I noticed that a number of the people visiting my blog are looking for strategy material. So I’ve trawled my unpublished archives and have put together some short posts on strategy topics. Here’s one on looking to explain two ways of defining strategy. Mintzberg’s 5Ps and Whittington’s 3Ps.
The main thing to bear in mind, with both Mintzberg’s 5Ps & Whittington‘s 3Ps, is that they’re not a process tool for producing strategies. However, they are both excellent tools for analysing and evaluating strategies. That is definitely worth doing if you have to devise strategy. Before you release a strategy you need to robustly take it apart to ensure that it is fit for purpose. If you find it weak then it isn’t yet ready for prime time.
Henry Mintzberg has described five ways of looking at strategy as plan, ploy, pattern, position and perspective (cited in Mintzberg 2005). N.B. Mintzberg’s 5Ps overlap. Often a given strategy will be describable by any number of these.
This is the most obvious of Mintzberg’s 5Ps. Most people see strategy this way. Most of the published strategy documents you will read are plans. An attempt by the strategists to create a way of their organisation being successful. So, for example, a large bank might have a stated ‘plan’ for the future, which is to ensure continued profitability as a universal bank by avoiding being broken up. How realisable this is depends very much on external influences. Primarily government but also public opinion because government is most likely to act when there is a perceived need to be seen to be doing something (Lusk et al, 2008). Planning is all very well, but good strategy needs to be more than just a plan.
The next most common of Mintzberg’s 5Ps, and probably the way most non-strategists see strategy. Here it is almost a technique for dealing with things, the killer move, etc. For example, a major corporation might claim that by limiting its tax liability in a particular country it can employ more people and should the government seek to close the tax loopholes then it would be detrimental because it would force it to move its operations offshore. Other things that could come in here, for example, are very large corporations buying up successful start-ups in their field rather than doing their own research.
Pattern is the post hoc realisation, often described by analysts, of strategy. Often these can be identified when trying to do things like build a resource based view of an organisation. No less valid, once revealed an emergent strategy may continue to be consciously followed by an organisation. In the example above of buying up start-ups, this might have started off as semi-random acquisitions to get specific useful patents (cheaper and easier than licensing and also ensures that the competition don’t also get a licence). However after a few of those the company could have decided that this was something that it ought to do consciously.
A company may try and position itself in its chosen market. For example, in its early days Amazon tried to position itself as the bookseller that held everything. Without the limits of physical bookshops, Amazon could offer a catalogue of every book in print to its customers. Since then Amazon has positioned itself as the premier online marketplace, building on its success as a bookseller.
This is the view that often a strategy can be a way that an organisation views the world. It can be a highly innovative risk taking culture, that siezes opportunities. It might be bound up by legislation, needing careful vetting of proposals before it can change. Both these, and other factors will shape how strategy is developed and implemented in an organisation. The chosen perspective determines whether options are acceptable or unpalatable. No organisation is truly flexible. Cultural limits always exist when attempting to effect change.
Practitioners, Practice & Praxis
Richard Whittington (cited in B301, Readings for Blocks 1&2) puts forward an alternative set of three Ps in place of Mintzberg’s 5 Ps. Whittington’s are Practitioners, Practice and Praxis. This is a more human centred approach to describing strategy. It looks at who does it, how do they do it and what they do to promote change. The view this gives is much wider than that espoused by Mintzberg’s 5Ps, because it has a broader range of questions that takes the softer aspects into account. While I’m a fan of Mintzberg and think he has a very good way of explaining strategy I also like to take the human factors into account. In my opinion you need to use both Mintzberg’s 5Ps and Whittington’s 3Ps when evaluating strategy.
Mintzberg, H. (2005) ‘Five Ps for strategy’ in Mintzberg, H., Ahlstrand, B., Lampel, J. (ed.) Strategy bites back, Harlow, FT Prentice Hall
Lusk, S., Roberts, T., Mackie, J. (2008) National School of Government strategy research project: Strategy – what place in government? Summary of research findings, July 2008, National School of Government, [online] available from: http://virtual.nationalschool.gov.uk/StrategyExchange/Documents/NSG%20strategy%20project%20-%20research%20summary%20paper%20July%2008.pdf (accessed 01 March 2011)