How ideas create professions

The Lords of Strategy: The Secret Intellectual History of the New Corporate World
By Walter Kiechel III
Publisher: Harvard
Business Press
Pages: 368
Price: Rs 995

If you are looking for a book on the 10 smart things to do to create a strategy, The Lords of Strategy is not the book for you. It is the history of consulting firms trying to discover the 10 smart things to do to create a strategy. It concludes that they have not yet found what these are.

However, if you are looking for a good book about how ideas develop and with them new professions, this is a great read. It is a very well-written account of the emergence of strategy consultants.

The soundest strategy is to develop the best capabilities for organisational learning and change.

Good strategies have enabled generals to win wars since history began. And good strategies have enabled traders to beat competition for centuries, too. However there was never a band of 'strategy-makers'. Professional strategy-makers for hire emerged with the foundation of the Boston Consulting Group by Bruce Henderson in the 1960s. The Lords of Strategy concludes that consultants are still searching for a paradigm for strategy. In his seminal book, The Living Company, Arie de Geus recounted when he, as head of planning in Royal Dutch Shell in the 1970s, recommended to the board that the company apply the new strategy techniques that consultants in the US had developed, the chairman suggested a pause. He said the outcomes of good strategies could only be known after many years. Therefore, one should wait to see how well the firms that apply these concepts fail. He suggested that de Geus and his team study 'living companies' who have survived and succeeded for at least 100 years. De Geus's study revealed that such long-lasting firms were adept at 'organisational learning'. BCG and other consultants are now coming to the same conclusion, says Kiechel.

In a global and dynamically changing world, with competitors emerging from other industries and other geographies, those organisations which learn faster and change faster than any potential competition will survive. Therefore, the soundest strategy is to develop the best capabilities for organisational learning and change. This insight, that de Geus, Peter Senge and others have, has resulted in 'organisational learning' emerging as a new discipline. In the organisational learning profession the best consultants are those who enable their clients to realise their aspirations by learning and improving their capabilities. However, such consultants have so far been looked down upon as mere 'facilitators' by 'strategy' consultants who pride themselves on the brilliant ideas they give their clients.

Of all the assets an organisation has, only people can learn. Indeed, people can improve not only their own capabilities but the other assets, too. Consulting firms themselves are learning organisations. The best of them are global learning organisations who know that their only assets are their people. In fact, even though one may not learn the 10 things to do to develop a great strategy from strategy consulting firms, according to Kiechel, one may learn a lot from the way these firms are organised about how to manage people and organisational learning. But that must be another book.

Arun Maira, an author and member of the Planning Commission, was Chairman of BCG India until 2009

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