Strategic Thinking beyond the Business Plan

“When smart people came up with ideas for well-conceived business opportunities, we said go for it. As always, organizational charts, management consultants, and business plans played virtually no role in any of this. My own strategic thinking I did mostly while showering or shaving.”

—Alan C. Greenberg, former Chairman and CEO of Bear Stearns

Similarly, when I write an essay, I inevitably pass on first constructing a formal outline and go instead off of what I have worked out in ratiocinating while exercising, in transit, or showering. Freeing the mind up to search for and try out connections between ideas, and working a theory over and over—like kneeding dough or forming a clay pot on a wheel—are inconsistent with too much structure.

The human mind needs its own space to solve abstract or applied problems needing considerable thought. Subjecting the processes of theory-construction and problem-solving (“critical thinking”) to too much structure is simply not in line with the nature of the mind itself. Human reasoning, it turns out, is not a linear process that necessarily fits within the confines of a business plan or consulting diagnostic tool. Particularly if creativity and innovation are to be encouraged, mechanistic structure must succumb to organic process.

For example, I did a consulting project as part of an organizational design senior seminar that I took in college. The professor had developed a structured organizational audit—a diagnostic tool geared to detecting discrepancies between an organization chart and actual communication. As he had developed the instrument, we were naturally to rely on it in making our recommendations to the clients. I used the tool on a computer retail store and proffered recommendations from it. Because the business was family-owned and operated, I could see that the communications were in part a function of the family dynamics, which the professor’s organizational audit failed to pick up. So I asked some additional questions and made some supplemental recommendations, which the business owner/manager found quite useful—unlike those that came from the audit.

Even though the professor graded me lower for adding the recommendations, the client went so far as to call him to urge that an A be given to me for the project. From what the client told me later, the professor was perhaps too attached to his “organizational audit” tool (which he used in his own consulting practice). My orientation as a novice consultant was neither to my grade nor to the tool; rather, I wanted to help the owner/manager by proffering him insight that he could use to solve his problem. Although I cannot be sure at this point, I might have come up with my final recommendation to him on the way to a class, during a run, or even while shaving.

So I can totally understand Alan Greenberg’s aversion to organization charts, business plans and “professional” consultants. A true consultant comes from a perspective of expertise that clients do not have. For example, a consultant could be an academic or a nearly-retired practioner. In either case, the advice should be viewed as supplemental to the client’s focal situs “on the ground”—that is, consulting advice is something for a client to digest and possibly integrate with his or her larger considerations outside the range of the consultant.

Being geared to helping a client, a consultant should be able to let go of his or her “black bag” if the tools therein fall short in diagnosing the organizational dysfunction, or “illness.” I suspect that one's “gut” can come into play, effectively transcending the mechanistic tools, only if the consultant cares, because only then is he or she intrinsically oriented to the client’s situation rather than the consultant’s own bag of tricks as ends in themselves. In the end, consulting is interpersonal—helping others who are suffering from a problem. Such problems typically involving human beings, it should be no surprise if a consultant should approach them from more than one level.

Therefore, both strategic and consulting thinking ought to be accommodated in the sense of giving them some organic free range. Treating business plans, organizational charts, and diagnostic tools as ends in themselves, as if they were rational beings (i.e., Kant's kingdom of ends), is ultimately self-defeating, if not suffocating. Just as managing can sometimes be informed by simply wandering around, so too the strategic mind needs some room to roam.  

Source:

Alan C. Greenberg, The Rise and Fall of Bear Stearns (NY: Simon & Schuster, 2010)

A Subtle Conflict of Interest in Obama’s Nominee for FDA Commissioner

Robert Califf, U.S. President Barak Obama’s nominee in 2015 to head the federal Food and Drug Administration (FDA), had received consulting fees of roughly $205,000 between 2009 and early 2015 from drug companies and a medical-device maker.[1] He donated the money he had made since around 2005 to nonprofit groups, and he had ceased all such work before he became the FDA deputy commissioner for medical products and tobacco. The question is whether he would have a conflict of interest in taking the helm at the regulatory agency that puts the public’s interest above those of the regulated companies. I contend that such a conflict is indeed entailed, though not on account of the money he received or any relationships he had developed with people at the companies.

As a clinical-trial researcher at Duke before joining the FDA, Robert Califf was a founder of the Duke Clinical Research Center Institute, which helped pharmaceutical companies run clinical studies. Such facilitation is oriented to helping companies, and, if ethically done, ultimately to helping the public too. In other words, he was not oriented to an area in which the respective interests of a drug company and the public are apt to be at odds. He could thus safely assume a mentality favorable to the companies. Such a mentality is at odds with that of a regulator of companies. Government regulation itself presupposes a tension between the interests of the regulated and the wider public. The mentality fitting the regulator’s role puts the public interest above the interests of the companies possibly to be regulated or already being regulated. A regulator, or an entire agency, captured by one or more of the companies being regulated, regulates sub-optimally because the public interest is valued less than a private interest (including the regulator’s own personal interests).

Public Citizen, a nonpartisan public-health group, urged the U.S. Senate to reject the nomination because “it would accelerate a trend of FDA decision-making that is more aligned with industry than with patients.”[2] Interestingly, the group did not highlight the fact that Robert Califf had received money from drug companies for consulting work, such as participating at an AstraZeneca employee-education session about cardiovascular disease. Rather, the complaint is oriented to the impact of a mentality aligned with the drug companies.

In the language of conflicts of interest, a regulator acting in line with his or her mentality assumes one role. Acting in line with the public interest above that of company interests to the contrary, can be considered another role. Both roles pertain to the regulator’s exercise of his office—for our purposes, the FDA Commissioner. The roles conflict. Robert Califf could reasonably be expected to be tempted to make decisions in line with his mentality (i.e., a private benefit to himself, and a broader private benefit to the companies involved) at the expense of his office’s duty to put the public interest above the two private interests (which include that of his mentality, or orientation). Herein lies the personal conflict of interest—personal in that he could be expected to be tempted on an ongoing basis to put his personal mentality (i.e., a personal benefit, psychologically) above the duty of his office to put the public’s welfare first.

To be sure, we cannot assume that Robert Califf would give into the temptation as Commissioner of the regulatory agency. Sanjay Kaul, a cardiologist, asserted that Califf had demonstrated his ability to act with independence. “Even though I have not always agreed with him on many issues, I respect him for his intellect and integrity. There is no doubt in my mind that he will leverage his inside knowledge of how the industry works to promote innovation without compromising public safety.”[3] Although I suspect that Kaul overstates the congruence of the respective interests of the industry and the public, we cannot assume that a predisposition to help drug companies necessarily wins out.

Even so, I contend that to have a person with a mentality or at least habit of helping companies in the regulated industry as a regulator necessarily involves an ongoing tension for the person, and furthermore that submitting said person to such a tension (or temptation) is itself unethical because of the subtle harm done on him or her. More simplistically, a regulator ought to have a mentality or bias that is aligned with putting the public interest above the interests of the regulated.

Even a subtle bias gained from substantial work-experience, which itself points to an underlying orientation and may even extenuate it, can be reckoned as a personal role. That role can be in tension with another role to be performed—a role oriented to a wider-held benefit (e.g., that going to the public). A personal conflict of interest can therefore exist even without any hint of personal financial benefits (e.g., bribery, extortion, etc.) being likely in a person’s position/office. Even as we tend to limit our recognition of personal conflicts of interest to the superficial level of money—such conflicts being much more extensive—the good news is that more of those conflicts are avoidable than we surmise. Merely in matching a mentality or predilection of a potential office-holder to the role having a wider rather than narrow distribution of benefits (i.e., acting for the public welfare), we can reduce the incidences of such conflicts.

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[1] Drug companies spent an additional $21,000 reimbursing the cardiologist for travel, meals, and other expenses. Joseph Walker, “FDA Nominee Received Industry Fees,” The Wall Street Journal, September 19-20, 2015.

[2] Ibid.

[3] Ibid.