“Strategy Safari” Deep Dive: Do You Cultivate Your Strategies Like Tomatoes?

We hear a lot about “learning organizations”. We accept without hesitation that continuous learning is a culprit of success and, perhaps, the only guaranteed stability in the ever-changing world around us.

But when it comes to strategy – what does learning mean exactly?

• Is it learning from past mistakes?
  Or deliberately committing new ones to test new ideas?
  
  
• Is it learning from experience we’ve gained to date?
  Or engaging into new experiences to learn from them?
  
  
• Is it learning to overcome market threats and seize opportunities using our strengths?
  Or is it to discover our strengths in action?

Let’s take a closer look at the learning school of strategy formation.

Ultimate Learning Case Study: Honda Edition

Unlike the previous schools we have studied so far (save for the cognitive school), the learning school describes best how strategies actually form within the organizations.

Not how [strategies are] formulated, but how they form.”

The difference is huge.

Up to this point, most of the schools we looked into (especially the first three) were very convincing about how to formulate a decent strategy. It almost felt like a no-brainer that to come up with a good strategy, all you needed was to put your CEO (or a group of planners) into an office, provide them with a thorough market analysis, and let them elaborate a good plan.

Or, in the case of Michael Porter’s positioning school, invite a competent consulting firm to do your market analysis for you and determine which of the “plug-and-play” strategic positions you should take: cost leadership, diversification, or narrow market focus.

In fact, the positioning school ideas were so prevalent in the 1970-80s that when the British Government hired BCG (Boston Consulting Group) to explain how Honda was able to push the UK out of the American motorcycle market, the BCG reported that it was in fact due to Honda’s “careful attention” to “growth and market share”.

Yet Honda’s entrance and overwhelming success in the US motorcycle market is the best illustration of the learning school approach.

And you are about to see why.

In truth, we had no strategy other than the idea of seeing if we could sell something in the United States.”

When Honda Motor Company sent its sales managers to the US in 1959, 15 years before the BCG “report”, there was no market for motorcycles as “regular commuter transportation” at all. In fact, its founder and president Soichiro Honda, initially considered introducing larger bikes (250cc and 305cc models) but they began to break quickly because American customers at the time (“black leather jacket types”) drove them longer and faster than their Japanese peers.

Honda managers were short on money.

They rented a cheap apartment in LA where two of them slept on the floor. In their warehouse, they staked bikes by hand and swept the floors themselves. (Compare this, for a moment, to the glorified planners from the 1980s sitting in their corner offices elaborating on their very important plans).

They used the Honda 50s – smaller bikes without macho appeal – to drive around.

Those bikes attracted lots of attention and – coupled with the constant breaking of the larger models – gave way to an unexpected opportunity – a completely new market ready to be found.

A new strategy had emerged.

The sales director convinced his more senior Honda colleagues to accept this new emergent strategy and the rest is history.

So Weeds or Tomatoes?

Deliberate strategy focuses on control – making sure that managerial intentions are realized in action – while emergent strategy emphasizes learning – coming to understand through the taking of actions what those intentions should be in the first place.”

And

The concept of emergent strategy… opens the door to strategic learning, because it acknowledges the organization’s capacity to experiment.”

Henry Mintzberg, in his unique, rich-on-metaphor style, compares emergent strategies (like the Honda one we saw above) to the weeds that show up in the garden unexpectedly and might or might not be found useful in the future.

This weeds metaphor is coming up as opposed to the “tomato-like” strategies cultivated in a hothouse under the vigilant eye of a CEO and/or his planners. These strategies are presented to the general public in their formal, fully developed format, just as ripe tomatoes are “picked and sent to the market.”

The process of strategy formation can be overmanaged; sometimes it is more important to let patterns emerge than to force an artificial consistency upon an organization prematurely. The hothouse, if needed, can come later.”

A A very important, yet not-so-obvious conclusion that we can draw when acknowledging the emerging strategies is that we actually cannot always control strategy formation.

Organizations cannot always plan where their strategies will emerge, let alone plan the strategies themselves.”

From an analytical scientist developing a rapid assay to a sales representative signing up a high-profile client to a receptionist stacking science magazines on CAR-T therapy in the lobby – actions big and small create learning opportunities and form patterns that can be used for good or for bad – but certainly should not be ignored.

There are many potential strategists in most organizations.”

When opposing the two – weeds and tomatoes – Mintzberg doesn’t argue which one is better. He simply outlines that they represent two extreme opposites, both overstated, and the actual strategic behavior falls “somewhere between”.

Only by juxtaposing each against the other can it be made clear that all real strategic behavior has to combine deliberate control with emergent learning.”

Making Sense Retrospectively

Real learning takes place at the interface of thought and action, as actors reflect on what they have done.”

Even the most adherent to their plans organizations constantly try things out – new processes, technologies, structures, partnerships, markets… They try and face consequences – good or bad – then they make sense of them and keep going.

It is so obvious, isn’t it?

Yet it breaks with decades of tradition in strategic management, which has insisted that thinking must end before action begins – that formulation must be followed by implementation.”

Here Strategy Safari makes a connection to the cognitive school of strategy and demonstrates once again that the elephant of strategy cannot be fully described by its parts taken separately:

There is no sequence of analysis first and integration later because, as described by the constructionist wing of the cognitive school, the world is not some stable entity “out there,” to be analyzed and put together into a final picture. Rather… the world is enacted. Reality emerges from a constant interpreting and updating of our past experience.”

“Learn, Learn, Learn!”

According to [the learning school], strategies emerge as people, sometimes acting individually but more often collectively, come to learn about a situation as well as their organization’s capability of dealing with it. Eventually they converge on patterns of behavior that work.”

For the longest time, the traditional approach to management focused on “control, order, and predictability.” It was all about setting directions and following them as described.

Nowadays, it is hard to find a job description that would not mention “ambiguity”, “competing priorities in the fast-paced environment”, “adaptability”, or “nimbleness”.

Being a fast learner is no longer an exceptional skill – it’s a starting point – both for individuals and their organizations.

To conclude this article, below are the basic principles of a learning organization – “the fullest expression of the learning school” – from Joseph Lampel – co-author of Strategy Safari.

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5 Principles of the learning organization :

1. Organizations learn from success AND from failure.
   
   
2. Learning organizations constantly reexamine themselves: can we do things better, can we do them differently?
   
   
3. Learning organizations recognize that workers and managers “in the trenches” often know more than their top managers and take action to collect and make use of this knowledge.
   
   
4. A learning organization promotes learning and knowledge exchange at all levels – both vertically and laterally.
   
   
5. Learning organizations actively seek knowledge outside of themselves – they learn from competitors, suppliers, customers, and regulators.

Organizations that are capable of learning from their experience do better than organizations that simply adapt to their environments.”

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Would you call your organization a “learning organization”?

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Next week we will take a look at the most entertaining schools of strategic thought: of power (“How can any strategic decision be implemented given all this politics?!”), of culture (“This is how!”), and of environment (“Hey, are you sure you have ANY strategic power?) Stay tuned!

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The title photo is by Markus Spiske on Unsplash