Strategic decision making: can it be learned from a book?

Citation

Favaro, P. (2005), "Strategic decision making: can it be learned from a book?", Journal of Business Strategy, Vol. 26 No. 1. https://doi.org/10.1108/jbs.2005.28826aae.002

Strategic decision making: can it be learned from a book?

Strategic decision making: can it be learned from a book?

Paul FavaroPaul Favaro is President of Agilis, a firm that advises top management on strategic and organizational issues. Mr Favaro is also an Adjunct Professor of Management and Strategy at the Kellogg School of Management.

Business Strategy: A Guide to Effective Decision MakingJeremy KourdiPublished by W.W. Norton & Company

I am an ardent proponent of the view that the single most substantial and sustainable source of competitive advantage in business is the ability to make consistently better decisions than your competition. The blend of acumen, skills, tools, teamwork and leadership required to accomplish this in any one organization simply cannot be matched in any other, or at least not without much work over a long period of time. Thus, I was taken with the ambitious, if unintended, promise in the title of Jeremy Kourdi’s most recent book, Business Strategy: A Guide to Effective Decision Making.

Kourdi, a business consultant, starts out by citing all of the market and societal forces that are reeking havoc on today’s corporate strategies (rising competitive pressures, the information age, globalization, and so on) to make the point that strategic decision making is urgent, complicated and requires a significant investment of time and resource. He notes, for instance, that such developments as the internet have made the use of information technology more important than ever in strategy.

Recognizing that there is no single approach to strategic decision-making to fit every organization, Kourdi offers a Chinese menu of what he calls “broad truths and techniques” that you can draw on and tailor to your own (presumably urgent and complicated) circumstances. He surveys the landscape of strategic thinkers and innovators, and offers a high-level summary of their best work.

This includes a visit to a veritable pantheon of business innovators, a greatest-hits collection from the likes of Henri Fayol, the founder of classical management theory; Frederick Taylor, he of the time-and-motion studies; Henry Ford, inventor of the assembly line and arguably the modern corporation; Peter Drucker, perhaps the most prolific management thinker and writer of the twentieth century; W. Edwards Deming, founder of the total quality movement; Tom Peters, co-author of In Search of Excellence, which ignited the explosion of business books over the past 20 years; and Henry Mintzberg, one of today’s leading business academicians. All are paraded before the reader to demonstrate the sense that cutting-edge strategic thinking has been and always will be a moving feast, and there is much, much to consider in making strategic choices.

The breadth of frameworks and tools reviewed is truly impressive, from ambitious approaches to managing long-term shareholder value, to nitty-gritty cost management techniques. But there is the sense that depth is sacrificed for breadth. There really isn’t enough discussion on any one approach to decision-making to make much use of it. It mostly provides you with exposure to a range of ideas, which you can then explore further if so inclined. This suggests therefore that the “guide” in the title is more a guide to what is out there, not a guide to how to actually do any of it. That, of course, is not necessarily a bad thing, as long as the reader is aware of this going in.

Curiously, Kourdi steers clear of the major strategy consulting firms in his review of the best frameworks and tools out there. There are no mentions of McKinsey, Boston Consulting Group or Bain in the book, and only fleeting references to second tier firms such as Booz Allen and Mercer Management Consulting. It is hard to believe that they have nothing to say of value regarding the keys to effective strategic decision-making.

By far my favorite chapter in the book is the one on pitfalls. Kourdi does an excellent job of outlining how companies fail at strategy, and what to look for to avoid making the same mistakes. The reader actually comes away with a valuable checklist of no-no’s like “the confirming-evidence trap,” where management seeks information solely to confirm existing biases, rather than to seek the truth. In my twenty years as a strategy consultant, I have seen this all too often in client organizations.

Another of the valuable features that Kourdi provides is a list of questions at the end of each chapter that the reader should consider to determine how to move forward with improving strategic decision-making. “Do managers in the organization favor one or more styles of decision-making?” That is a terrific question to ask before embarking on a strategy development effort in any company. It rarely is, and companies are often left to struggle with plugging square frameworks into their round organizations.

One thing I would have liked to see Kourdi comment on, because I believe it is so central to the effectiveness of strategic decision-making, is, well, what’s the point? That is, what are you trying to accomplish with all your effective strategic decision-making? Grow market share? Grow profits? Become more global? Maximize shareholder value? Without alignment within the organization on what this single driving objective of your strategy is, even the best strategy development efforts are doomed to failure.

In a sense, Kourdi’s approach to decision making is embodied in his opening sentence in the introduction to this book: “Strategic decisions are rarely straightforward or simple.” While there is clearly something to this notion, it unfortunately can be – and often is – used as an excuse to make strategic decisions also rarely swift or well understood. Yet, today more than ever, competitive advantage goes to those companies that can make not only better decisions but faster decisions. One of the most common mutterings I hear in executive hallways these days is: “It’s better to be mostly right and fast than exactly right and slow.”

As long as the reader strives to find balance between rigor and nimbleness in their strategic management processes, Jeremy Kourdi provides an excellent guide through the maze of frameworks and tools waiting to assist any company in need of a better strategy.