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Storytelling In The News: #112

HBR praises hardball strategies: let's kill the competition!

April 7, 2004

The leading article in the Harvard Business Review for April 2004 praises hardball strategies -- "five killer strategies for trouncing the competition".

In one sense, since a strategy is a particular kind of future story, the article is all about story and about which are the more effective kinds of forward-looking stories in the business arena.

Yet in another sense, the article is so comically macho in tone and so cynically disparaging of any behavior that is not ruthlessly adversarial, an inattentive reader might get the impression that the article is arguing the story is unimportant and might miss the fact that the authors are in effect arguing that some stories are more powerful than others.

This confusion is accentuated by the fact that the authors themselves, George Stalk, Jr. and Rob Lachenauer of the Boston Consulting Group, appear to be under the misapprehension that hardball and softball approaches to strategy and management are alternatives, when in reality they are complementary.

What is hardball strategy?

The authors lay out a "hardball manifesto" with all the revolutionary fervor that Karl Marx launched his Communist Manifesto 150 years ago. The first part is "to relearn the fundamental behaviors of winning" (on the assumption that managers have forgotten the behaviors of winning). According to Stalk and Lachenauer, "management thinking has gone soft, with its emphasis on squishy things like corporate culture and the coddling of customers. Instead they offer the playbook for a dog-eat-dog world.... Winners in business play rough and don’t apologize for it."

The desired behaviors are said to be:

* Focus relentlessly on competitive advantage.

* Strive for “extreme” competitive advantage.

* Avoid attacking directly.

* Exploit people’s will to win.

* Know the caution zone.

The hardball strategies which are to be deployed "in bursts of ruthless intensity" are:

* Devastate rivals’ profit sanctuaries.

* Plagiarize with pride.

* Deceive the competition.

* Unleash massive and overwhelming force.

* Raise competitors’ costs.

The sensible aspects of the hardball strategy

What is undeniable is that better strategic ideas are likely to win out over worse strategic ideas. Further, if better ideas are pursued consistently and persistently by an organization, the organization is likely to do better than organizations that have worse ideas or that do not pursue their good ideas consistently and persistently. This much is self-evident, although Stalk and Lachenauer deliver this simple message with so much sound and fury and false dichotomies that one might miss the nature of the argument that they are putting forward.

The false dichotomy of hardball and softball players

According to Stalk and Lachenauer, the world of organizations can be divided into two types: hardball and softball organizations:

* Hardball players, like Toyota, Dell, and Wal-Mart pursue with a single-minded focus competitive advantage and the benefits it offers—leading market share, great margins, rapid growth, and all the intangibles of being in command. They pick their shots, seek out competitive encounters, set the pace of innovation, test the edges of the possible. They play to win. And they do. They are "willing to hurt their rivals". They are "ruthless". They are "mean". They "enjoy watching their competitors squirm". In an effort to win, they go up to the very edge of illegality but are careful to make sure that all their moves are legal. They don't cheat but they cause discomfort without apologizing. They enjoye bare-knuckle boxing and using fakery to deceive their opponents.

* The remaining organizations -- which appear to include most of the current business world -- are mere softball players, who may report decent earnings and even get favorable ink in the business press—but they aren’t intensely serious about winning. They don’t accept that you sometimes must hurt your rivals, and risk being hurt yourself, to get what you want. Instead of running smart and hard, they seem almost to be standing around and watching. They play to play. And though they may not end up out-and-out losers, they certainly don’t win.

Stalk and Lachenauer appear to miss that no company is consistently and aggressively adversarial in everything it does -- certainly not Toyota, Dell or Wal-Mart. The truth is that these companies are at sometimes strenuously adversarial, but there are other times for instance when dealing with partners and employees when they are the epitome of collaboration. The false dichotomy between hardball and softball management theory The false dichotomy among hardball and softball organizations is matched by a similar distinction between hardball and softball "management science":

According to Stalk and Lachenauer, a softball management approach is a discourse around a constellation of squishy issues—leadership, corporate culture, customer care, knowledge management, talent management, employee empowerment, and the like—has encouraged the making of softball players. Examples are said to be recent business books. Who Moved My Cheese? Or Fish! A Remarkable Way to Boost Morale and Improve Results. Or Servant Leader. Or Hug Your Customers. According to Stalk and Lachenauer, softball books accounted for probably four out of five of the titles on the business best-seller list in the last ten years—and even more in the past five years -- a trend that Stalk and Lachenauer say is not good for the people in an organization. .

By contrast, a hardball management approach as preached by Stalk and Lachenauer entails adopting a thoroughly adversarial tone to every issue. It is intense and efficient. It cleanses the market. It makes companies strong and vibrant. It results in more affordable products and services, as well as more satisfied customers. It makes competitors sweat. Flabby rivals will sometimes gasp that hardball players are playing too hard. Hardball management science ignores such complaints as whining.

What Stalk and Lachenauer appear to miss is that the recommended hardball management approach of adopting a strenuously adversarial stance on every issue would be a disaster if it were to be applied. There are times when one needs to be adversarial and there are times when one needs to be collaborative. The proliferation of what the authors call "softball management approach" reflects the fact that the complexity of business today requires a much greater reliance on partnerships and networks and collaboration than ever before. An aggressively adversarial approach to partnerships and networks and collaboration would obviously be disastrous and none of the so-called hardball organizations adopt it in this context.

Stalk and Lachenauer's implicit concept of the manager: the dictator

One cannot argue with the kernel of truth in the article that better management strategies should be consistently pursued. But Stalk and Lachenauer never make clear how the managers actually pursue their strategies. How do managers persuade staff in the organization to change? How do they build collaborative networks and partnerships? The article assumes that decisions made by managers are automatically implemented so long as the manager is hard-nosed enough. Those who don't agree are fired. Such an assumption is only feasible in situations where the manager has unlimited hierarchical and moral authority -- in other words, a tsar or dictator whose every decision is implemented without question and is never troubled by skeptics among the board of directors, or among staff or partners, or on Wall Street.

What Stalk and Lachenauer overlook is that persuading people to change and to collaborate is today one of the central leadership tasks that cannot be accomplished simply by being more aggressive, adversarial, ruthless and mean-spirited. Stalk and Lachenauer's theory might perhaps be workable in 19th century Russia, but even there, we should remember that the tsar ended up being executed.

Bottom line

There is a reason why the environment of the earth is not filled by big, fierce wild animals that fight each other and every other animal in sight. Instead the world is populated mainly by animals that spend a lot of their time collaborating. The big fierce wild animals are all either extinct or on the verge of becoming so.

The mean-spirited, ruthless, adversarial manager so heavily praised by Stalk and Lachenauer is fortunately almost extinct in the year 2004, and their article is deluded in thinking that the world would be a better place if he were to be resurrected. Their article misses the point that the soft aspects of communication and persuasion -- for instance, through storytelling -- are fundamental to the art of management.

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