The spiritual war between management and strategy

A running theme of this newsletter, and the “strategy industry” in general, is the continued inability for individuals and organisations to “get it”.

Why is it so hard?

What is the blocker that makes a fundamental business discipline (perhaps THE fundamental discipline), so bloody difficult to grasp?  Why does nobody know what it is?  Why does everyone struggle with it?

Well, there are many reasons of course, a lot of which I’ve written about – but today I wanted to talk about perhaps the deepest and most foundational cause of this disconnect:

That strategy and business management are philosophically opposed.

This is very very different from the way people normally think about this relationship.

Most people consider strategy to be a subset of business management.  A skill within it.  For example when you study for an MBA, you will learn a lot about strategy as part of that skillset.  And of course we see strategy as something that business managers do routinely.

But what I’m saying is that they are actually opposite things.  They are incompatible, and skill in one area necessarily means weakness in the other.

Therefore, because the entire business world (and indeed most of the world in general) is trained in managerialist thinking, they are also by definition “bad at strategy”.  It’s inescapable.

I’m now going to explain why this is.

This won’t be an especially “practical” piece, but I do think it’s interesting, so if you’re curious buckle up, and let’s go.

The first thing we need to understand in order to recognise the problem is the nature of “managerialism”.  We tend to think of “management” as a task or a job, but it is in fact a philosophy, and indeed it is the dominant philosophy on the planet today.

Management is a discipline that emerged when human beings started to do things at scale.  “Mass” things, like big factories, networks, organisations, state bureaucracies etc. that needed to be “managed”.  Before the industrial revolution we didn’t really do stuff like this, and therefore since there was “nothing to manage”, there was no “management”.  The skill only emerged when we developed big, complex, machine-like systems that needed it.

All pretty straight-forward.

But what wasn’t so straightforward was the way that this new way of doing things changed the values of society.

Before the advent of management, the values of elite society (e.g. the aristocracy etc.) were very different.  They validated their position at the top of the hierarchy through ideals such as courage, good taste, learnedness, virtue, and other forms of “derring-do”.  As a result these sort of “soft” or “romantic” ideals were the central ideals of society as a whole.

Management however has an entirely different set of values: things like efficiency, rigour, results, and “intelligence”.  This last one is particularly interesting, because what today we colloquially refer to as “intelligence” generally means “the ability to understand and manipulate complex systems” – i.e. managerial capability, a skill which was pretty much useless for most of human history, but which is now essential.

Now, because management was in control of the things operating “at scale”, it quickly became the most powerful force in society, displacing the old world of the aristocracy at the top of the totem pole.

Out with the Lords, in with the bureaucrats.

This then shifted society’s values as a whole (because it is the powerful who of course define the values), culminating in the world we live in today, where managerial values are the values:

  • Hyper rationalistic
  • Results driven
  • Efficiency focused
  • Meritocratic (defined as managerial merit of course)
  • Scientific
  • “Intelligence” is the ultimate virtue
  • Etc.

The key thing to recognise here is that these values are not universal, nor intrinsically human in any way – even though they feel that way to us today, and probably come across as merely “common sense”.

No, most people throughout history wouldn’t have recognised them at all.  

They are simply the necessary operating values of the people who happen to have been the most powerful in the past couple of hundred years.

(And note, this is not a critique – it is indeed true that without these values at the helm modern society would collapse, as they hold up the whole edifice of finance, infrastructure, transport, governance, military, etc.)

With me so far?

OK now let’s zoom back in to the level of business.

Any business with any degree of size or complexity is something that requires management.  Thus it is run by people who are “good at management”.  And it employs people who are good at management too – of which there are no shortage, since our entire education system has been overhauled to inculcate managerial values.

That’s all fine, except this:

Strategic values are the opposite of managerial ones.

You cannot – I repeat cannot – use managerial technique to arrive at meaningful strategy.  On a micro, day-to-day level you can do it a bit, yes, which is why most businesses only engage in what we might call micro-strategy.

But on a big picture scale, you cannot.  Indeed you must cut against sacred managerial values if you are to make any progress.

Consider these dichotomies:

  1. Management values certainty, strategy values uncertainty.  The entire point of the scientistic management system is control; to grasp all the parts of something and manipulate them to your will with provable certainty.  This works when running a factory say, but it doesn’t work when plotting a course through the market, which is inherently unpredictable.  As I’ve often said, great strategies are always unprovable punts – and management doesn’t do “punts”, it does “solutions”, which strategy cannot offer.
  2. Management values linear thinking, strategy values non-linear thinking.  Management in all areas of society exercises control by developing “process”, whereby you follow steps 1, 2, and 3 to get results A, B, and C.  The one thing that is multiplying everywhere and always in our society is processes, and of course managers to manage them.  However strategy can’t be arrived at by process, because the entire purpose is to arrive at a result which is unpredictable, and which others won’t.  How can a discipline that values predictability effectively generate unpredictable outcomes?  It makes no sense.
  3. Management values precision, strategy values generalist sweeps.  It’s very telling that “to generalise” has become a form of sin in today’s world.  The reason for this of course it that it’s a sin to the managerial priesthood, who value accuracy above all else, and who won’t allow for the impurities of contradiction in their thinking.  But generalisation is literally how we generate “big picture” understanding.  We aren’t gods, we cannot perceive the big picture via detail, we can only do it in sweeping brush strokes.  Thus the strategic process must, to some extent, disdain precision, otherwise it would get nowhere.

And finally, perhaps more controversially, I believe that strategy is necessarily romantic.  It actually has a lot more in common with the aristocratic values of yesteryear than it does with the management values of today, because it is not wholly utilitarian.  It has an artistic and adventurous quality.  It must do, because its job is to motivate people, and that’s what people like.  There must be fire and passion and mischief in the mix – things which are seen as enemies to efficiency and truth in the managerialist view.

To prove the point, look at the utter managerial ineptitude of the two ultimate rock star strategists of the past 50 years: Steve Jobs and Elon Musk.

(Yes, I know I mention them all the time, but they make explanations like this easy because everyone knows who they are so we can just dive right in).

Jobs’ entire USP was to blend the romantic worlds of the liberal arts and spiritually with technology: a combo that gave birth to the most valuable company of all time.  In an industry populated by hyper-rationalistic boffins, he was the very opposite – living in an ashram, walking around barefoot, prizing beauty above reason, giving everyone at his funeral a copy of Autobiography of a Yogi etc. etc.

Perhaps more importantly, he was a famously terrible manager.  He was, and remains, a “villain” to the managerial worldview.  A tyrannical boss, fond of highly impractical ill-conceived gut decisions delivered with a dictatorial fist.  He was not fit for this world, and yet he managed to squeeze through as a peculiar outlier (and with outlying results).

And speaking of villains, what about Musk?  Also a tyrannical boss.  Also a management anathema, guided seemingly only by what he thinks is “cool”, and an enduring obsession with the sci-fi books he read when he was a boy.

And yet what people often fail to grasp is that it is the heretical parts of these figures’ nature which gave them strategic power, not weakness.

Just “doing something cool”, for instance, sounds to many ears like the opposite of strategy, which should be well-reasoned, evidenced, thought through, etc.  And of course yes, that stuff is part of it.  But what they miss is that the word “cool” is not an empty concept.  There is an extreme richness of content and meaning in that idea, much of which has strategic power if you respect it.

You might think that doing something “cool” means you can do just about anything, but on the contrary the window for what passes as “cool” is actually extremely narrow, and is arguably a higher standard that mere “rational sense”.

Basically if someone describes your strategy as “cool” that is a far better sign than if they describe it as “sensible”.

(NB I am not proposing that “cool” is a good substitute for strategic thinking, nor am I proposing that everything that Musk thinks is “cool” is strategically valid – all I’m saying is that this debate is a good example of how strategic values conflict with managerial ones)

Do you see the problem then?

Managers – which is to say most people with power and thus strategic responsibility – must be able to detach themselves from their day-to-day values if they really want to do something great, plough a new furrow, and lead people.

Either that, or they must find a place for the “managerially inept” in their business dealings if they are to capture the full value of strategy.

Being candid, I suppose I would put myself in that camp.  As you may know I was kicked out of both EY and L’Oréal early in my career, for reasons which I suppose you could call “incompatible values” (no exciting tales of gross misconduct or anything like that, alas – it just wasn’t a good fit).  I’m not remotely saying they were wrong to do so – not at all – I’m simply pointing out that this glaring ineptitude on my part hasn’t prevented me from providing some kind of value to similar businesses further down the line.

The question simply is: can you recognise that value?

Can you see past the “universal” values of managerialism to an alternative form of value that also has its place?  Can you blend the two?

The answer for most businesses is that they can’t.  They can’t escape the water they are swimming in.  They can’t comprehend that a speculative, generalising, unstructured, romantic discipline can have “hard value” beyond the highly limited confines of stuff like advertising where it’s still (somewhat) allowed a role.

There is a spiritual war taking place, although few of us can see it.

And the victors will be those that can call a truce.

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