strategy-making meetings I ever attended
was in a large newspaper company. I was basically a y on the
wall, watching the process unfold with a mixture of curiosity,
puzzlement, and amazement, like a Martian watching a cricket
game (or so I imagine). It quickly struck me that there seemed
to be a number of pre-formed sub-groups, with their own
opinions and agenda. You had the people who wanted to take the
company public, those who thought they should diversify into
other areas of business, those who thought they should become
a “green company”, and so on, and those who thought they
shouldn’t care out of a matter of principle.
Of course there were some political motives at play, but mostly
these people seemed genuinely convinced that their opinion
was what was best for the future of the company. And, rather
than coming up with new ideas, the strategy meetings seemed
to consist of the various people trying to convince each other to
believe in their view of the company, its future, and the changes
required.
Many years later, I read the PhD dissertation of Sarah Kaplan,
a former McKinsey consultant turned Professor at the Wharton
Business School. Sarah described such strategy meetings as
“framing contests”. Framing contests, she said, concern “the way
actors attempt to transform their personal cognitive frames into
predominant collective frames through a series of interactions in
Business Exposed24
the organization”. And although I had to read that sentence a
couple of times (before I endeavored to even begin to believe that
I had any clue what the heck she was talking about) it gradually
struck me as quite accurate.
In strategy meetings, people try to convince each other by
painting a mental image of the future: what would happen if they
continued as they were, and what could happen if they followed
the course of action proposed by them. They might throw in
some numbers based on “research” (put together long after
they had made up their mind), and engage in spirited debate,
complete with raised voices, rolling eyes, and the occasional
hand gesture.
And you would win the contest if, through a series of debates,
you managed to convince others and get your view of the
company and its future adopted as the dominant frame, dening
how the organization sees itself and what it is trying to achieve
in the market.
And this may not be a bad way of doing things. I saw the same
process unfold – quite successfully – in model-train maker
Hornby, where the debate centered on divesting, diversifying,
investing more, or outsourcing production to China (the latter
faction won). Similarly, it famously led Intel, over the course
of several years, to abandon its memory business in favor of
microprocessors.
Former Intel chief executive Andy Grove said about this: “The
faction representing the x86 microprocessor business won the
debate, even though the 386 had not yet become the big revenue
generator that it eventually would become.”
Stanford professor Robert Burgelman (who spent a lifetime
studying Intel), wrote about this same episode: “Some managers
sensed that the existing organizational strategy was no longer
adequate and that there were competing views about what the
new organizational strategy should be. Top management as a
group, it seems, was watching how the organization sorted out
the conicting views.”
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