March 1987
Responding to today’s needs doesn’t necessarily preclude tomorrow’s
visions. Consider this comment from a CEO in the midst of a corporate
turnaround: “I like to fuzz up time scales completely. At the same time
I’m talking about rigorous cost cutting, I’m also talking about the
possibility of a major acquisition that would completely restructure our
company. People get very upset by that, but I feel that you can do
those two things at the same time.”
These words express what I call “strategic opportunism”:
1
the ability to remain focused on long-term objectives while staying
flexible enough to solve day-to-day problems and recognize new
opportunities. In several studies of senior executives, I have
discovered that effective managers strike this balance.
2 How?
They consistently employ certain habits—ways of searching for and
processing information and ways of acting on ideas—that help them bridge
the gap between short-term demands and long-term direction.
A
senior manager’s most important role, management theory tells us, is to
chart a long-term, strategic course for a company and keep the company
moving in that direction. But success in this role can elude managers,
since goals are often static while the business environment rarely is.
Each day brings an incessant stream of surprises, new information,
opportunities, and what one CEO called “the chaotic intrusion of
short-term problems.”
As a result, many executives’ daily agendas
are diffuse and reactive, rather than logical extensions of a global,
long-term plan. Indeed, some believe that the daily demands of their
jobs force them to give short shrift to formal planning. A division
president in a communications company, for example, described his
working style this way: “I flitter a lot from one thing to another, but
this business sometimes dictates that. You never get anything done if
you don’t have at least two or three things going on at the same time.”
Failing
to think strategically has a price, of course, as the communications
executive acknowledged: “Sometimes I feel like a rhinoceros who doesn’t
see well and whose power of concentration is terrible; he charges at
something that’s a long way off, then forgets where he’s going and stops
to eat grass.” On the other hand, managers who concern themselves only
with charging at long-term goals may overlook something promising—or
threatening—lurking somewhere in the grass along the way.
The
challenge for senior managers, then, is to maintain both flexibility and
direction. This article describes some of the habits of thinking and
ways of acting that managers use to meet this challenge. While no magic
formula exists for balancing today’s to-do list against the five-year
plan, strategic opportunism can be an effective way to respond to
immediate concerns while setting and pursuing long-term goals.
Habits of Thinking
Few
executives would deny the necessity of strategic planning, but many
fear that a strategic plan can become a straitjacket if followed too
rigidly. Indeed, these managers perceive their strategic course not as a
constraint on their activities but as a general framework within which
they can take advantage of the unexpected. They try to stay receptive to
new information and opportunities—to eventualities not accounted for in
the strategic plan.
Collecting ideas
The
metaphors these executives use to describe what they do suggest the
ways they seek out new ideas. One manager told me that he saw himself as
a beachcomber, examining the spoils of high tide and deciding whether
to pick up a piece of flotsam, leave it, or throw it back—perhaps to
study later, when it washes up again at a different place and time.
Another chief executive likened himself to a frog on a lily pad waiting
for flies to buzz by. He chooses his vantage point carefully so as to
attract the fattest and slowest flies.
In combing the beach or watching for flies, senior managers often
collect ideas whose relationship to strategic goals may appear murky at
first. The idea gathering process is iterative and often indirect, as
one division general manager explained: “You’re looking for ways to get
at problems, so that when the thing hits you, you say, ‘My God! Here’s
one that looks pretty good.’ Sometimes that forces somebody else to make
a little modification, and then you say, ‘I like that one too,’ and
then you grab that one.” The ideas constitute an inventory of
possibilities; ultimately, the manager will adopt some and reject
others.
One way that managers sift through and evaluate new ideas
is through mental simulation or rehearsal. One general manager, for
example, envisioned the consequences of a plan proposed by some of his
staff members to announce a plant closing by calling a special meeting
of the plant’s managers: “In my mind, I take all of my supervisors off
the floor all of a sudden and ask them to come to a meeting. Now,
everybody in the damn factory
sees that,
you know, and wants to know, ‘What’s going on?’ ” This manager’s
anticipatory thinking led him to devise a better plan: speaking with
each supervisor individually. When the closing was announced to the
workers, supervisors could respond fully and knowledgeably to their
questions about the closing and its ramifications.
The ideas
gathered by the manager form one aspect of his or her “mental map”: a
rich, multidimensional set of associations among the myriad tasks,
people, problems, issues, and goals the manager is dealing with at any
one time.
3 This map allows the manager to recognize and
capitalize on new ideas that mesh with existing needs—an opportunity to
generate more staff enthusiasm for a new product idea, say, or gain the
support of community leaders, or recruit a new staff member.
One
division manager, for example, hearing that a skilled, experienced
personnel director would soon be leaving the division, realized that he
could not fill her shoes quickly. He immediately redirected some of her
tasks to other staff members, both in the division and at the corporate
level. His mental map of the personnel director’s role and the strengths
of other staff members had enabled him to use “chance” encounters
during a visit to corporate headquarters to respond smoothly to the
impending departure.
Creating a vision
The
ideas that survive experimentation and testing eventually become
building blocks of the manager’s vision for the company. Much has been
written about how a leader’s vision inspires and motivates workers
throughout an organization. What is just as important, as one senior
executive explained, the vision helps top managers organize their own
thoughts and actions: “All of my actions are pieces of the same pattern.
You can see that plan woven through everything. And so I’m trying to
get the threads to interweave, to make sure that things are following
roughly the same pattern.”
A manager’s vision differs from a
formal strategic plan. A strategic plan lists goals, which are usually
objective, measurable, and time-bound. By contrast, a manager’s vision
of the company’s future direction is often general, qualitative,
difficult to articulate; it might entail such things as becoming the
“best” at a given function, the high-quality producer in an industry, or
a lean, tough competitor.
4
Despite its apparent
fuzziness, the manager’s vision has very practical applications. It
represents a great deal of information about numerous goals, compressed
into a single overriding image that shapes the manager’s day-to-day
responses and guides decision making. A pharmaceutical executive put it
this way: “One rule of thumb that I’ve learned is to know, to the bottom
of my soul, what it is I am trying to accomplish, so I can take
advantage of opportunities when they come along.”
In other words,
managers need not limit themselves to doing only those things that bear
immediately and directly on long-term goals. Instead, guided by the
vision, the manager can shape his or her immediate activities so that
they all point in the same general direction.
Summarizing
Even as managers
create their visions, the business environment is always changing. There
is an adage that says, when you’re up to your ears in alligators, it’s
difficult to remember that your original objective was to drain the
swamp. How then does the manager aiming, say, to create a new corporate
culture achieve this goal when facing such “alligators” as moving the
department into new offices or dealing with the unexpected loss of an
important contract?
The answer is, by climbing up on a hillside
every now and then to take a look around: to assess accomplishments, to
see how much work is left, even to make sure that draining the swamp is
still important. For one CEO, the process works this way: “When a topic
is being discussed, I tend to say, ‘Is this relevant to the bigger
problem we’re talking about?’ And I jot things like that down. Then
someday I sit down, gather my notes from three or four different
meetings, and I go over them and try to extract the things that tell the
story; I look for a coherent pattern. Doing that helps jell my
thinking.” Senior managers often engage in this summarizing
activity—stopping to consolidate what they know and to define areas of
confusion.
Summarizing has several benefits. Most obviously, it
gives executives a way to revise their goals and ideas in light of new
information. And, as in the CEO’s case, it helps them build their mental
map, which helps them interpret ambiguous events and ultimately act on
them. Furthermore, by helping managers organize disparate data into a
small number of “packages,” the summarizing process reduces their
cognitive burden. People can think about only so many things at one
time, and effective managers are adept at “collapsing” the issues they
face into categories. Finally, summarizing safeguards managers against
losing the sense of direction that the vision sustains. Knowing that
they will eventually be consolidating, summarizing, and sorting through
ideas and information, managers can confidently give fuller rein to
their creativity and innovativeness, which might otherwise pull them off
course.
The patterns and categories managers identify when
summarizing help them combine problems for economies of action—that is,
they seize unexpected opportunities to make progress on multiple issues
that they have mentally connected with each other. One manager told me
how he took multiple advantage of a visit to a problematic branch: “My
ostensible purpose was to discuss budgetary concerns, but they were
incidental. I used the opportunity to get into the issue of
interpersonal conflict in the branch. The branch manager brought it up,
and when that happened, I went with it. It might appear that I was
jumping around, but to me it made sense; I was waiting for that window
to open so I could get into what I wanted to discuss.”
Or
consider the daily to-do list. Many managers quite naturally organize
their tasks into mental categories, a practice that helps them remember
the dozens of things they must accomplish each day. Indeed, the very
process of making the to-do list illustrates a mini version of strategic
opportunism: in listing immediate concerns, the manager is thinking
opportunistically, and in relating these concerns to broad categories,
the manager is taking stock and keeping the big picture in mind.
Ways of Acting
One
implication of this opportunistic modus operandi is that managers can
be especially effective when they have overcrowded agendas. Managers
usually carry a little extra work in their mental briefcases, work that
they don’t have to finish right away but that they are ready to deal
with if the opportunity arises—if they recognize the opportunity. Part
of the manager’s mental map consists of these low-priority items:
errands to run, questions to see people about, and so on.
The
efficiency of carrying such crowded briefcases is obvious when two
managers with rich agendas meet. Suppose the vice president of
operations encounters the plant manager in the hallway; the VP learns
how the new production-control specialist is working out, while the
manager gets an informal reading on next month’s production targets.
Each walks away from the chance meeting with several lower priority
tasks accomplished.
These kinds of interactions are
“inexpensive”; the only “cost” to the manager is in keeping things
straight. As one executive commented, “You see someone, but it’s not
necessarily when it’s on your mind, so you have to try to remember all
that stuff.” But remembering things needn’t be left to chance. Indeed,
the habits of thinking that I have described—collecting ideas, creating a
vision, summarizing—help managers remember all the things they have to
do so that they can take advantage of all the chance meetings and
openings that crop up in the course of a day.
Planless by design
It is
impossible for managers to respond to unforeseen circumstances if their
activities are planned too carefully or too far in advance. Recognizing
that their company’s situation is constantly changing, many managers
have learned to leave strategic gaps in their plans—scheduled time-outs
to reassess situations and reformulate actions, goals, or even mission
statements. For the same reason, they often avoid formulating their
long-term goals in excessive detail.
Some less experienced
managers, by contrast, act as if they have to define all their goals
first and next translate those goals into corresponding actions. Then
and only then, they think, are they ready to implement the actions. But
several facts of life undermine this textbook approach to planning. One
is that business conditions change, and a goal that was appropriate just
a few weeks ago may be inappropriate today.
Consider a six-step
plan. Implementation of step one is based on all available current
knowledge, but step six will be based only on earlier information,
earlier assumptions about the future situation, and earlier projections
about the effects of steps one through five.
Even if the business
situation has not changed in the interim, the manager’s perspective
will surely be different. The manager’s views on what goals are
desirable and feasible may evolve; he or she might develop a better
understanding of obstacles or acquire greater skill. As a result,
frequent time-outs that allow executives to pause and reassess are an
important component of managing in a changing environment.
Under
some circumstances, managers may take this principle to an apparent
extreme, taking action before committing themselves to any plan at all.
This course can be a wise one, especially in situations characterized by
high uncertainty.
A manager in a new high-technology industry
decided to forgo any semblance of a formal business plan until he had
some experience with the technology. His refusal to plan was not based
on ignorance; he had assessed the technology and the markets as
promising but thought there were so many unknowns that any multiyear
plan would be an empty academic exercise. Perceiving the early risks as
minor, he decided to enter the business incrementally—taking on one
modest contract that could be handled easily, learning from that
experience, and gradually building the company’s technological knowledge
and business experience until he could formulate sophisticated,
realistic plans.
Several years ago, another company chose a
similar course in adopting personal computers, with which it had no
experience. Rather than conducting an extensive needs analysis, the
company’s CEO simply bought a dozen PCs and distributed them casually
throughout the office. A few staff members received computer training
and began experimenting with potential applications; within weeks, the
computers were fully employed. The CEO’s approach did lead to some
confusion at first, but it gave the company the experience it needed to
take a more systematic approach later in introducing personal computers
in other parts of the operation.
The seeming simplicity of this
deliberate lack of planning is, of course, deceptive. These managers’
decisions were based on a sophisticated understanding of their
businesses and on an equally sophisticated grasp of what they
didn’t
know. It’s one thing for a seasoned manager to say, “We’ll cross that
bridge when we come to it,” and quite another for the novice. The
skilled manager possesses the broad repertoire of analytical and
intuitive skills needed to deal with the unexpected at each step of the
plan—or of the nonplan, as the case may be.
Binding to goals
Many managers
complain that short-term problems wreak havoc with their plans for
tackling the “truly important” management issues. Unfortunately, they
too often blame themselves or their subordinates for poor planning
skills. One reason, however, that urgent issues drive out important ones
is a basic fact of human thinking: salient and vivid objects occupy a
disproportionate amount of our attention and skew our thinking in the
direction of what is noticed, not what is noteworthy.
So how do
managers resolve timely and urgent matters while keeping in mind the
larger issues—the tasks that have no immediate payoff but that in the
long run are vital? To accomplish this, I found, many devise
self-binding systems, tricks that force them to make progress toward
important goals. To cite one simple example, they use tickler files to
ensure that they eventually address issues that might otherwise get lost
in the shuffle.
Another simple binding aid is the planning
schedule. One division general manager, frustrated by his subordinates’
poor planning, created a calendar listing all the division and corporate
meetings that his managers had to prepare for throughout the year. The
calendar represented a “no excuses” philosophy; all the managers knew
well in advance which meetings they had to attend and which ones they
had to provide input for. The same manager used a calendar trick to
force
himself, as well as his executive
committee, to tour the division’s plants one day each month: “If it
weren’t a regularly scheduled meeting, I wouldn’t get off my ass and out
into the plant, and neither would most of the other committee members. I
have to do this to discipline myself.”
In other words, although
executives attempt to retain as much flexibility as they can for
managing the unexpected, they often balance this flexibility with rigid
systems for managing their own limitations. Any mental device they can
use to make the long term more immediate and tangible will help them
focus on the noteworthy. This is why a vision—a vivid and compelling
image of the company’s future—is so important in linking short and
long-range concerns.
Piecing the puzzle
Traditional
theory suggests that management is a tightly structured, systematic,
linear mental activity. Managers presumably formulate goals with
painstaking precision, then undertake carefully prescribed actions. In
reality, however, as one company president pointed out, managers never
have enough information to make perfectly reasoned decisions: “I think
what you find when you get out into the cold, cruel world of business is
that you never have all the information and there’s always a bunch of
facts missing. A manager is always faced with getting pieces of the
puzzle, never really having all of the answers that you need, and yet
being forced to make decisions.”
Therefore managers often begin
the process of problem solving not by rigorously collecting hard data
but by mulling over the incomplete information they already have, either
in their memory or at their fingertips. “I had to make judgments about
things where I didn’t have enough time to learn all the technology
involved,” reported one general manager. “So I had to start relying on
other people’s opinions. I learned that you can reach the point where
you understand 75
% or 80
% fairly quickly; getting to 100
% isn’t worth the effort it takes. I’ve been involved in management long enough to know that there is no certainty.”
Effective
management thus becomes an iterative process based on constant
questioning, experimenting, reflecting, debugging, and retesting. Many
senior managers have learned, for example, that the
order
in which they perform their most important thinking
functions—formulating goals, developing understanding, devising plans,
and taking action—is not that important. What really counts is that all
of these functions are performed, that managers develop an understanding
of the products and the markets, that over time they formulate goals
that are clear enough to guide resource allocation but that they
themselves can change, and that they take appropriate and timely action.
This unrelenting reflection by managers often takes the form of
what cognitive scientists call “reasoning plausibly,” or making logical
guesses. Rather than waiting until they have all the facts, senior
managers try to interpret new issues and problems as they arise. Why
does the potential business partner seem to be turning cold? There’s a
message that the product expediter called—could there be a problem with
delivery or price? Why are product returns up? And, as the president of a
metal parts division wondered, what’s on the boss’s mind? “The boss
called to say he’ll be dropping in tomorrow. I was thinking about why
he’s coming in and what approach he’ll take. I guess he wants to make
cuts; he’ll insist that we have to be more profitable. He wants us to
look good because it’s easier to sell the company when it’s profitable.”
Another example of reasoning plausibly can be seen in the ruminations
of a branch general manager who for eight months could not fill a small
order. The problem: another division of the company had not provided a
necessary part. Said the general manager: “This is aggravating because
we need the business. Here we had an opportunity and we screwed it
up—seven, eight months, and we can’t deliver a part. I believe the
product division has the part. What I think they’re doing is allocating
all of the product to one large customer. I’m going to have to ask the
product manager to skim some from the large order and send me a trickle
of that. Then I can get something to the customer now, and maybe buy a
few more weeks to get the rest of the order out.”
Obviously,
managers who rely exclusively on speculation run the risk of drawing
false conclusions and taking inappropriate actions. But experienced
managers have learned to combine inference with hardnosed rationality.
They are comfortable using hunches and guesses as a foundation for
deciding whether a particular problem requires systematic analysis.
Sinning Bravely
The
development of professional management education early in this century
was an attempt to make managers more systematic, more “scientific.”
Recent criticism of strategic planning suggests that we management
scholars may have overshot this goal. My research indicates that what
managers need is a synthesis of rationality and entrepreneurial (or
opportunistic) resourcefulness. Strategic opportunism is a way of
approaching the complex, uncertain task of management both creatively
and rigorously.
Several writers on management have recently
pointed out what many practitioners have long known—descriptions of
orderly management processes are unrealistic and misleading. Robert
Hayes, for one, has argued that it is often more effective to develop
resources, competencies, and strategies in an incremental, iterative way
than to take the now traditional approach of developing goals, then
strategies, then resources. Other writings on topics as diverse as
product development and transfer pricing have also underscored the
efficacy of taking a nonlinear, dynamic approach to management
functions.
5
Thinking both strategically and
opportunistically is clearly not easy. It requires a tolerance for
ambiguity, intellectual intensity, mental hustle, and a vigilant eye for
new ideas. It requires, in other words, a tough-minded approach to an
inherently messy process, the ability to take action in the midst of
uncertainty, to “sin bravely.”
This approach to managing may at
first anger some managers who struggle hard to think strategically
themselves or harder yet to drive strategic discipline deep into their
own corporate cultures. Yet there is nothing undisciplined or
willy-nilly about strategic opportunism. Quite the opposite: it requires
much intellectual courage to be open to new possibilities and to engage
in reflective inquiry rather than rationalization.
And what
purpose does rigidity serve? Managers who are afraid to choose
opportunity over outmoded objectives are really afraid of themselves;
deep inside they doubt their own ability to function under uncertainty,
their own creativity and resourcefulness, their own resolve and
willpower.
In its inherent disorderliness, strategic opportunism
requires a great deal not only from the senior manager but also from the
manager’s subordinates, who must be able to tolerate working with a
fluid set of agendas. Subordinates with a high need for clarity and
control will find a strategic opportunist’s continual experimentation
frustrating rather than liberating.
Although a manager’s tempest of day-to-day activities may appear
aimless, the direction becomes clear in retrospect—two or three or five
years later. One manager was reminded of an astronaut who was sent out
to make repairs on a spacecraft: “You watch that guy in his space suit,
zooming back and forth on that little space gadget. You see the burst of
energy, but you don’t see a pattern. Afterward, you know, yes, he went
up there and repaired something, but when he’s in motion it’s difficult
to see the logic of what he’s doing. The CEO has a vision that is
semi-intuitive. He proceeds on several fronts simultaneously, pushing
out his holistic vision. Gradually the blurring disappears.”
A
fictional conversation between Dashiell Hammett’s detective, Henry F.
Neill, and his lady friend, Dinah Brand, captures the essence of
strategic opportunism. Henry has sworn to rid a small town of its
corruption, and Dinah has just asked him why he caused a battle between
two rival factions in the town.
“That was only an experiment—just to see what would happen.”
“So
that’s the way you scientific detectives work. My God! For a fat,
middle-aged, hard-boiled, pig-headed guy, you’ve got the vaguest way of
doing things that I ever heard of.”
“Plans are all right
sometimes,” I said, “and sometimes just stirring things up is all
right—if you’re tough enough to survive, and keep your eyes open so
you’ll see what you want when it comes to the top.”
“That ought to be good for another drink.”
6
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