"Strategy is a framework for decision-making - a guide to thoughtful, purposive action!"

Stephen Bungay has been a management consultant with The Boston Consulting Group (BCG) from 1981-1999 before becoming a Director at The Hult Ashridge Business School in the UK. Fascinated by military history and receiving his doctorate from research on German philosopher Hegel (1770-1831), he particularly studied the Prussian military strategists. The posthumously published work of General Philipp Gottlieb von Clausewitz (1780-1831) called “Vom Kriege” (On War), and of Field Marshal Helmuth von Moltke (1800-1891), especially on the so-called ”Auftragstaktik” (Mission Command) became central to his own strategy studies. As Bungay points out in the preface of his book “The Art of Action”: “The threads came together: military history, strategy and tactics, German culture, the nature of organizations, and leadership” (SB, p.xiv).

Bungay opens his book by explaining the common challenge in many (larger) organizations. As an intuitive reflex to operating in often volatile, uncertain, complex, and ambiguous (VUCA) environments, “the organization grows complex as well” (SB, p.12). Managers search for additional information, do more analysis, create tedious plans and tell people precisely what to do and how to do it. A vicious circle of command and control, of self-fulfilling and robotic Taylorism is initiated. As a result, most organizations reward compliance rather than initiative or creativity, leading to passivity and fear (SB, p.10-17). MIT Professor Douglas McGregor challenged in his seminal publication “The Human Side of Enterprise” this predominant view (“Theory X”). Instead, McGregor proposes an organizational set-up based on strategic intent and direction, motivation and self-control, calling it “Theory Y” (DMM). Based on this understanding, Bungay defines three principles: “1. Decide what really matters, 2. Get the message across, and 3. Give people space and support” (SB, p.21).  

Prussian leader von Clausewitz addresses the “concept of friction” – the totality of “uncertainties, errors, accidents, technical difficulties, the unforeseen and their effect on decisions, morale and actions” (SB, p.29) as an inherent element of any military context. Therefore, according to von Clausewitz, an effective military strategy must address the unknown and uncharted by providing a system of strategic options. Leadership accomplishes its strategy by utilizing directions and stating intentions rather than detailed orders. This deliberately includes deviations from the original plan, provided the overall mission will be achieved.

Likewise in business, “we are operating in a nonlinear, semi-chaotic environment in which our endeavors will collide and possibly clash with the actions of other independent wills”, e.g., customers, suppliers, competitors, etc. (SB, p.53). “Partial information, imperfectly processed by people under stress” (SB, p.34) and other external factors lead to “organizational friction”, causing significant inefficiencies. And friction gives rise to three major gaps: the knowledge gap, the alignment gap, and the effects gap (SB, p.53).

The knowledge gap describes the difference between what an organization would like to know and what the organization does know. Factual uncertainties produce psychological uncertainties. And in the pursuit of preventing subsequent deviations of the outcomes vs. the plans, organizations tend to fall into a trap of seeking even more (distracting) data and information. The important distinction of strategy and plan gets diluted, sometimes entirely dissolved. However, “the key is not to plan the whole journey but to set direction and allow the organization to navigate” (SB, p.86). Therefore, according to Bungay, an organization should not command more than necessary or plan beyond any foreseeable circumstances (SB, p.64). And “limit direction to defining and communicating the intent” (SB, p.86).  

The difference between what the organization would want from its members (plan) and what they do (actions) is called the alignment gap. That gap “is often indicated by top-level frustration and lower-level confusion” (SB, p.47). As a result, more detailed instructions are given, like Standard Operating Procedures (SOP) “in painful detail” causing proliferating blind activism. Instead, the organizational leadership should “communicate to every unit as much of the higher intent as is necessary to achieve the purpose” (SB, p.64). Bungay suggests a cascading briefing and back-briefing process (SB, p.171-175) allowing each level to define how they will achieve the intent of the next level. To close the gap, the organization needs to move away from a rigid “plan – implement” model and become a much more flexible “do – adopt” organization of applied learning by doing (SB, p.175).

Thirdly, the effects gap relates to the difference between the intended effects of the organizational actions and the real outcome. In response, many organizations increase the level of control, typically by adding metrics and additional reporting. The potential threat – chronic micromanagement – limits the independent thinking of the organization. “Commitment is replaced by compliance, energy is sapped, and morale declines” (SB, p.49). Bungay acknowledges the value of metrics and scorecards, however only “to support strategy execution by monitoring the effects actions are realizing, not to supplant strategy” (SB, p.215). Thus, he advocates for “radical delegation” (AA) and the freedom of decision and action within boundaries. “Experience suggests that managers who have the courage to let go are often surprised by just how much their subordinates are capable of achieving when given good direction. It exploits and develops human potential” (SB, p.191).

In the final chapter of the book: “Leadership that works – from common sense to common practice”, Bungay defines three necessary elements, called the “Executive’s Trinity”, for success:

·       Directing (intellectual, conceptual): developing strategy, giving direction and building the organization

·       Managing (physical, technical): resourcing, organizing and controlling

·       Leading (emotional, human): tasking teams and individuals

If balanced right, this leadership model provides purpose and understanding, capabilities and skills, motivation and commitment.

The focal point of Bungay’s Prussian reflections is the relationship between autonomy and alignment. An effective and performing organization requires both: the art of (independent) action, but in concordance (AA).  As von Moltke states quite simply: the more alignment (Intent: what and why) you have, the more autonomy (Actions: how) you can grant. “The one enables the other” (SB, p.65).

References:

Agger, Ask (AA): Leadership between Alignment and Autonomy, www.workzchange.com, 17.12.2018

Bungay, Stephen (SB): The Art of Action, London/Boston 2011

McGregor, Douglas M. (DMM): The Human Side of Enterprise, 25th anniversary print, Boston 1985