The Reality Test: Still relying on strategy?
Profile Books, £12.99
Q: What’s the central argument of The Reality Test?
A: Most organisations are obsessed with strategy but it’s not strategy that really makes the difference to whether an organisation does well or badly. There are only a few strategies out there -get bigger, get smaller – and not enough variables to explain it. Reality is much more diverse than strategy takes account of. The reason a business fails is because its leaders are squabbling amongst themselves, or it runs out of energy. Conversely, the reason a business succeeds is because it has grown up conversations with its leaders. Lots of problems are rational, political or emotional, which strategy does not take account of.
Q: Who have you written the book for?
A: A business leader but I would interpret that in a fairly broad sense. It does not necessarily mean a FTSE 100 chief executive – it’s anyone who has a significant amount of responsibility, whether that’s running a small business or a large corporate division. It’s someone who takes overall responsibility and wants the widest possible perspective of a company.
Q: What would you like readers to take away from The Reality Test?
A: It’s to ask themselves the kind of questions I’ve put in the book, so that they can look at their business though the eyes of an intelligent lay person rather than as a strategy person. It’s to step back and reflect from that intelligent, naïve perspective as opposed to a specialist perspective. It’s also to have a conversation, without lots of charts, in the boardroom about what the real issues of the business might be and what needs to be done to fix them.
Q: Why did you write The Reality Test?
A: A lot of advice given to businesses is the advice that advisers think they should give on strategy. In fact, a lot of that advice is obvious and not that helpful. The most helpful advice is giving a sense of what is really going on in the business. I also wanted to make a record of the past 15 years worth of work I’ve done as a consultant before I get so old that dementia sets in.
Q: What’s wrong with strategy?
A: I think that there are two problems with strategy. First, that it’s purely rational so excludes the political and emotional reality of business. Second, because strategy is predicated on the future, it doesn’t yet exist. It’s much better instead to take your cue from the present and the past. There is also a certain machismo associated with strategy – the ‘look at me, I’m the big strategy guy’ way of doing things. It’s interesting that actually most businesses don’t often have a strategy person on the senior management team; it isn’t a key thing. The thing about strategy is that it’s teachable, rational, and can be reduced to a set of PowerPoint slides that is reassuring for analysts. You can’t not have a strategy but you have to have a balance.
Q: An academic by training, why are you so interested in the world of business?
A: When I left Oxford University in 1998, I had been there for 13 years and was ready for a change from the abstract to something more concrete.
Q: What other projects are you working on right now?
A: I’ve got a new project on ‘ennovation’, which is much more psychological. I’m trying to work with the organisational unconscious – the sources of energy in an organisation that remain hidden, and how to tap into them.
Q: Do you have any other books in the pipeline?
A: Yes, another philosophy book on what it means to be a human being…
About the author:
Robert Rowland Smith was for seven years a Prize Fellow of All Souls College, Oxford, where his work on philosophy, literature and psychoanalysis was described by Jacques Derrida as ‘superbe’. He now advises blue-chip companies and government departments, teaches at London’s School of Life, and writes, among other things, a column on ‘life lessons’ in the Evening Standard and a regular column in the Sunday Times. He contributes to the Philosophy Bites podcast series and speaks regularly on BBC radio.
His book The Reality Test is published on the 5 September 2013.