Buytendijk, Dealing with Dilemmas, part 1: big-picture issues

As readers of this blog know, I often look for insights in books that were not written with investors and traders in mind. Most of the time my search comes up empty. But now and again I hit pay dirt. Frank Buytendijk’s Dealing with Dilemmas: Where Business Analytics Fall Short (Wiley, 2010) is my latest discovery. I’ll devote two posts to his ideas.

Buytendijk, currently a vice president and fellow at Oracle responsible for “thought leadership,” sets out to counter the obsession with analysis. Why, he asks, are there so many analysts and no synthesists? Especially since synthesis is particularly useful in dealing with “something more fundamental than a straightforward problem—such as a dilemma.” (p. xv)

“A dilemma can be defined as a situation requiring a choice between equally undesirable or unfavorable alternatives. It is a state of things in which evils or obstacles present themselves on every side, and it is difficult to determine what course to pursue. … Whatever decision you take, there is an unacceptable downside.” At the same time, “a dilemma is an opportunity to fundamentally solve a problem, as understanding the dilemma lifts you to another dimension of insight” (p. 3)—an echo, duly noted, of the thesis-antithesis-synthesis process of Hegelian dialectic.

Buytendijk focuses on strategy management (formulation, implementation, and performance measurement). A strategy, understood informally, is “an action plan to achieve the organization’s long-term goals.” (p. 14) Does this mean that strategy is about making big choices? The author suggests that a better way to think about strategy is to view it as “creating a portfolio of options,” somewhat akin to a portfolio of stock options. “Options, as opposed to choices, do not limit our flexibility in the future; they create strategic flexibility.” (p. 16)

Creating options, of course, does not preclude making choices. “You cannot have a contingency plan for every possible future; not making any choices at all, while trying to go along with everything that passes by, leaves you unfocused and most probably unsuccessful. The trick is to make the strategic choices that create the right options.” (pp. 32-33)

Buytendijk describes six quintessential strategy dilemmas that businesses face: value/profit, inside-out/outside-in, top-down/bottom-up, listen/lead, optimize/innovate, and long-term/short-term. He then introduces the image of a strategy elastic to visualize how businesses are dealing with these dilemmas. “Creating strategic stretch is very much like working with an elastic band. If you pull it from only one side, the other side will move along in the same direction. You can stretch it only if you pull it from both sides. And the harder you pull in multiple directions at the same time, the more space you create, which is the objective of strategic management. The metaphor of an elastic band is particularly appropriate because it implies you cannot stop pulling; otherwise, the elastic band goes back to its neutral position” which translates into average results for the organization. (p. 69)

These are some big-picture issues that managers in every kind of business face, whether it be manufacturing or financial, large or small. If you haven’t given them any thought, perhaps it’s time to reevaluate how you’re managing your business.