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Managing Strategic Failure
- The So-Called "Practical" Here and Now

By Gary Chicoine

Stafford Beer years and years ago pointed out that every company has a metasystem for handling time:

        

System 5:
The stakeholders of the company, the Past as identity and ownership.
System 4:
The people charged with the Future of the company as in competent strategic planning, appropriate organizational change, training programs, research and development.
System 3:
The executive directors and financial officers charged with managing the present, the here and now, the current bottomline, guarding against waste and inefficiency, while undertaking crisis management and maintaining discipline.

 

  He also pointed out that system Five (5), the stakeholders, all too often are strategically and developmentally brain-dead, which leads to a collapse of system Four (4), the future, into obsession with system Three (3).  System Three (3) then lurches from quarter to quarter mindlessly.  Anything that would improve the company’s strategic position or its organizational performance is considered by the financial guardians to be “wasteful expenses”.

 

  In this deplorable and incompetent state of the company, the constant controls and budget constraints over any and all intelligent people or elements concerned about the future is tantamount to a self-lobotomy on the part of the company where brain cells are treated as if they are fat cells.  In this management atmosphere, no one is allowed to mention the “F-word” (the Future).  In addition, observant managers and planners, aware that this continual stupidity is causing all sorts of strategic errors and organizational problems, often simply throw-up their hands and leave the company to try and become independent consultants or seek employment with more enlightened and creative companies with a real future (if such exist).  The exodus of competence is a company disaster.

 

What then is to be done?

      

Firstly:  System Three (3) executive and financial officers have to realize that they are themselves presiding over a strategic and organizational failure that cannot possibly be corrected by repeated crisis management, further budgetary constraints against the future (cost-cutting) or silencing all complaint from within middle management, whether line or staff.
 
Secondly:   They must resolve at once to give greater encouragement, support and financial investment in the key players and programs that could reconstitute a viable future of the company.  All conservative self-lobotomization of the company must cease forthwith as a long overdue system Three (3) repentance.
 
Thirdly:  Intransigent people among the executive and financial officers should be gently but firmly rooted-out through the force of enlightened discussions with all relevant parties and representatives of the stakeholders of system Five (5).

 

  Without this voluntary self-awakening to the need for investment in the future of the company, the future of the company will demonstrate increasingly insoluble problems.  Strategic and organizational incompetence are inevitably punished by real events in the real world.  The major oil companies, for instance, are showing all the signs of an entire industry without a future due to (A) ignoring the obvious problems of Peak Oil, and (B) under-investing in alternative energy.  So, we will see rising oil prices and profits followed by sudden collapse and bankruptcy of the oil majors coupled with probable Enron-like scandals as senior managers look increasingly to their own selfish financial positions.  One does not have to be a strategic genius to see the obvious trends and dark scenarios emerging at this time.

 

  Things like scenario planning and organizational learning have never been more urgently necessary yet stubbornly neglected than in virtually all contemporary multinational or large companies.  Such a state of affairs can only serve to increase economic downfall and depression, further accelerate unemployment and foster massive corporate scandals.  Without strategic awakening and innovative learning, strategic chaos and shock learning must painfully emerge.

      

 


©2004 Gary Chicoine