Pharmaceutical Executive Europe - June 2008 - (Page 13)

Pharmaceutical Executive Europe June 2008 Stratergy Fundamentals 13 Hidden in Books In the first of a new regular column, Dr Brian D. Smith looks at the value of management science to real-world pharmaceutical executives. n the movie Lake Placid, the clever scientist reveals some important scientific fact to help in their hunt for a giant crocodile. Her foil, the improbably stupid country policeman, asks how she knows this stuff. “The government hides that sort of information,” she teases him, “in books.” The joke often springs to mind when a senior executive in one of my research cases explains the pressing problems facing the company. Often, the answer they seek is hidden in books. That’s not strictly true. You can’t open a management text and find the instant answer to a complex, multi-dimensional problem about strategy or organisational effectiveness. But the answers can be found by looking at good, reputable management research and theories that have stood the test of peer review. And therein lies the problem. For many practising executives, theory is a pejorative term, synonymous with academic ivory towers and impractical, abstract concepts. That is a shame, because, as Kurt Lewin famously said, there is nothing so practical as a good theory, and there are many good theories that could really help executives raise their game if only they could overcome their instinctive scepticism and tried to apply theory in practice. Take the example of a firm I’m working with at the moment. Their strategy-making process is slow, laborious and ineffective. They spend huge amounts of time in meetings, with decks of hundreds of slides, eventually coming up with the same ideas as their rivals. Could ‘theory’ help them? Well, at least three bodies of research spring to mind: ● the strategy content literature, which shows them what a strong strategy looks like; ● the organisational culture literature, which helps explain why they behave they way they do; and ● the motivation literature, which explains what makes employees want to make it happen. Armed with this knowledge, their problem has become less intractable and more explicable. They can now see what the desired output (a strong strategy) has to look like, what is stopping them get there and how to lead their key people to the solution. Unsurprisingly, this has made solving the problem much easier. I So why don’t managers in the real world use theory more? Many of my research cases have attempted to apply theory but have failed and become still more cynical. On close examination, their failure usually arises from some combination of three factors: ● They misunderstand what theory is, thinking it is an untested hypothesis. In fact, good theory is an explanation of the real world based on multiple observations of what happens in practice. Academics don’t really invent theory; it emerges from what their observation of real managers in real firms. ● They half understand theory. Often, consultants or MBA-qualified managers who have read something about a theory think they know enough to apply it in practice. In fact, applying theory is more like playing a musical instrument. Anyone can make a noise, but to make music takes deep understanding and years of practice. ● They seek panaceas. Under pressure to get results, senior executives often look for ‘the answer,’ but to solve real-world, multidimensional problems requires ‘walking around the problem,’ looking at it through the lenses of several different theories and synthesising an answer. So what should managers do? They should mimic their scientist colleagues by looking for the theory that explains their problems. Like good scientists, they should be sceptical of panacea answers and they should weave together ideas from multiple, complementary bits of research. Most of all, they should accept that whilst their problems are unique in detail, the fundamentals of it have probably already been researched and some answers suggested. And those answers are often hidden in books. About the Author Dr Brian D. Smith is a researcher, author and consultant in the field of competitive strategy and runs PragMedic, a specialist strategy consultancy. He welcomes comments and questions to brian.smith@pragmedic.com.

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - June 2008

Pharmaceutical Executive Europe - June 2008
Contents
From the Editor
News and Analysis
Calendar
Brussels Report - Tell Us Something We Didn’t Know
BioFutures - Friends, Acquaintances and Strangers
IT Matters - The High Cost of Swimming Upstream
Strategy Fundamentals - Hidden in Books
Corporate Strategy - New Dimensions for New Business Models
Special Report: Making the Leap
Sales Force Incentives - The Goal: Setting Goals
Last Word

Pharmaceutical Executive Europe - June 2008