Readings of the Week:

Mintzberg – Rise and fall of strategic planning

Wilson & Howcroft – Power politics IS evaluation

Walsham – Chapter 8

Questions & Comments:

Mintzberg paper:

Mintzberg’s concern with strategic planning is a valid one but I feel he hasn’t offered any alternative solutions. Would the group agree that formal planning is still completely necessary in organisations, even if the understanding and implementing of it is, as Mintzberg argues, not very well executed?

The conventional organisational strategic thinking as well as planning is heavily influenced by the old military strategy treatises with emphasis on military style of control and directions coming from the top. Mintzberg attacks this mind-set and sees strategy as consequential effect of the trials & errors from the activities and experiences of the middle management (Fallacy of Detachment). And this does make sense with shift to new economy breaking older norms and conventions. But the ground reality is that most of the CEOs are still convinced that strategy can only be a top down affair and only grudgingly relax the tight controls put around strategy formulation. In most cases CEO and an elite cadre sitting in boardrooms are responsible for devising strategy for the whole organisation at the exclusion of others. In fact collaborative environments are considered as a move towards chaos and resented in strategy formulation. Why is it that even in innovative companies like Google & Facebook strategy is still formulated in the company boardrooms by a select few rather than within the office corridors with full participation of middle and lower management?

Walsham paper:

In Walsham [ch 8] I think there clearly was merit to a lot of what Brown did, when in charge of Sky. His overall business approach of more autonomy for branches, while harvesting data centrally and maintaining a lot of control centrally is a plan which is very common in such institutions these days. When he was evaluating IS systems, the chapter says that he suppressed stakeholder conflict, and dominated evaluation proceedings. I think there is no harm at all in allowing some conflict among some stakeholders when making large IS decisions, and doing evaluations. The caveat to this, is that remains true as long as there exists clear exit criteria, and indeed the conflict is not allowed spin out of control. I think in this instance Brown went too far in suppressing all conflict and ensuring his way was the only way. I also think a lot of people would naturally take up a position where all conflict is bad. But my working life tells me that when two [or more] people or teams are really passionate about something [even when they have conflicting positions], the synergy from ensuring those passions work with each other and not against each other generally gives the process and project a far better end result.

Wilson & Howcroft paper:

Melanie Wilson, Debra Howcroft article discusses the requirement to attain stabilisation in various IS implementation stages. Using the Zenith Nursing Information System case study, Wilson and Debra explains how evaluation can be used in attaining stabilisation. Evaluations are important resources for supporters of an information system to enrol new users and consolidate support from those already enrolled. Varying concerns of the different relevant social groups (RSGs) are attended to in a specific manner by the supporters of the system in such a way that the technology is constructed as an ‘answer’ to their problem. Systems evaluation is consistent with the conceptualisation of systems design and implementation, as a process of social contention and political, as well as technical and determination. Technology can stabilise in circumstances where relevant social groups see their problems as having been solved by the technology. How can we interpret this as the problems and solutions associated with a technology present themselves differently to different groups of people.

IS evaluation is always a political process and is subjective to the power dynamics within the dynamics. The IS system is never objectively evaluated but is always reviewed through different lenses by groups within an organisation. And furthermore evaluations are done by senior management with some representation from user groups but in all likelihood most of these evaluators won’t be the end users of the system. I’ve been part of evaluation process of a number of core banking solutions at Tier 1 banks across Europe and in my view the enrolment of new user groups is never easy or smooth. It is always fraught with thorny issues of shoddy planning, ineffective quality measurements, lack of training, fear of unknown & other communication challenges. A typical example was AIB’s implementation of next generation banking platform from Oracle of which I’ve first hand insight as I was representing Oracle. The product was chosen after a year long evaluation and almost 2 million euros were spent on the evaluation itself which consisted of number of product demo sessions by Oracle teams and multiple visits from AIB’s seniors to Oracle facilities at Mumbai & Bangalore. But the very first enrolment session held after the product procurement at AIB Bankcentre was a disaster for both the bank and supplier. This was the first session where end users were given a demo of the Core Banking product. Within 5 minutes of demo session start, there were murmurs of front-end being ‘ugly’ and resentment on the ‘Indian accent’ of the Oracle representative giving the demo. The resentment within user groups could not be managed during subsequent phases and the whole implementation was a failure. It resulted in a court suite which was settled out of court at the cost of 20 million to Oracle and significant cost to AIB also. AIB divisional politics and power of mainframe group within AIB was one of critical factors in failure as with new platform this group was afraid of losing control. It resulted in significant monetary loss as well as loss to the bank of next generation banking platform. Why is it that the end users are not provided proper representation during any new IS system implementation? Is it the power politics or is it that in general the right emphasis is missing within organisations on the Human–Computer Interaction (HCI) to validate usability considerations during evaluation processes which then leads to failure in enrolment and finally project failures.

Minutes of the Class:

Despite the year in which the Mintzberg article was written it remains remarkably current. It is not the date that matters but the issues they raise and how those issues are raised.

Strategy:

Mintzberg – What’s he trying to do? What’s his main point? What’s his target?

Strategy and evaluation are intimately connected. Strategic planning can be locked up in an Ivory tower which isolates it from stakeholders which have an everyday involvement in that which is affected by said strategic planning. Strategy and the process by which it is produced. What does he mean by strategic planning and strategic thinking? Why the distinction?

The strategic planning movement:

David Nights draws on Foucault to look at the genealogy of strategy and how the term strategy has come into common business parlance. Up to the 1930s there was a sense that the invisible hand of the market held sway. A lot of the language around the development of management as a discipline originated in business schools which started in early 20th century.

The professionalization of management happened at the start of 20th century. The scale and scope of organisations were growing. Globalisation started to become a reality. Organisations became so big that owners/managers could no longer manage them. This resulted in the hiring of a professional class of manager. Previous to this the owner/manager didn’t have to justify decisions to anyone. Key issues following this development were trust, and a loss of control.

The idea developed that a body of knowledge began which grew around management could be learnt. In the infancy of a new school of any discipline a new language develops. When justifying decisions to the owner there was a particular vocabulary/language developed and used. Business schools services were started to service the need for professional managers. This class of professional managers had to have a particular type of knowledge that not everybody had access to. When you train as a manager there is a certain way of seeing things and reacting to things. Strategy is very central to what being a manager is about.

Strategic planning has its origins in WW2 and was developed further during the 1960’s. This period is often referred to as the systems rationalism period of management. It was heavily influenced by the development of management techniques which were influential in shaping the 2nd world war. Mintzberg criticises is the development of the Strategic planning function in organisations and how it was originally conceived. He is mindful of the fact that strategic planning is a product of this way of thinking – a very formal rational approach to how one manages an organisation.

A key feature of this form of strategic planning criticised by Mintzberg is the separation of thinking and doing or the separation of planning from implementation. Strategic planning in organisations in the 1960’s departments recruited the brightest and the best. These people would analyse data, look at the analysis, try and understand the environment and produce strategic plans on that basis. These strategies would produces in a separate department and passed on to the doers for implementation. Often, the strategy process retains some of the aspects of this approach. Mintzberg is wary of this approach and its possible shortcomings.

Mintzberg notes that this is not what strategic thinking should be about. He says that this model of strategic planning is very far from strategic thinking. He assumes that strategic planning can often spoil strategic thinking by causing managers to confuse real vision with the manipulation of numbers.

Mintzberg talks about 3 specific problems/fallacies which occur in strategic planning:

1.) The Fallacy of Prediction – This rational betrays the notion that if we understand the world mathematically and analyse data in line with that understanding we will be able to predict how things will go in a particular market. Mintzberg thinks that this is fallacy. It’s a very deterministic view.

2.) Fallacy of Detachment – This objectification of the planning process and not involving the the organisation. The problem with this is that the context of each company varies. Mintzberg’s argument is that understanding comes through engagement with that context over an extended period of time. Number crunchers who have never been involved with the business coming up with the best way of doing things is a fallacy. In order to have a feel for how things are going you need engagement with the business and the environment over an extended period of time. Mintzberg says you’re always very limited if you’re not someone who understands the business and the context. If understanding context comes through engagement (and there are different kinds of engagement) how do we tap into this knowledge that resides around the firm? The answer lies in different types of engagement with different aspects of the business.

3.) Fallacy of formalisation – Dreyfuss argues that human expertise at its best can never be codified/formalised into a set of rules. The concept that a set of rules that are distributed to the doers to be carried out is very problematic in practice. There will always be exceptions. They will catch you out.

Karl Weik writes about high reliability orgs, e.g. Nuclear power plants or aircraft carriers. These are places which are safety critical and very small deviations from the norm can result in huge consequences. In organisations like this there is strict protocol implemented. When there is a major accident/disaster (e.g. 3 Mile Island), where happenings conspire to render the protocols useless, a severe audit occurs. This severe audit is a conspiring of circumstances which exceed the capacity of the protocols to deal with them.

Where there have been near misses it has been shown that disaster has been averted by human experts using an intuitive feel for what’s going on, overriding these protocols and doing something strange or out of the ordinary contrary to the guidance of the protocols in place. It has been suggested that to avoid disasters of this nature, a culture of constant alertness should be cultivated. This is referred to a collective mindfulness. People are in constant discourse about what’s going on around them. If you want to avoid these disasters you need more than the protocol.

Hubert Dreyfuss argues that human expertise at its best cannot be codified, that to go beyond a certain level you have to use an educated intuition. A key aspect of Dreyfus’ outlook is that there is no learning where you can’t make mistakes. If no mistakes can be made it is impossible learn. However there must be a distinction between bad mistakes and good mistakes.

Mintzberg suggests that strategic planning and analysis should support strategic thinking as opposed to providing answers by themselves. Though it should be remembered that it is calculative analysis and they cannot replace strategic thinking. Mintzbergs critique of strategic planning is that it is analysis done without feeling for context.

Despite that, strategy is still formed in boardrooms isolated from other stakeholders. Mintzberg’s critique of this phenomenon applies very well to Big Data and Predictive Analytics. It has huge parallels with strategic planning. It could be argued that we are moving further away from strategic thinking, and further towards strategic planning without context. It is suggested that some insights can be captured by algorithms without any human input. However, as the questions of these algorithms grow more complex the results grow less reliable. Rather than seeing the data as telling us what to do, the key thing may be to use this data to provoke conversation and challenge assumptions. Analytics could be very helpful in providing questions, rather than providing answers.

Mintzberg says we should abandon strategy formulation. Strategies are formed over time by accident and chance events. “Strategic formation walks on two feet, one deliberate, the other emergent.” Mintzberg talks about management as improvisation. Strategy is about responding to things on an on-going basis.

A strategic management process will often produce a document. The document may be perceived as important to some. The learning gained by people involved in the process is more valuable than the actual report. The document shouldn’t be confused with what the process produces.

Mintzberg says the most successful strategies are visions not plans. People buy into visions. A vision orients you to your environment. The alignment of different aspects of orgs is an ongoing accomplishment. A Constant realignment and choreography.

Evaluation:

Strategy is an on-going process – partly delivered and partly emergent – constantly in formation. If we see strategy as an on-going learning process then feedback from evaluation is important.

What did we learn about evaluation? We can’t get away from interpretive design and bias. An objective evaluation is impossible. Evaluation is a measured process. Statistics and metrics are important to evaluation because they are quantifiable/measurable. Quantification is important and lends credibility to the process.

If someone wants to produce a successful report they will often concentrate on what was successful and steer clear of the failures. Measurements, statistics and where it was successful are likely to be emphasised. Methodology is often emphasised and evaluations are generally written in a passive voice. This is so people can understand the process and observe what was considered (and not considered) with ease.

The first issue of evaluation is that it is all necessarily political and it cannot be objective. Value is a central feature of evaluation. It is a valuing exercise. It depends on what is valued and how you value it. Evaluation is, by its nature, tied to values. A key thing in any evaluation report is to get beyond the pseudo objectivity. There is a sense that there are scientific processes that can produce these objective reports but all observers are always looking at something from a certain perspective.

Foucault says we can never step out of discourse. We are always constituted by the way we look at things. In other words discourses are crucial. Common discourses that tend to be important in evaluation are cost, efficiency etc.

Evaluation is always about taking a perspective (which renders objectivity impossible). We should always be cautious about being taken in by this faux objectivity. We should always look for the underlying, covert assumptions.

Evaluation removes variables…to a certain extent. There is something about us that craves evaluation. It is the sense of security that it offers. Experts offer an opinion as to which option might be is best. It provides comfort. We like to disambiguate things. We should be sensitive to the dangers of this way of thinking. For instance university league tables are changing the way universities are run. Universities are changing to move up the league tables sometimes to the detriment of the quality of education received.

The literature on evaluation is marginal. Most of the literature is about refining techniques and producing objective evaluations (which is impossible). Instead of focusing on the outcome of the evaluations, one should focus on the process and the politics of that process. You will always see the overt but we concentrate too much on the overt and need to search out the covert.

Evaluating reports from authoritative institutions is a ritual. A report can validate a decision but may be pure fiction. Rituals comfort people. Rituals make fear and uncertainty less prominent. Social ritual calms anxiety and alleviates fear. An important aspect of evaluation is learning and change but this function is often subverted to other functions like the political function of using it to legitimise something.

The readings try to draw out the political nature of organisational management. Often there is a veil of rationality and that there are much more important things going on in the background. This undermines the ostensive rational workings of the organisation.