The Lords of Strategy by Walter Kiechel

It takes some guts to subtitle a business book “The Secret Intellectual History of the New Corporate World.” Even for a genre whose grand overstatements are only rivaled by the diet-books aisle, that is an ambitious tagline. The Lords of Strategy lives up to that subtitle and then some.  It is a grand, sweeping saga that tells the story of how the ill-defined function known as “corporate strategy” emerged in the 60s, systematically took over  boardrooms and MBA classrooms, and altered the business landscape forever. Even though we are only 4 months into 2010, it is pretty likely this is going to be the best business book of the year for me. If you are considering, currently in, or recently graduated from, an MBA program, you really must read this book. If this book had been written 10 years ago, it would have saved me a good deal of trouble making my own career decisions.

Does Strategy Matter?

The book is a dense, but deftly told story of how, starting in the 60s, and armed with little more than 2×2 matrices (you may enjoy my post on these) and spreadsheets, a new breed of strategy professionals completely reshaped the business landscape.

Refreshingly, the book starts out by tackling the elephant in the room immediately. Could an industry devoted to manufacturing intangibles really have had such a huge impact? Especially an industry whose products are considered by skeptics to be a series of vacuous flavors of the month? Whose members are viewed as mercenaries brought in, under the cover of “new ideas,” primarily to make layoffs politically feasible? Can you actually take a profession that prides itself on staying away from execution, at its own estimation?

Even otherwise charitable business people are inclined to view “strategy” as a function that at best has no real impact, and at worst, legitimizes wanton acts of corporate destruction by creating paper trails of justification for fait accompli decisions. In this view, the entire output of the strategy profession is a nonsensical smokescreen obscuring more fundamental machinations.

These are serious charges. Any book that attempts to spin a positive story around “strategy” starts out with its hero in the dock, presumed guilty. Kiechel succeeds in his main objective: acquitting the profession of the charges against it, and demonstrating the true impact of the “literary-industrial complex” that is strategy.

As an idea-peddler myself, I am obviously playing devil’s advocate here. I personally have no doubt that strategy does matter. That skeptics who itch to dive in and do “real work” eventually pay a high price for their skepticism. In the long run, it is the deliberate types, who take strategy seriously, who prevail. In a way, the mark of the true “strategy” type is the ability to use that very disdain and skepticism as cover for “getting the right things done.”

The book pointedly avoids offering a definition of strategy (though it cites several), so that Drucker phrase is probably a good operating definition to start with: strategy is about getting the right things done. The problem of defining “strategy” is surprisingly hard, but let’s look at the major themes of the book before considering why.

The Historical Development of Strategy

The major narrative arc in the book is a straightforward historical one. “Strategy” as a function did not really exist before the 60s. To the extent that the growth economies of the post-WW II decades needed such a construct, the implicit ones in the heads of CEOs sufficed. The Organization Man era was about what Michael Porter – a key figure in the book – would characterize, in the 90s, as “operational effectiveness,” in low-competition growth markets.

The events comprising the origin myth are fairly straightforward and distinctly American. Bruce Henderson invented the sector by founding the Boston Consulting Group in 1963. A textbook “maverick idea guy” type, Henderson pioneered the now familiar practices of hiring the best and brightest from the top MBA programs, especially those with engineering backgrounds (driving up the intake IQ and prestige of the programs in the process, with the result that the MBA slowly caught up, in terms of respectability, to law degrees and PhDs). BCG, when it began, was primarily a “high-concept” idea company, relying on carefully-crafted conceptual insights, applied to specific clients, to drive its business.

Very quickly competition emerged. Bill Bain, the top salesman in BCG, broke away, taking some of the best talent with him. The result was Bain Consulting. Bruce Henderson had only himself to blame: he had taken his own advice a little too well, organizing his young company as a crucible of internal Darwinian competition. Bain and his entourage were the fittest, and they not only survived and thrived, they decided to head out and turn the mock competition into a real one. And as befits a mutiny, Bain’s signature style was distinctly non “high-concept” and non-BCG. It was all about working closely, secretively, and at length, with only one client in a given industry. Alone in the strategy consulting world, Bain was also committed to participating in execution. This would both position them for serious growth in the eighties, when “shareholder value” became the sole metric of strategic success, and get them into serious trouble, due to their extreme intimacy with their clients. But through their ups and downs, Bain remained the un-BCG; with a cult-like (to their competitors, who called them “Bainies”) devotion to helping clients execute their strategy recommendations. Their calling card was the line, “we don’t sell advice by the hour; we sell profits at a discount.”

These events, and the early successes of BCG and Bain, did not go unnoticed. The genteel white-shoes at McKinsey, who had been running a trusted and somnolent business since 1926, with no strategy offering, realized that they had to react. And under the leadership of Fred Gluck, who joined the firm in 1967 and took over the helm in 1978, they did. In their response, they relied on neither ideas, nor execution, but on learning quickly. As a result, they took over the strategy revolution started by BCG by commoditizing (by their own admission) and hawking in volume the ideas that BCG had pioneered. The upstarts were going to be put in their place.

The last significant origin event was the entrance of Michael Porter, who around 1979 took on the task of dignifying and elevating the emerging ideas from the consulting world into an entire academic discipline.

With those four players on the stage: BCG, the idea company, Bain, the all-the-way-to-execution cult, McKinsey the behemoth commoditizer, and Porter the intellectual heavyweight, the strategy revolution was underway.

Kiechel’s explanation for why “strategy” arose at all is a well-worn one: the slowing of growth and demand, and the rise of competition in sector after sector. The management literature before that time had very little to say about competition, and operated under the (flawed) assumption that in a given industry, cost structures would largely be the same across players, and that there was enough room for everybody. Of the classic three C’s of strategy (costs, customers and competition), the last element was largely missing in the thinking of senior managers in the fifties.

Compelling though the explanation is, it is not completely satisfying. The first two decades after World War II were extremely anomalous. Competition clearly was a feature in the Robber Baron era (recall the mad race to lay the most miles of track between the Union and Pacific railroads in the 1860s). Competition was also present and literally brutal (involving actual wars) in the mercantilist era of national-charter companies in the two centuries before that, a subject I’ll get to shortly in my review of Nick Robin’s excellent 2006 book about the East India Company, The Corporation That Changed the World. Surely there is a prehistory of strategy to be mined from those eras, even if there were no Bains, BCGs and McKinsey’s to capture it in 2x2s?

Be that as it may, corporate strategy arose to solve real problems. The rise of competition was merely a stressor, and the obscurity of costs just a symptom. Larger forces were at work, what Kiechel calls the four horsemen: deregulation, technology, changes in capital markets and globalization. This particular list of four forces is intriguing: they were the exact same four forces that shaped the world of mercantilist corporations between 1600 and 1850, but in rather different ways. But I am getting ahead of myself. That’s a whole other book review.

The Rise of Strategy

Among them, the four key players – BCG, Bain, McKinsey and the Michael Porter one-man show – created the intellectual landscape on which corporate stories have played out over the last four decades. The history of modern strategy ideas begins with BCG, which adopted its regular Perspectives newsletter (the high-end blog-like content marketing vehicle of its day) as its main calling card. Through it, they introduced the world to the famous “Growth Share Matrix” which introduced the colorful terms dog, cow, wildcat and stars into the business lexicon, and its comrade-in-arms, the experience curve. Together, these two constructs helped strategy create its first great success: showing business leaders that costs could not be assumed equal across players in an industry; that the market leader, by learning the most and having the largest economies of scale, was positioned to dominate the market in terms of costs. BCG taught its clients that costs could be systematically and predictably driven down as a product matured; that cash cows should be milked to feed the stars; that dogs should be put out of their misery; that wildcats should be given careful attention. All ideas that are taken for granted today.

These crisp, unqualified high-concept ideas were full of problems of course, and there were plenty of unintended consequences. BCG’s ideas helped create brutal cost competition in entire sectors, driving everybody’s margins down. Their undervaluing of the “dog” quadrant helped created the leverage buyout (LBO) sector in the late 80s (a business activity that has recently re-emerged in the guise of “Private Equity”). On the conceptual front, it would take Michael Porter much of the eighties to refine the ideas with his voluminous writings, and plug the major holes.  But the important thing to note is that BCG started the conversation.

The march of new ideas continued, and while some were true flavors of the month – the “re-engineering” bubble of the early nineties would later be dismissed by Porter as not strategy at all, but glorified Taylorist operational effectiveness, and flawed at that – there was indeed a gradual accumulation of real and solid ideas that led to what Kiechel calls the “intellectualization” of business. The foundations had been laid for analytical leadership, driven by ideas and data.

Porter’s contributions of course, are well-known, but to my mind, surprisingly unoriginal. Starting with his five-forces framework, all the way to his coda, “What is Strategy” (which he wrote in 1996, upon his return to strategy after a brief flirtation with government and state policies), much of Porter’s work, if you trace the lineage of ideas, is about working out the details and filling in the gaps. Crude and over-simplified they may have been, but it was the consultants (and the micro-economists across the street) who actually came up with the original ideas. Porter’s most significant idea-hijacking victim was likely McKinsey. The book notes – and this was news to me – that the idea of Value Chain Analysis, which Porter named and worked out in detail, actually originated in the one piece of original work that can be attributed to McKinsey, the idea of the “business system”:

If there were an award for the most famous footnote in management literature, a strong candidate would be the first one in chapter 2 of Porter’s book [On Competition]. Among McKinsey veterans, mere mention of it still causes certain sets of teeth to grind. In this footnote, the professor acknowledged that the business system concept “captures the idea that a firm is a series of functions…and that analyzing how each is performed relative to competitors can provide useful insights.” He also conceded that McKinsey “stress the power of redefining the business system to gain competitive advantage, an important idea.”…But then, in two quick sentences, Porter contrasted the system to his own ideas and dismissed its relevant to the rest of his discussion, which would go on for five hundred pages.

Moving on, Bain’s role in the history of strategy strikes me as the most significant, and their contribution was at once a philosophical idea and an operating doctrine: they insisted on working only with one client in an industry, staying in the background, and not publishing their ideas in codified forms for others to use. Besides finessing the practical problem of deciding who owns the intellectual property arising from a client engagement – an issue that caused resentment among BCG and McKinsey clients – the stance also reflects what I consider a fundamental and defining feature of strategy: it is primarily a temporary informational advantage, and it is only valuable to the extent that it cannot be copied. This means that the very act of codification and broad dissemination turns a “strategic” idea into a commodity. Porter would later popularize the idea that certain ideas, which he arbitrarily labeled “operational effectiveness” ideas, were merely “costs of doing business.” But the very fact that Porter’s own ideas (like BCG’s and McKinsey’s) are available to all, in a way, makes them non-strategic cost-of-business commodities as well.

Bain also, alone among the major players, stayed true to another idea (that dominated academia before Porter) that I consider central to strategy: a strategy by definition is unique to a situation. It is not a formula that can be applied all over; what can be codified is not strategic. Generality and strategy do not go together, and this is reflected in the very work processes of both business and military strategists: they rely primarily not on general ideas, but on case studies, and treating each new case as a mystery to be cracked with a case-specific insight, in a way that delivers competitive advantage. To the extent that you are successfully applying formulas in uncreative ways, you are not solving strategy problems at all. If you and your competitor are both BCG clients, and both are applying an idea like the experience curve, the result is not a temporary strategic advantage for one player, but an race to the bottom, with customers and suppliers enjoying the benefits.

This idea is not new, and goes back to Clausewitz’ notion of the coup d’oeil (“strike of the eye,” seeing and grasping the essential and unique advantage in a situation, by reference to similar, but not identical, cases encountered in the past). But among the major strategy firms, only Bain appears to have invested in this notion.

Of course, this strength was also a weakness. As the book recounts, Bain’s secretiveness and unique, situational execution support would get them into bed with their clients, most famously with Guinness in Britain, leading to conflicts of interest and barely-legal activities. Bain would also lay the groundwork for establishing stock market performance, rather than CEO hagiographies, as the main barometer of success, and help create, through Bain Capital, the LBO sector, to take advantage of BCG’s systematic undervaluing of “dogs.” Bain’s work was also indirectly the cause of the rise of a whole breed of smaller boutique firms specializing in propping up share prices.

Those then, are the highlights of the story created by the main players. In the nineties, besides the re-engineering bubble, other ideas would be added to the mix, including that of “core competency” due to Prahalad and Hamel, but the main thread of the story essentially winds down after the mid 90s. All three of the top firms focused on international expansion and industry-specific practice development rather than further management innovation. Porter mysteriously vanished from strategy conversations. Kiechel notes, that after publishing “What is Strategy” in 1997, and putting the re-engineering mavens in their properly humble place, he

“…quickly received a contract to publish a book expounding and further developing the ideas in “What is Strategy?” Thirteen years after the article appeared, that book remains unpublished. A mystery perhaps, but not as intriguing as the question of why this man, whose work has had more effect on how companies chart their future than any other living scholar’s, has yet to receive the Nobel Memorial Prize in economics.”

Kiechel is being perhaps too respectful. Influential though they have been, Porter’s ideas have not yet been proven solid enough to merit the honor. I personally have had a fat volume of his collected works sitting on my shelf for a couple of years, but have never been inspired enough to finish it. Unlike the equally prolific Drucker, Porter is rather turgid and not very readable. There is a reason: there is a deep conceptual problem with Porter’s work, and the entire main line of development of strategy as a discipline, that makes it deeply suspect: the fact that people are missing.

With characteristic fairness, Kiechel also tells the “alternative” story of strategy, involving very different actors. If the “Positioning School,” Porter and the Big Three, constitute the Keynesian school of strategy, arrayed on the other side is the equivalent of the Friedman school: the “People” School, a minority school that is gaining prominence today.

People or Position?

Kiechel correctly notes that the main tension in the literature on strategy is the one between positioning (driven by numbers and models), and people (driven by organizational theory ideas).

At the heart of everything accomplished by Porter and the Big 3 is an assumption that people don’t really matter. This makes the main story of strategy a story about positioning and formulas. We’ve already seen one problem: that codification, generalization and dissemination turn strategies into costs of doing business. This creates an ever-faster arms-race by eroding competitive advantage faster than new ideas can create it. Entire industry sectors start to tick faster and faster, benefiting customers and suppliers, but not corporations, when strategy ideas take hold across the board. This problem was implicitly solved by Bain through secrecy, exclusivity and non-publication. Among the mainstream players, it was again Bain consultants who implicitly acknowledged, through their preference for long engagements and participation in execution, the fact that people and strategy are not separable, and neither are strategies and execution.

The alternate approach to strategy focuses directly on dynamics, and by dynamics, we mean the patterns of change created by that most unpredictable variable in the equation, people.

Porter here is the target of most of the criticism, and the leading lights of the “People” school begin their critiques with the question, “where are the people in a Porter strategy?” Kiechel neatly brings out the nuances of Porter’s reaction to this charge through carefully selected quotes. At one point, he describes how Porter insists that his framework is dynamic, protesting, “to this day I completely accept the premise that every company is different, that every company is unique.” At another point, he has Porter resignedly saying, “Where I fail is in the human dimension.”

To be fair to the “positioning” school though, people, the driver of unpredictable dynamics, are not easy to model and integrate into strategy. And it is not for lack of trying. The school began its work by drawing inspiration from the work of Herbert Simon, who introduced the idea of bounded rationality and the idea that people satisfice rather than optimize. From there, the march to behavioral economics-inspired approaches to strategy over several decades, was inevitable.

Besides my favorite, William Whyte (who gets a too-brief mention), the important thinkers in this school are not as well-known as the positioning school Big Four: Richard Cyert (The Behavioral Theory of the Firm), Karl Weick, (Collective Sense-Making), Henry Mintzberg (Mintzberg on Management) and Jeffrey Pfeffer (whom Kiechel calls the “Porter of Organizational Behavior”).

One name though, should be familiar: Tom Peters was the lone rebel in the mainstream strategy world, trying to draw attention to people aspects. Though Thriving on Chaos was the first “big” business book I ever read (in the mid 80s, as a teenager), I am frankly not a fan. But he must be given credit for an entirely different achievement: creating the best-selling business book sector.

Though it mostly lost the war, the “People School” achieved its greatest success playing defense in the early 80s, with Richard Pascale’s 1984 article in the California Management Review, Perspectives on Strategy: The Real Story Behind Honda’s Success.” The significance of the article was that Pascale showed that Honda’s seemingly deliberate and modeling/data based invasion of America was really an outcome of serendipity mixing with in-market adaptive learning and the peculiar personalities of the principals. In other words, the actions and successes of humans within an agile, quick-learning startup were being attributed, by mainstream strategists, to deliberate modeling and data, and the use of elaborate constructs. A case of post-hoc rationalization.

Though Pascale won the battle, the “People” philosophy did not win the war, and for good reasons.

One good reason is simply that the “People” school is “pre-paradigmatic.” There is very little agreement between a multitude of contending schools of thought. The book quotes one study which found that 105 experts polled for “key ideas” from the school produced 146 candidates, of which 106 were unique. With that much dissent, the “People” school doesn’t stand a chance in the commercial marketplace for retail business ideas (which is why, by my reasoning, it is automatically more valuable, since fewer people understand the ideas). By contrast, in the “Positioning” school, there are perhaps a couple of dozen key ideas that everybody agrees are important, which every MBA learns, and most non-MBA managers eventually learn through osmosis.

Add to this the fact that any “People” focused school is necessarily based on metaphysical, rather than psychological axioms, and you get a mess. If you believe in an idealist “perfectibility of Man” doctrine, you will follow Maslow and end up with high-minded ideas about organizations allowing their people to self-actualize, resulting in their banding together into missionary “tribes” that proceed to Save the World. If you are skeptical of human perfectibility, you get “People” models like my Gervais Principle series.

The Left and Right Brains of Corporate Strategy

The “Positioning” school is basically a half-century worth of codification and dissemination of ideas under an assumption that companies are run by sound operating management, capable of execution.  Every idea developed by the school either creates a flavor-of-the-month bubble, or gets validated and incorporated into the very structure of the broader business environment, as an across-the-board cost of doing business. The result has been a gradual acceleration of change and a shortening of the advantage offered by any given idea. Ideas go from being secret strategies to codified commodities so quickly that they barely pay for themselves. Okay, I won’t repeat that idea again.

The “People” school has come down to a basic position that good people with a bad system/process will always outperform bad people with a good system/process. Hence the Good to Great idea that you must get the right people on the bus, the wrong people off the bus, and then decide where to drive. It is a fundamentally adaptive, experimental, local and entrepreneurial approach to business problems. It is also a model that does not naturally lead to industry-wide acceleration, since it is people, not ideas, that matter, and people and teams cannot (yet) be cloned.

The professionals may disagree in public, but I’ve never yet met anyone in the real world who does not mix and match ideas from both worlds. The Pascale Honda story is clever, but does not belie things like the Growth Share Matrix and its descendants. To some extent, the “Positioning” and “People” schools are the left and right brains of strategy, and smart people tend to operate in whole-brained ways.

Other Threads

There is plenty more in the book, all of it illuminated by fascinating and fresh anecdotes, and statistics on the growth of the sector.

One thread deals with the “endgames” for consultants. Since the sector operates by an up-or-out dynamic, with only about 10% making partner, the strategy sector creates an endless supply of exiting experienced business professionals. There is an extended discussion of one end-game: the emergence of a consulting stint as a fast-track path to senior management in client companies (which created a whole generation of consultant-turned-VPs, who became more demanding customers, raising the stakes for the whole sector).  Another currently popular endgame is apparently the Private Equity (PE) sector (the descendant of LBOs and the big brother of Venture Capital, in case you don’t know what that is).

Another interesting thread deals with the relative failure of the industry in dealing with innovation problems as opposed to cost control problems (which has led to the perhaps unfair association between strategy consultants and layoffs).

Yet another thread deals with the emergence of the “literary industrial” complex, including a discussion of conferences, the business book “packaging” industry, and the dominant influence of the Harvard Business Review (one insider is quoted as saying “You can get a year’s worth of business, maybe two, on the strength of one article.”)

Perhaps the most significant minor thread is the story of the rise of shareholder value as the key metric (an idea Jack Welch is quoted as calling “the dumbest idea in the world”). Related to that is an entire chapter on the role of strategy consultants in the financial crisis (short version, “we didn’t do it; we were down in the basement laying off people while the evil Quants were whispering stupid ideas in the CEO’s ears”).

There are also plenty of juicy nuggets of insider information for fresh MBAs to chew on. For instance, a McKinsey veteran is quoted as saying that the on a scale of 1-10, the relative power of various players is as follows:

  • Office Manager: 10
  • Industry Practice Manager: 4-5
  • Function Manager: 1-2

The Decline and Fall of Strategy

The tension between the resurgent “People” school (which is gaining ground thanks to the Strengths movement, and books like Good to Great) and the “Positioning” school is just one of the main cracks in the edifice of modern corporate strategy.

But though a synthesis may occur there, other forces may yet create trouble for strategy as a discipline. Though Kiechel takes great pains to avoid this interpretation, his story lends itself very well to a “rise and fall” interpretation. Trends unfolding today might well be undermining the foundations of strategy.

Not least among these trends is the disruption of the very “ontology of strategy” as one of the new thinkers quoted towards the end of the book, Philip Evans, suggests. Evans of course, is talking about the things that are very familiar to the readers of this blog – the rise of social media, the increasing ambiguity of constructs such as “corporation” and “market,” and the uneasy new constructs (such as “Enterprise 2.0” and “Ecosystem”) that seem poised to take the place of the old ones. Besides this evidence, the book also notes that there hasn’t really been a notable new idea in strategy since the mid nineties. Rather to my delight, Kiechel dismisses the one candidate new idea, Blue Ocean Strategy as “self-serving,” and later in the book asks, rhetorically:

[N]ame one strategy guru on the order of a Porter or Hamel who established his reputation after 1995, or the title of a best-selling book on the topic published since then. How many out there snap to at the names of W. Chan Kim and Renee Mauborgne?

Since Blue Ocean Strategy is the only book I have completely panned on this blog, it is nice to have my views validated.

So while Kiechel doesn’t overtly suggest that the “strategy” revolution may be in trouble, after four decades of success, he (very fair-minded of him) does lay out the necessary evidence required for those who want to draw that conclusion.

That said, and whether or not the discipline and function survive, the accomplishments in the decades of its reign are truly impressive. Even if you have a fairly good mastery of major business ideas (I consider myself fairly well-read on the subject), the book deftly weaves a story through all the major ideas of the last four decades, in a way that  truly bring outs the highlights. This is definitely a sum-greater-than-parts book.

What the Book Does Not Cover

There are many potentially relevant topics the book leaves out, and most are defensible exclusions (for example, the ecosystem role of the industry analyst players like Gartner and Forrester is not considered, nor is the pre-history of strategy, which I already mentioned).

But one omission is worth discussing: explicit definitions. Kiechel, adopting a journalistic stance, avoids offering up his own definition. Instead, he characterizes strategy in a functional way as

…the framework by which companies understand what they’re doing and want to do, the construct through which and around which the rest of their efforts are organized…”

This is clearly not a definition, and not intended as one. You could be reading tea-leaves and calling it strategy. Or, if you are a pure Druckerian, you could declare that “the purpose of a business is to create and keep a customer,” and use that static doctrine as your framework and construct, and worry no further. Yet, strategy is clearly more than that.

The positive definitions offered are only offered as illustrations of the thinking of specific schools or people. For instance, the pre-Porter state of management thinking in academia is characterized through a Ken Andrews quote (a Harvard faculty member who taught courses eventually taken over by Porter):

“Corporate strategy is the pattern of major objectives, purposes, or goals and established plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be.”

As Kiechel notes, that grand, overarching definition says everything and nothing. But it creates the intellectual room for viewing strategy as highly unique and individual to companies and situations, a process of creative story-telling. By contrast, Porter’s formula offerings, and the industry’s, are more confining, for example, “The essence of formal corporate strategy is relating a company to its environment” (which suggests that strategy is essentially about responding to competition).

I should mention here that I have a vested interest in raising the question of definitions, since I actually offer one in my upcoming book, Tempo (you can find a really old version of my ideas in my 2007 post, Strategy, Tactics, Operations and Doctrine: A Decision-Language Tutorial, but my thinking has evolved a LOT since then, so don’t hold me to the details).

But getting back to the question of definitions for the specific context of corporate strategy, if thinkers like Andrews were being too general, Porter and his group too formulaic, and the “People” school too implicit, where are we to look? I personally believe the heart of the matter goes back to Clausewitz and Napolean’s coup d’oeil: a whole-brained local, and specific insight, in the context of a narrative. I first stumbled across this idea in William Duggan’s book, Strategic Intuition, which I reviewed a while back, where he noted that Porter’s thinking is really a modern-day version of the thinking of Jomini, a contemporary of Clausewitz, who offered very formulaic explanations of Napolean’s successes where Clausewitz offered explanations based on Napolean’s unique capacity for strategic insight. If that’s too historical for you, you may want to read my post How to Think Like Hercule Poirot. If strategy is a matter of “cracking a case,” it is probably not a bad idea to learn from fictional detectives.

Looking back, I’ve clearly been beating this particular drum for a while.

I’ll close with a little piece of personal disclosure. I have endured two significant professional rejections in my career so far. I failed spectacularly to land a tenure-track position in academia, and I crashed out of the second round of a McKinsey interview. Curiously, while it took me months of nursing unworthy sour-grapes feelings to get over the first rejection, my reaction to being rejected by McKinsey was one of immediate relief. I never understood why until today. Now I know: despite my deep interest in the subject, my personality and strengths would have made me a train-wreck at a place like McKinsey, so I am glad I failed fast, and that they were wise enough to kick me out of the process early. If I knew then what I know now, I’d probably have applied to Bain instead. From what I’ve read, that seems more like my style. Or most likely, I’d have avoided the mainstream altogether and gone over and found a niche in the “People” school somewhere.

But wait a moment. This blog is that niche. So maybe I am in the “People School” strategy business after all. Hmm… “Ribbonfarm Consulting Group” (RCG) has a nice ring to it. Egggggssellent. Maybe I’ll hire my cat as my first employee.

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About Venkatesh Rao

Venkat is the founder and editor-in-chief of ribbonfarm. Follow him on Twitter


  1. Bought, thanks!

    I guess the answer I’m dying to hear is if there’s any “there” there or if the entire jolly romp into strategy and consulting has been much like the story of economics over the last 50 years of an entire edifice build up and much noise and fury and genuine results but, ultimately, a doomed venture that needs to be torn down and started again from scratch?

  2. My comment is much like his: you, like everyone else, are completely absorbed by the newest thing, which still being new, we don’t have even have the language to describe – but a big part of it is our obsession with business.

  3. Rao,

    If you want some lighter reading on this subject, borrow Matthew Taylor’s Management Myth. The subject is slightly broader to the Lords of Strategy, perhaps less analytical but still rather thoughtful. Personal anecdotes included give you a peek at how management consulting industry feels like from the inside and the book covers some of the pre-history you mentioned missing in Kiechel.

    Having said that, although it points to some serious questions, it is more of a beach book than a serious tome.

    In regards to a more serious look at the subject, at the moment I am reading Ralph Stacey’s Strategic Management and Organisational Dynamic. As a textbook it is not such an easy ready, but the content is compensates for the difficulty. The few chapters I have gone through diagnose quite clearly some of the root causes of the many issues with the traditional strategy texts, some of which you point to in the post above.

  4. Non-MBA here. Could you recommend an overview of those “key ideas that everybody agrees are important, which every MBA learns, and most non-MBA managers eventually learn through osmosis.”?


    • Pankaj ghemawat has written some papers summarizing the history ofnthese ideas, so one way would be to download the free papers and dig up the references.

  5. Great read and analyis on different schools of thoughts. A previous company used Bain Consulting for their business strategy and failed miserably. I recently read a book on Balanced Scorecards and their application to executing and measuring strategies (not the planning side though which is what I think you are focusing on). What are your thoughts on best schools of thoughts about executing strategy assuming the plans are sounds?

  6. Interesting analysis. The book seems to be similar to some stuff written by pankaj ghemawat, a one time HBS prof who has written about the history of strategic ideas, which, it turns out, evolve like womens’ fashions – with the big consulting firms being the big Paris houses. The trouble with strategy as a business field is ultimately it’s resistance to any controlled evidence-based evaluation. The anecdotal “successful companies do X” seen in Peters and Good to Great have been largely debunked. Absent any science, the field is Increasingly the territory of dogma and quasi-religion.