Wednesday, December 10, 2008

“Framing contests”: What really happens in strategy-making meetings

One of the first series of strategy-making meetings I ever attended was in a large newspaper company. I was basically a fly on the wall, watching the process unfold with the mixture of curiosity, puzzlement and amazement, like a Martian watching a cricket game (or so I imagine).

It quickly struck me that there seemed to be a number of pre-formed sub-groups, with their own opinion and agenda. You had the people who wanted to take the company public, those who thought they should diversify into other areas of business, those who thought they should become a “green company”, and so on, and those who thought they shouldn’t care out of a matter of principle.

Of course there were some political motives at play but mostly these people seemed genuinely convinced that their opinion was what was best for the future of the company. And, rather than coming up with new ideas, the strategy meetings seemed to consist of the various people trying to convince each other of their view of the company, its future and the changes required.

Many years later, I read the PhD dissertation work of Sarah Kaplan, a former McKinsey consultant turned Professor at the Wharton Business School. Sarah described such strategy-meetings as “framing contests”. Framing contests, she said, concern “the way actors attempt to transform their personal cognitive frames into predominant collective frames through a series of interactions in the organization”. And although I had to read that sentence a couple of times (before I endeavoured to even begin to believe that I had any clue what the heck she was talking about) it gradually struck me as quite accurate.

In strategy meetings, people try to convince each other by painting a mental image of the future; what would happen if they’d continue as is, and what could happen if they’d follow the course of action proposed by them. They might throw in some numbers based on “research” (put together long after they had made up their mind), and engage in spirited debate, complete with raised voices, rolling eyes and the occasional hand gesture.

And you would win the contest if, through a series of debates, you managed to convince others and get your view of the company and its future adopted as the dominant frame, defining how the organisation sees itself and what it is trying to achieve in the market.

And this may not be a bad way of doing things. I saw the same process unfold – quite successfully – in model train maker Hornby, where the debate centred on divesting, diversifying, investing more or outsourcing production to China (the latter faction won). Similarly, it famously led Intel, over the course of several years, to abandon its memory business in favour of microprocessors.

Former Intel chief executive Andy Grove said about this: “The faction representing the x86 microprocessor business won the debate even though the 386 had not yet become the big revenue generator that it eventually would become”.

Stanford professor Robert Burgelman (who spent a life-time studying Intel), wrote about this same episode: “Some managers sensed that the existing organizational strategy was no longer adequate and that there were competing views about what the new organizational strategy should be. Top management as a group, it seems, was watching how the organization sorted out the conflicting views.”

Later, Andy Grove concurred that that is what happened, and quite deliberately so: “You dance around it a bit, until a wider and wider group in the company becomes clear about it. That’s why continued argument is important. Intel is a very open system. No one is ever told to shut up, but you are asked to come up with better arguments”.

So next time you find yourself debating your company’s strategy and future, realise you’re in a framing contest. Your powers of persuasion will only be as good as your mental imagery.