The tone for the critiques was set several years ago by Jack, an executive from Venezuela. Between the second and third year of the program, as pressures from Hugo Chavez’s government increased, Jack’s business suffered; it lacked a clear growth path. He came back for the third year anyway, and as he dealt with his own challenges, he became a major presence in the class.
Jack was a regular at the pre-class lounge sessions, which often went on well past midnight. Students came there to test out their strategies with me and whoever else was interested, and often 30 or 40 people would show up.
Jack took the seat next to mine, night after night. He asked each presenter the same question: “What are you doing that’s really distinctive?” Sometimes he’d put it as I did in class: “Help me understand why your business really matters.” And he kept after them until they gave a thorough answer. By the end of those sessions, everybody had internalized those questions. I came to feel that this process was the heart of a strategic conversation. A leader builds a strategy through in-depth conversations with a group of his or her peers, testing the ideas against a variety of situations. Knowing how to do that well will serve the graduates better as leaders than any particular plan they develop at Harvard Business School.
S+B: Are you saying that in a well-run company, the CEO should have a group of senior executives who play the same questioning role?
MONTGOMERY: That’s right. And yet that’s not the way it works in many companies today; business heads make presentations, but often they’re choreographed ahead of time, and they often don’t question their peers as much as they could. I’d like to see the managers at all those meetings raise the game by challenging one another.
A strategy shouldn’t be only a document, or an occasional exercise. It should be a way of looking at the world, interpreting experience, and thinking about what a company is and why it matters. The formal strategic planning process is only part of it; the deeper responsibility is ongoing and continuous. I often refer to a quote from the great 19th-century Prussian military strategist Helmuth von Moltke: “Certainly the commander in chief will keep his great objective continuously in mind, undisturbed by the vicissitudes of events. But the path on which he hopes to reach it can never be firmly established in advance. Throughout the campaign he must make a series of decisions on the basis of situations that cannot be foreseen…. Everything depends on penetrating the uncertainty of veiled situations to evaluate the facts, to clarify the unknown, to make decisions rapidly, and then to carry them out with strength and constancy.”
That’s the job of a business strategist, no less than a military commander, and it’s a challenging balancing act—an ongoing, not a periodic, responsibility. Unfortunately, that’s not the way strategy is generally taught in business schools, and it hasn’t been for a long time.
The Capstone Course
S+B: How has the teaching of strategy changed?
MONTGOMERY: Back when I was an MBA student in the 1970s, strategy at most schools was taught as part of a course called Business Policy and General Management. It was thought of as the capstone course; it came last in the sequence, after marketing, finance, production, and organizational behavior. Having seen all the pieces, the student was supposed to put them together. The course combined thinking and doing, strategy formulation and strategy execution. The main textbook, Business Policy: Texts and Cases, was written by legends in the field: C. Roland Christensen, Joseph Bower, and Kenneth Andrews [Irwin, 1965, rev’d. 1982]. The very first chapter was called “The Presidential Point of View.” Another major section was called “The Accomplishment of Purpose.” To this day, I tell the executives I work with, “If someone asks you what you do for a living, just look them in the eye and say, ‘I’m an architect of organizational purpose.’”