Art & Craft of Management

Henry Mintzberg suggests that MBA programs overemphasize the science of management while ignoring its art and craft. The art of management refers to insights or gut feel that may lie at the core of critical strategic decisions – especially when made under great uncertainty. For example, one might ask whether a given advantageous decision resulted from tacit insights or serendipity. The craft is experience that managers draw on in such contexts. For example, recent research on analogizing explores how managers extrapolate from experience to new situations. Certainly most management education focuses on analysis (the science). The following video (of Mintzberg) may open up an interesting, and perhaps counterintuitive, discussion of strategy process.

Contributed by Aya Chacar

Keeping Your Cool in Alliances

Quirky is a company that collects ideas on innovative products from it’s “community members.” It is governed somewhere between crowdsourcing and a holacracy (see the posts on Zappos and Valve). They have formed an alliance with the much more established and traditional, General Electric (GE). The two companies have very different strengths which can be the basis of complementarities that drive value creation in alliances. Together, they have produced Aros, a connected air conditioner that, for example, uses one’s Phone location to tell the system when to turn on and cool one’s house. This is a nice opportunity to apply the frameworks for achieving a network advantage (see Greve, Rowley, & Shipilov’s new book). For example, Shipilov describes the Alliance Radar framework which allows you to see if an alliance portfolio is balanced and identify what kinds of alliances will create the most value. Below is a video review of the resulting product. See also Henrich Greve’s blog post on the alliance for a discussion of how it has worked. While GE handled the product design, manufacturing and sales, the core idea came from Quirky.

Contributed by Aya Chacar

Beaten: An Alliance Out of Tune

Beats by Dre has a newly told story of an alliance partner that did most of the work but lost everything in the process. Monster, a father and son business (Noel and Kevin Lee) came up with the technology but was severely out negotiated by ts more experienced partner. A great cautionary tale for the study of alliances. I use the “Four C” alliance framework to teach alliances:

  • Complementarities. Monster had the engineering chops to design the path-breaking audio. Interscope and Dr. Dre had the marketing expertise and contacts to make them a fashion item. Clearly these complementary capabilities were strong.
  • Congruent goals. While they had a strong interest to cooperate, their interests diverged on the issue of who would own the intellectual property, brand, and on how the value would be split.
  • Compatibility of the Organizations. The larger and professionalized Interscope had a team of experienced lawyers. Kevin Lee had a BA in engineering. They could work together but not necessarily understand each other.
  • Change. Over the course of the alliance Interscope needed Monster less and less. Once the first products were designed and produced, they could hire other expertise to keep the products fresh (much of that was around fashion rather than new technology). This allowed Interscope to shut out Monster altogether.

Contributed by Russ Coff

6 Seconds to Make an Impression

A recent study found that recruiters look at each resume for an average of 6 seconds (using eye tracking software). This is especially revealing given self reports of 4 to 5 minutes per resume. Online profiles get about the same amount of scrutiny with almost 20% of the time spent on the picture — of course this has the potential to introduce significant bias. The other few seconds is spent scanning the current and prior work experience, dates, and education. They do report that well-organized resumes, with clear headers marking the critical information, are rated significantly better. So you teach a strategy class, why should you care? First of all, this is an insight into how imperfect strategic factor markets actually are. In this context, you might ask, how can a firm gain an advantage in hiring talent. A key reason to use this example is that your students will tend to care about the job market and this will instantly get their attention. You could couple this with an exercise where teams of students rank a stack of resumes to identify candidates who might have critical capabilities for a company you are doing a case on (could work with any case where human capital is critical).

Contributed by Russ Coff

Failure to Pivot: Stroke of bad luck?

Of course entrepreneurs need to anticipate when to pivot off of their initial plans (same applies to larger firms but it’s harder). This silly video drives home the need to pivot lest you run up against a wall. You might then follow up with some examples of first movers who had the business model almost right but failed to pivot (firms like MySpace, LinkedIn, AOL, Yahoo).

Contributed by Russ Coff

Taking Strategic Risk for a Spin

Individuals and firms have different tolerances for risk. This video certainly captures fearlessness (and maybe stupidity). This might lead to a nice discussion on how such different attitudes might affect competition (for example between small and large firms). It also might seed a discussion of how decisions are made or human capital.

Contributed by Russ Coff

An Engineer in a Meeting…

This clip illustrates how an engineer perceives the product specifications as communicated by marketing professionals. As silly as it is, the underlying language problems are very real and are at the root of many failures to coordinate in organizations. Indeed, the firm that is able to do this effectively and consistently may enjoy an advantage in the marketplace. The video is a bit longer than I would use in class (especially given how silly it is) but might be good as an electronic resource outside of class. If you are looking for an exercise that emphasizes coordination across units, you might check out the MicroDesign negotiation.

Contributed by Russ Coff

Graphene with a Kitchen Blender?

Can a simple “kitchen blender” method of making graphene shake up the electronics industry? The one-atom thick sheets of carbon may one day replace silicon wafers and revolutionize computing and electronics. For example, recent findings suggest that electricity can be generated by running salt water over graphene. Samsung may soon use graphene to make ultra thin hard cases for it’s phones. A fun thought experiment in class might be to develop scenarios for how this disruptive innovation might alter the dynamics of the industry (and adjacent industries).

Contributed by Russ Coff

Let Your Emotions Go, Deer

Strategy is a cold calculating science, right? And yet emotion may be the key to value creation on so many levels. Recent research by Quy Huy (among others) expands on this. However, this is still only scratching the surface. How far might we take this in the classroom to balance the more analytical frameworks we regularly trod out? How might it relate to differentiation advantages? Human capital as a resource? The strategy process? Governance? In fact, it may add an important dimension to almost any topic we cover in class.

And here is another video along the same lines: Continue reading

Coopetition: Shaping up your strategy

This exercise is a simplified version of the Global Alliance Game. That is, there are resource complementarities created among teams. However, this one emphasizes (to a greater extent) that the teams are in direct competition to complete the same tasks. As such, it is a nice exercise to explore coopetition and alliances with competitors. Introduce the exercise as an experience with the use of resources needed to accomplish a task that have been distributed unequally. Form the groups. Groups should be placed far enough away from each other so that their negotiation positions are not compromised by casual observation. Distribute an envelope of materials and a copy of the accompanying task sheet to each group. Explain that each group has different materials, but must complete the same tasks. Explain that groups may negotiate for the use of materials and tools with other teams. The first group to finish all the tasks is the winner. Give the signal to begin. When the groups have finished, declare the winner. Then conduct a discussion on using resources, sharing, negotiating, competing and using power.

Group Materials (Groups may negotiate with each other for the use of needed materials and tools on any mutually agreeable basis):

Marshmallow Challenge

This TED talk describes the marshmallow challenge exercise. This discussion has a nice twist to focus on team dynamics and the decision process. Interestingly, kindergarten students tend to do best on the exercise because they are more likely to iterate and prototype rather than separate planning and execution (as MBA students tend to do). Of course, this is similar to the Tinkertoy exercise but the team dynamics and decision-making message is quite distinct. You may also recognize this as a slightly altered version of the spaghetti challenge exercise that has been around for quite some time.

Contributed by Darren Dahl and Joann Peck

Exercise: Seed of an Idea

Stanford’s Tina Seelig describes a classroom experiment (below) where students were given $5 of “seed” funding and 2 hours to make as much money as possible. The best teams made money by working outside of the stated constraints (e.g., ignoring the seed funding & timeframe). Understanding their human capital and unique resources was critical. This really simple exercise gets at the crux of entrepreneurial opportunity.

Contributed by Russ Coff

Netflix “Browse Endlessly” Service

Ok, here is another silly ONN segment on a Netflix “browse endlessly” service. It is only funny to the extent that many of us have experienced extreme indecision when faced with the many alternatives that are available to us. In class, this clip might trigger a nice discussion of bounded rationality – the very root of competitive advantage and almost every other aspect of strategy (see Simon, Models of Bounded Rationality).

Contributed by Russ Coff

Winner’s Curse: Online Edition

auction-0Gourmet adventures is a very nice exercise to demonstrate the Winner’s curse in class. The key takeaway there is that decision-makers need to try to understand how certain they are in order to figure out how much to shade their bids — something that few managers actually do. If you have an online course or don’t have time to do this in class, you might consider this simple winner’s curse online simulation (by Mike Shor). The Java applet works nicely to simulate bidding competition over a target including an estimate of the private synergies. Note that you may have to turn off popup blockers and lower security settings for the web page to run properly.

Contributed by Russ Coff

Adaptation on Rugged Seascapes?

We teach strategy formulation in a dynamic world and yet many of our analytic tools may seem more static if we aren’t careful. For example, 5 forces offers an industry snapshot unless students know to explore how the forces evolve. I tend to introduce scenario planning, decision trees, and monte carlo simulations to incorporate the qualitative and quantitative dimensions of strategy formulation under uncertainty. This brief video provides a fairly graphic view of how it feels to managers. Of course, the seascape metaphor is a play on Levinthal’s classic article (adaptation on rugged landscapes)…

Contributed by Russ Coff

Do MBAs destroy value?

MBA programs help students gain general human capital which may give them a feeling that they can solve problems in a broad range of contexts. Some have lamented how this can result in arrogant behaviors that make them hard to work with. Scott Adam captures this problem admirably below. It might make sense to use this to imbue students with a sense of caution as they enter the workforce.

Contributed by Russ Coff

Dogbert on Bureaucracy

Dogbert writes a new management text and defines bureaucracy as when “a hundred people think ‘A’ but compromise on ‘B’.” One wonders how firms can create any value at all. This might spur a strategy process discussion of how satisficing results in suboptimal outcomes.

Contributed by Russ Coff

Task Force on Bad Decision Processes

My university (along with many others) has a “committee on Committees.” It’s as if Scott Adams designed the process himself. How often do firms have poor or haphazard processes but expect consistent superior outcomes from them? Along these lines, David Croson reminded me about the Ig Nobel Prize winning government Report on Reports. This Dilbert video seems like a decent starting point for a discussion of strategy process…

Contributed b Russ Coff

ONN Tips for Female Executives

Of course, the ONN video below is silly. However, the satire may open the door to serious questions about women in management. In a recent SMJ article, Dezso and Ross found a significant positive effect of having women on the top management team. Why, then, don’t we see more?

Similarly, here is a Pantene ad that highlights how labels for men and women tend to differ in the workplace. Continue reading

Paper Fight Exercise

Having a paper fight in class can really shake things up. It also allows you to demonstrate some simple competitive dynamics principles in a very short exercise. I use this with evening, executive and BBA students — generally on the first day of class to shake things up and introduce the topic.

Learning Objectives:

  • Industry evolution and performance targets.
  • Strategic resources & competitive advantage
  • Dynamic capabilities and hyper-competition
  • Competitive dynamics and game theory
  • Improvisation and strategy
  • Shake things up!

Process/Setup (<5 min): Continue reading