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Friday, June 15, 2012

The Tactics of Strategic Opportunism

Harvard Business Review

The Tactics of Strategic Opportunism

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.


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
1. The term “strategic opportunism” was first used in a different context by Barbara Hayes-Roth in “A Blackboard Model of Control,” Heuristic Programming Project, Report HPP–83–38, 1983, (Stanford, Calif.: Stanford University, 1983).
2. See my articles, “Thinking and Managing: A Verbal protocol Analysis of Managerial Problem Solving,” Academy of Management Journal, December 1986, p. 775, and “How Senior Managers Think,” HBR November–December 1984, p. 80.
3. See Sigfried Streufert and Robert Swezey, Complexity, Managers, and Organizations (New York: Academic Press, 1986).
4. See James Brian Quinn, “Strategic Goals: Process and Politics,” Sloan Management Review, Fall 1977, p. 21.
5. See Robert H. Hayes, “Strategic Planning—Forward in Reverse?” HBR November–December 1985, p. 111; Hirotaka Takeuchi and Ikujiro Nonaka, “The New New Product Development Game,” HBR January–February 1986, p. 137; Amar Bhide, “Hustle as Strategy,” HBR September–October 1986, p. 59; and Robert G. Eccles, The Transfer Pricing Problem: A Theory for Practice (Lexington, Mass.: Lexington Books, 1985).
6. Dashiell Hammett, Red Harvest (New York: Alfred A. Knopf, 1929), p. 79.

Mr. Isenberg is assistant professor of business administration at the Harvard Business School, where he teaches courses on organizational behavior, power and influence, and managing organizational effectiveness. This is his second article for HBR, the first being “How Senior Managers Think” (November–December 1984).

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