This week, I picked up some marked coursework from Scott Moeller. He had asked us to provide a 600-word memo about our learning from a merger and acquisition simulation that he had conducted on a Saturday. The class had been broken up into teams representing: the target company, a potential trade buyer/merger, a private equity fund buyer and an arbitrageur. Each member of each team had to write a memo on the successes and failures of the experience. Post-M&A knowledge capture, as it were, and the audience was the executive board of the respective company.
I was happy with my score. But one of the feedback items struck me. To meet the concise word count, I had presented my observations as pithy bullet points. Scott’s annotation was simple and to the point “Is this in any order of priority?”
Other than brevity, sequence and priority are two of the few things that a list of bullet points can relay. It was a silly oversight, but in a typical reflective moment, I started to think about all the other shortfalls of my list. This musing was not a luxury; I knew that it would help with the strategic planning exercise I’m tackling during the working week.
Lists are problematic.
- Missing interrelationships. A strategic plan is awash with lists of activities. The problem is that a list of tactical actions leaves critical interrelationships unspecified. If we have chosen a different point on the compass, yes we need to reset the mainstay, but not in isolation. Each activity should be tailored to the value proposition and amplify/reinforce the value of the other things we do, as Porter would point out.
- Too generic. Lists of bullet points are typically too generic; that is, they could apply to any business. Grow this division by 15%. Reduce costs of a sale by 3%. This is all well and good, but it fails to explain the company’s rationale of winning in the marketplace. Bullets allow us to skip the thinking step, tricking the writer and reader into thinking that this is good planning, when, in fact, it might just be a list of some good things to do.
- Lack of context. Bullets leave critical assumptions about how the business works (and wants to work) unstated. Such lists don’t provide sufficient context for the activities to help the reader determine what s/he should work on now. And what’s more, if there is a sudden requirement to reallocate resources, the standing list of activities does not explain what are the right things to do in their place.
- Too much choice. And finally, my mind is brought back to Barry Schwartz’s ‘paradox of choice’. The pithier the action, the more of them you can include, thereby creating more choice. The greater the choice of activity, the greater the negative emotions because our sense of opportunity cost increases. The negative emotions can paralyse (see jam jar example in week 47’s animation) one into maintaining the status quo, or just lead you to focus on the easier activities for the positive feeling that comes from crossing an item off a list. Tougher items may have to wait for a long, long time.
So, from the list above, I will choose to focus on counteracting the problems inherent in items 3 and 4, because I think that there is a interrelationship between items 1, 2 & 3 that would allow me to cover all bases. And in the context of strategy planning, my recommended solutions will be:
- to prime any list of bullet points with a set of key underlying drivers, and
- to incorporate a commitment device into the activities, such as bespoke, reward-linked personal plans, that reduce the sense of choice.