Tag Archives: strategy

Framing: a key concept in the management of uncertainty and disruptions

The fog of war, a long 2003 interview of Robert S McNamara, shows that how one frames an issue has an influence on how a question can be solved. As soon as they got engaged in Vietnam, the US presented the conflict as a fight between freedom and communism. This happened in the late fifties, after China had become communist and right after the Korean war, in a context in which the communist world seemed to progress inexorably. The domino theory, introduced by the Republican US president  Eisenhower in 1954, stated that once a country fell and became communist, neighboring countries also would. Hence it became crucial to defend any country facing a communist insurgency. As David Halberstam mentions in his book “The best and the brightest”, the US national context also played a role later in the Vietnam process: Harry Truman, Eisenhower’s Democratic predecessor, was accused during the cold war to have “lost” China in 1949 and to have been weak against the communists, particularly during the Mccarthyst period. A longstanding reputation of “Democratic weakness” persists to this day as a result. In the early 60s, the democrats were still traumatized by these accusations that were systematically used by their Republican adversaries. This is the initial cognitive frame with which the Vietnam question was analyzed by President Kennedy’s administration. Right from the beginning then, the administration was prisoner, without being aware of it, from a frame that was in effect imposed by their adversaries. Despite their doubts and mounting skepticism, they would remain unable, right until the very end, to get rid of it.

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How firms fail to act on a disruption and fall as a result: the case of AT&T in 2005

A central tenet of innovation research is that firms often fail to act on a disruption that threatens their business, and falter as a result. A case in point is AT&T, the 120 year-old subsidiary of Bell Telephone Company, child of Alexander Graham Bell, an American icon.

In 2005, AT&T was sold to SBC Communications. It was in a way a family story, as SBC Communications started in the mid-eighties as the smallest of the seven “baby bells”, the companies created after the regulator ordered the AT&T break-up.  But what a story !

AT&T introduced many innovations, and not small ones:  first commercial radio (1922), first television transmission (1927), first mobile phone (1946 !), first transistor (1947), first telecom satellite (1962).  AT&T has long been a giant of the economic landscape:  one million employees at the beginning of the 80s, and not so long ago a market value of $180 billion (1999).

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Crossing the Hudson to Spit: Moore’s Law, Steam Engines and Genetic Technology

One of the features of our age is the idea that business suffers from a unique level of technological disruption, an attitude that I call  Techno-Egotism.  Businesspeople are told routinely that they operate in an era of “unprecedented” technological change; as a result, they feel very Modern (and rather sorry for themselves).  They also, however, end up lacking perspective, and that can be a strategic liability.

I believe that if posterity registers our age’s Techno-Egotism at all, they will find it rather quaint.  This thought struck me with great force last week as I drove across the George Washington Bridge, from New York to New Jersey, specifically in order to spit legally into a tube, and then mail that tube.

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How to Think like an Intelligence Analyst

To follow up on Philippe’s post about Thinking in Time:  at IE I teach a course called “Geopolitics” to Masters in Advanced Finance students, and “The Multinational Firm and Geostrategy” to Masters in Management students.  Students in those classes sometimes ask me to recommend books to help them “think like an intelligence analyst” and apply intelligence methods to analyzing business decisions.

I provide extensive bibliographies as part of my course syllabi, but often students want me to boil my recommendations down to a few key texts.  Call it a “getting started in intelligence for businesspeople” reading list.

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The use of history for business decision makers: Neustadt and May’s analogs framework

One of the characteristics of a disruption is that one has to deal with a new situation for the first time. Hence, almost by definition, one doesn’t have any prior experience to draw upon, and often no existing framework to use.

Does that mean that radically new situations must be dealt with without referring to the past experience? In their book, “Thinking in time”, Richard E. Neustadt and Ernest R. May think not. They argue that there is always an analog, ie a past situation decision makers can refer to, but on the conditions that the similarities and differences with the present situation be clearly understood.

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The Three Faces of Strategy

In their 2010 article in the MIT Sloan Management Review, “What Every CEO Needs to Know About Nonmarket Strategy”, David Bach and David Bruce Allen contend that sustained competitive advantage arises from engaging with “social, political and environmental issues” as part of corporate strategy.

I completely agree, but would make the case more strongly:  much of what passes for corporate “strategy” is actually tactics.  The same goes for much of the advice dispensed by illustrious “strategy” consulting firms.  “Strategy” sounds more important than “tactics,” so everybody calls whatever they’re talking about strategy, and then moves on to dispensing advice.  But what sounds like a linguistic quibble matters, because the distinction between these words bears directly on building a sustained competitive advantage in business.

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