Adventure of Strategy

Anybody with the slightest training or even interest in business strategy is probably familiar with Michael's Porter's famous 5 Forces Model. It would be no exaggeration to say that this model fundamentally re-defined the field when it was first published back in 1979. Here's a link to a short interview with him (12:57 minutes) on the relevance of the 5 Forces in today's world. Well worth watching. The page also has a link to an article by Michael Porter in the January 2008 Harvard Business Review, updating his model.

Click here for the video

At 3 PM on September 4 1882, Lower Manhattan was transformed as Thomas Edison’s spectacular, cutting edge electric illuminating system went into operation. The American public was astounded at this revolutionary new energy supply. Clearly, it was only a matter of time before it would take over as the primary energy source in industry too.

So it did, of course, but four decades later, only half of America’s factories were fully electrified. Why did it take so long for a clearly superior technology to establish itself?

The reason is simple:  The very best, state-of-the-art factories at the time (the product of a century of refinement and innovation through the course of the industrial revolution,) were designed in such a way that electricity provided little advantage. Unlike today’s factories, where every piece of machinery has it own electric motor, factories at the end of the 19th Century were designed around central energy sources. Machines were powered by elaborate systems of pulleys and shafts called “group drives” that transferred energy from the central source (typically a water turbine or steam engine) throughout the factory. The most efficient way of doing this was to minimize the length of the drives. Factories, as a result, were multi-storey buildings with one or more shafts per floor, each driving a group of machines. The entire factory, in effect, was designed around the limitations of the power supply.

So what use was this newfangled electrical energy? Initially, it was used to provide lighting and steam/water turbines were replaced with central electrical motors. Electricity only came into its own when a new generation of factory buildings started being built, where machinery could be arranged and rearranged to optimize production line efficiency. These were typically sprawling, single storey plants. Small, efficient electrical motors powered each machine independently. Electrical wires replaced the cumbersome group drives. There were no more awkward steps and elevators to navigate between floors.

Replacing the factory buildings was a slow and expensive process, however. One does not simply through out such capital investment and the know-how built up over a century or more.

This little case study provides a valuable lesson in how innovation progresses in law firms too. Many of the great ideas out there today provide little advantage to law firms as they are currently constituted.

The Chairman of a very prominent national US law firm mentioned in a conversation that we were having recently that except for the computers, there is little difference in a law office today, to what existed 50 years ago. The arrangement of offices, structural hierarchies and suchlike are still “just as they always have been.” Other practices like hourly billing and aversion to alternative work arrangements would fall into the same category. This is  more than just generational differences in perception between Baby Boomers / Gen Xs / Gen Ys. The changes that people talk about today are challenging the very foundation of the way in which legal services are being provided to clients.

The good news is that just as electricity was around for 40+ years before it was fully adopted, so many of the solutions to the problems facing law firms today are also out there, in plain sight, in the market. The challenge is not so much in finding the solution, as in overcoming the corporate inertia of the firm’s business model, to get those solutions implemented.

Billing by the hour a problem? Fine … replace it with value pricing or risk sharing models. But how does one actually do that with the same ease as filling in time sheets? (My view on the billable hour is that it is an excellent example of something that will eventually go the way of the dodo, but first the "factories need to be reinvented.")

“Generation Y’s” want flexible work arrangements and a work/lifestyle balance? Fine … let them work from home and other remote locations. But how does one actually do that while maintaining teamwork and service quality?

You want to be able to harness the combined intellect of your firm whenever necessary, to craft strategy, to develop virtual client teams, to share knowledge? Fine … create an online collaborative system using one of the emerging Web 2.0 internet based tools (see here and here.) But how does one actually do that in an environment where there is deep suspicion about such tools?

Performance levels differ widely amongst individual lawyers and sometimes, truth be told, some (ever more expensive) junior associates do better work and are more valuable to the firm than some of their senior colleagues. Fine … develop a system that easily measures performance and links it to reward in a way that is seen to be transparent and fair. But, how does one actually do that where the hierarchy of partners and associates/assistants developed over a century is heavily entrenched, true performance is difficult to measure and compensation discussions are often a source of considerable stress?

Some firms are quicker than others in developing ways to implement solutions. Market changing revolutions that effectively deconstruct the environmental parameters of a profession, like those that will follow final enactment of the Legal Services Bill in England and Wales will catalyse a whole slew of innovations and firms elsewhere would do well to watch those in England carefully. Likewise developments in Australia. Sometimes, there may be some “first mover advantage” for firms that adopt new practices quicker. More often that not, though, it is the “second mover” that gains the real advantage. Innovations are typically adopted sequentially. First: by small, fringe firms with entrepreneurial leaders and less corporate inertia. Second: by market leader firms that can afford to “try” something new without the change (or possible failure) being threatening. Last: by the mainstream in the middle, who are driven (rightly, in most cases) by precedents.

If you are a leader in a mainstream firm, the key is therefore to constantly be a thoughtful observer of what your competitors are doing and what your people are saying. Then, to have the courage to shamelessly “steal” the best ideas that others come up with and build them into your firm.

Hat tip to Alan Greenspan, who wrote of Edison and the adoption of electricity in industrial America in his book The Age of Turbulence: Adventures in a New World, on page 474-475.

Business Pundit's post by Rob May, titled Why The Dunning Kruger Effect Is Ruining Your Business, provides a new perspective on a phenomenon that I blogged about some time ago, that bears repeating:

"Those that are most confident are often the least competent."

Rob May takes this a step further, explaining how the Dunning Kruger Effect explains why most people think they are worth more money than everyone else they work with, even when the evidence is firmly to the contrary.  In the absence of concrete performance metrics, many under-performers genuinely believe that their performance is better than their peers in the firm. Even when fixed performance criteria do exist, though, they still often explain their shortcomings away by insisting, sometimes most eloquently, that their under-performance in one area (e.g. low billing / poor client satisfaction / bad interpersonal relationships within the firm) is outweighed by stellar performance in other (usually difficult to measure) areas. The collegial, conflict-averse culture of many law firms (and firms in many other professions too) makes it very difficult for them to even have frank discussions around this topic.

This can be a real problem where the end result is that those that contribute most to the firm find themselves under-appreciated and the "confidently incompetent" are disproportionately rewarded. Inevitably, resentment sets in.

What to do about it? There are a few pointers in my previous post on this topic, courtesy of the Department of Psychology at Cornell University.  Rob adds these three:

1.    Use as many measurable standards of performance as possible. Even idiots have a difficult time refuting concrete performance goals.

2.    Encourage dissension and debate. This is tough, because if this is not handled properly, it can build a culture of negativity and risk aversion. Your goal shouldn't be to avoid risk, just to expose and understand it.

3.    Show confidence in your best employees, even when they don't have confidence in themselves.

If any of this resonates with you then, whatever you do, please don't wait until you are staring at the letter of resignation from one of your under-appreciated star performers before you grasp this nettle.

OK, as co-inventor of the term brainswarming (and proud of it!) I am probably the last person that should be pointing out new jargon, but here's some that has even my tongue in a knot.

Frenemy? Froe? Ouch!

Note, though, that the terms also originates from EAST of the Atlantic, not the oft-maligned (for jargon invention) US of A ... and from one of the top minds in the strategy business. That is: Sir Martin Sorrell, founder + CEO of global marketing and communications giant, WPP.

A very sound idea underneath, too. Read Bill Taylor's Harvard Business article The New Language of Competition to see why. Bill is former CEO of Fast Company. His book Mavericks at Work: Why the Most Original Minds in Business Win is one of the best business books that I read in the past year. Here's a 'sound-byte' from his article:

"... the most striking insight came from Sir Martin’s discussion of the competitive dynamic between his firm—a global marketing powerhouse—and digital powerhouses such as Google. One participant wondered: Are the new Internet giants allies of or rivals to marketing giants such as WPP?

Certainly, Google is a business partner of WPP, Sir Martin replied. (In fact, WPP is Google’s biggest customer.) At the same time, he explained, Google aspires to play a bigger and bigger role in how advertising works, from print to radio to the Web. In other words, the Internet giants are both friends and foes—or “froes,” to use Sir Martin’s phrase. They are both friends and enemies—or “frenemies,” to use his other phrase.

Think about it:

Do you have competitors whose absence would harm your business? Perhaps because of some relationship that your firm has with them; equally possibly just because they are there, influencing the market in their own way? So much corporate strategy is premised on blunt "win-lose" assumptions. In the race to "win," synergies and cooperative dynamics (that adversarial competition often kill) are overlooked. In today's complex and ever changing world, that's myopic. Today's competitor, all so often, is tomorrow's ally.

On second thoughts, maybe the terms aren't quite so bizarre after all ...

An article in IT Week in the UK this week titled Web 2.0 Confusion Hindering Firms reports on research that has just been completed by IT consulting firm Parity, into levels of understanding of Web 2.0 tools in organizations. In many ways, it read to me like similar research results about understanding of the importance of the internet to business, back in the early 1990s. My interest in IT is limited to its application to strategy and its impact on strategy in the firms that I serve, so IT Week is not on my usual reading list. The heads-up came from a new "intelligent" current affairs search tool that I am test driving, called Silobreaker. (More on this once I've "driven" it a bit more. Looks promising, so far.)

In any event, nearly half of senior managers polled did not understand the benefits of promoting Web 2.0 in the workplace and a third of IT managers said they lack understanding of this new area of technology. But .... of those who did find benefit in using Web 2.0, over half said they were able to work more efficiently, or could work together across different locations more easily.

HR staff are apparently similarly uninformed about Web 2.0, according to a different research project by security firm Clearswift. They found one in five HR decision makers are unfamiliar with Web 2.0 phenomena like social networking sites, and 65 percent said they deny employee access to these sites. Half of those surveyed said they have had to discipline staff for time wasting on the internet.

John Court, an IT manager for law firm SJ Berwin LLP, said it is increasingly difficult for his IT team to distinguish between personal and business usage and said end-user education and awareness raising about the impact of using such sites is key.

Yes, Web 2.0 tools are indeed still very much at the front edge of the curve. As with so much innovation, the first adopters amongst law firms [a couple of years ago, now] were fringe firms who had people passionate about technology to champion the idea. They were followed by the global leaders, who saw the potential and had the critical mass to give a new idea a try without fear of significant consequences if it turned out to be a waste of time. Allen & Overy and Linklaters are two that I have some personal knowledge of in this area, that have made great strides in building Web 2.0 concepts into their firms. That leaves those "in the middle." Not that this, in itself, presents a problem. There is much to be said for learning from the successes and mistakes of others.

One thing is for sure, though:  Web 2.0 and its new approaches to how firms work (like brainswarming, for instance) are here to stay. If ever there was a trend to watch, it is this one. One does not need to be amongst the first to adopt the new approaches (it's too late for that now, anyway) .... but it would not be a good idea to lag too far behind the pack, either.

As promised, attached are the slides from the London meeting of the Managing Partners' Forum, held yesterday at the offices of Grant Thornton in Finsbury Square. They are basically the same slides as from the meeting at White & Case LLP in Manhattan on the 18th of October, except that the UK rather than the North American data is at the forefront. The count for the number of downloads of the New York slides now stands at 733. I'd be fascinated to hear from some of you, about what you think the questions to the questions posed might be, and what your overall views are. For me, the survey results yield more far questions than answers.

We'll be continuing the research project in the next few weeks. The further surveys will be shorter and focused on particular issues that the initial survey indicates to need further investigation. If you are a leader in a professional service firm, please watch for the invitation to participate. Hopefully we will start getting significant participation from firms outside the USA and UK in future surveys, too.

Download file

The World Economic Forum has just published a series of scenarios titled The Kingdom of Saudi Arabia and the World: Scenarios to 2025. The link gives an overview of the study, a link to the executive summary and a link to a video interview with Nicholas Davis, one of the scenario planning experts involved in the study. (Hat tip to The Bayesian Heresy.)

Scenarios are a vastly underrated tool in the strategist's toolbox. Clifford Chance went through a widely publicized scenario planning exercise in 2005 but beyond that, they are not very widely used in professional service firm strategic planning processes. This is a pity, especially in today's highly dynamic and rapidly evolving markets, and firm's would do well to consider their use more closely.

Scenarios are very useful tools for looking at what may happen. Firms almost always tend to base their strategies on a fixed view, or at least a narrow forecast of what may occur in the future. Their strategic planning processes are also not generally good at considering cause-and-effect more than superficially, or just into the immediate future. As we all know, this raises the danger of unanticipated consequences or a strategy that does not fit with alternative futures that may emerge.

On the other hand, scenario planning really casts the net wide; to explore many different possible futures. Firms can use then use scenarios to test their strategies against this range of alternative futures, some of which they may not even have considered when crafting their strategy.

Scenarios can also make it easier to have uncomfortable discussions about difficult topics. This is because they aim to explore possibilities around those difficult topics, rather than being prescriptive about their solutions. They are really more about exploring the future; not about telling anyone what should or will happen.

Further to my blog posting earlier this week ago calling for a more sophisticated approach to the tools that firms employ to craft strategy, herewith an article to be published in December this year in the Annals of The New York Academy of Sciences. Titled Neurocognitive Inefficacy of the Strategy Process , it holds back no punches when attacking either Michael Porter's 'Five Forces' for that ubiquitous old faithful, the SWOT analysis. Thanks to Stephanie West-Allen for the pointer! Click the title above for a PDF of the unedited manuscript, or click below for a brief summary courtesy of yours truly.

Here's a 'sound byte' :

"The application of purportedly  “rational” tools or techniques or protocols or models or frameworks to the problem of new strategy formation appears overwhelmingly ineffectual. Few, if any, organizations actually obtain new or revised strategy from such efforts. When the genesis of a dramatic change in an organization’s objectives and strategies finally is tracked down, it invariably is the result of an “informal” process, more often than not unrelated to the formal planning effort itself."

Fighting talk, indeed!!! I'm pleased to find yet another person pointing out that the strategic planning emperor has no clothes, though! There is just too much at stake for the firms that we serve for the smoke and mirrors that so often masquerades for a strategy process.

The authors of the paper are Harold E. Klein of the Department of General & Strategic Management at the Fox School of Business and Management at Temple University and Mark D'Esposito who is Professor of Neuroscience and Psychology at the University of California, Berkeley.

My old friend Bruce MacEwen over at Adam Smith Esq has yet another brilliant post on his blog today. (Small wonder he's hitting 300,000 + page views per month!) The post is titled Associate Moneyball. Its about the lunacy surrounding the archaic methods that so many firms still use in recruiting law school graduates. Lunacy, because of the stellar rates that they command from the moment the ink dries on their degree cerificates. Try to join McKinsey & Co and you're probably in for up to five hour-long, mind wrenching interviews including case studies. Not so, with most law firms.

Lake Wobegon is a fictional US town where "the women are strong, the men are good looking, and all the children are above average." It has been used to describe a real and pervasive human tendency to overestimate one’s achievements and capabilities in relation to others. According to a post titled This Just In: General Counsel Less Than Thrilled With Their Outside Counsel on Patrick Lamb's In Search of Perfect Client Service, the Lake Wobegon effect is alive and well in modern US law firms!

OK, I’m just going to come right out and say it. Let’s cut to the chase and face up to a few unpalatable truths:

1.   THE FUTURE IS UNKNOWABLE

Any attempt at predicting it is never any better than a half educated guess, with a better than half chance of being wrong.

Anybody disagree? No?

OK, then ….

How do strategists that develop plans based on assumed, fixed futures (and look very carefully at this one; many that say they don’t, really do) sleep at night!

Guy Kawasaki has a very thoughtful post on his blog How to Change the World, about a new book by Michael Raynor titled The Strategy Paradox : Why Committing to Success Leads to Failure (and what to do about it.) If you are in any way involved with strategy or strategic planning, then you need to read it. (But then you probably know that because you probably subscribe to Guy's blog, anyway.)

Holland & Hart has joined the small but growing ranks of law firms with a dedicated practice group focused on legal issues surrounding climate change / global warming. This according to an article in the Denver Business Journal. I haven't time to search anything like a comprehensive list of other law firms that have established climate change practice groups, but to date they include Pillsbury Winthrop Shaw Pittman, Morrison & Foerster, Davis Wright Tremaine. If your firm also has a climate change practice group, or you know of any others, please post the details in comments below so that readers of this blog can take note.

The Department of Geosciences at the University of Arizona has a truly excellent interactive set of maps, one of the whole world and one of North America, that illustrate the levels of inundation that will occur with different degrees of sea level increase. It is truly terrifying! Even with just a three foot (one meter) increase, for instance, much of Florida disappears. (See below.) Countries like Bangladesh and the Maldives would cease to exist.

Imagine: All the glittering technology that surrounds us in these opening years of the 21st Century will, in a decade or two, be as old-fashioned to our kids as black and white television, typewriters and 1970s style Chevvys are to us.

Predictions are usually wrong. Their fatal flaw is that they are created in the present, which is a paradigm that is by definition, too primitive and ill-informed to fully comprehend the possibilities. (Think of a scientist in 1900 trying to comprehend commercial air travel, mass produced automobiles and the implications of that fellow Alexander Graham Bell’s newfangled invention, the telephone!)

Developments at extreme edges of science can be extrapolated, though, to give at least indications of what the next decade or two might hold. Here are a few things that could emerge in the next ten years, that would fundamentally impact the way that lawyers and many other professionals operate, if they did:

I'm busy reading Solving Tough Problems, an excellent little book by Adam Kahane. Kahane was the architect of the Mont Fleur Scenarios that were developed in South Africa in 1992, just before the formal end of apartheid, to develop a range of possible views on South Africa's post-apartheid future. The proponents of the exercise were the then still black liberation movements, the African National Congress (ANC) and the Pan Africanist Congress (PAC.) The books covers far more than just scenario planning, though. (Important though scenario may be as a tool in the strategist's toolkit.)

Some while ago, I sat in on a presentation on another management consulting firm’s strategic plan. Perfectly legal – no Watergate tapes here. I was simply present in the room. Basically, the plan was as follows:

“We’ll create a series of presentations to show prospective clients how hopelessly they are managed and how pathetic their performance is relative to the top performers in their market, and then show these to them. Obviously, this will make them fall over themselves to hire us so that we can make them into Olympic athletes too!

Then, in a few years, we can persuade somebody to buy us for a truly stupendous figure, and we can all retire.”

The strange thing is just how common the strategy reflected by the second paragraph is. I bet you can think of several firms you know that, explicitly or not, follow it. (Hopefully, your own firm is not one of them!) The thinking even has a name: Chinese Math.

A new year beckons! What do you plan to do in your firm, in 2007?

Are you contemplating going out into the market, to hire brilliant individuals away from your competitors, to let the magic of Dream Teams loose in your firm? If so, be certain that the magic that is released is not black magic! You may first want to read a piece by Geoffrey Colvin titled When Dream Teams Fail that was published in Fortune recently.

Dream Teams are a beguiling idea. Assemble a team made up of the very best brains and success will be assured, right.......?   All too often:  No, not really.

I have discovered another kindred spirit in the form of Eric D. Beinhocker, author of The Origin of Wealth and Senior Advisor at McKinsey & Co. His article at Harvard Business School Working Knowledge, Creating Strategy in an Unknowable Universe, is worth reading carefully, and then reading again.

One of the worst things that can be said of any professional practicing in a professional service firm is "he/she doesn't fit in here." Career-wise, it's often a death blow. This is particularly true in the precision-based professions such as law and accounting (as opposed to creative/design professions, where deviancy is more tolerated and sometimes even encouraged.)

Herein lies a clue as to why these firms often experience such difficulty innovating or even changing. Probably without even realizing the impact of what they are doing, they positively stamp on anything or anyone that goes against the norm.

David Maister's material is always solid and worth noting, but every now and again he comes up with something that transcends even this and produces a piece that is both fundamental and truly profound.

His recent posting titled The End of Apprenticeship is an excellent example. The implications of this shift in the way that people are managed (or not) as they progress (or not) through their careers is strategically disturbing. The resulting distractions and talent leakage wreak havoc, at the very least with a firm's ability to execute strategy.

While competitive intelligence (CI) has long been a standard tool in mainstream industry and in consulting firms, it has only recently come to the fore in law firms.

This is according to an e-brief received from the Society of Competitive Intelligence Professionals (SCIP) earlier to day, quoting an article in the Boston Globe and another in Legal Technology.

My friend and colleague Gerry Riskin is reproducing his Seven Immutable Laws of Change Management on his blog.

Says Gerry to managing partners: "I guarantee that if you respect these rules, you will get the cooperation you need to effect the changes that will catapult your firm forward."

Well worth a look.

I've just spent a fascinating morning with Oxford Analytica here in Oxford, England. Oxford Analytica is the organization that Clifford Chance turned to, to undertake their scenario planning exercise that underpinned their strategy review last year.

I was privileged to be invited to attend their daily briefing as an observer. This meeting was a round-table "what has happened in the world in last 24 hours that we need to know about," that is modeled on the 'daily briefing' instituted by Henry Kissinger for Richard Nixon. Oxford Analytica's founder, Dr David Young, was one of Kissinger's key advisors.

Strategic blindspots seems to be popular topic amongst readers of this blog. (My posting Blindspot Analysis - Uncovering Strategic Bias has featured on the list of five most read postings on this blog for two out of the past three months.) Given that so much of my own practice revolves around strategy, it is also a subject that is keeping me increasingly fascinated, too. Not so much blindspots as 'per se,' as how to identify them and what to do about them during strategic process.

Craig Henry, in his blog Lead and Gold, blogs about a new book on the topic that will certainly be in my next contribution to Amazon.com's profits. The book is called Changing Minds - The art and science of changing our own and other people's minds, by Howard Gardner.

His insights are critical not only for those who have to think themselves about strategy, but also those tasked with driving change.

One of the likely consequences of Thomas Friedman's 'flattening world' is the professions being driven to redefine not only the boundaries between themselves, but at a far more fundamental level what constitutes a profession itself. This is being driven primary by IT, but also by the changing dynamic of the professional/client relationship. The time frame for significant and visible impacts may be more than five years in most places, but in the legal profession in England and Wales the Clementi-induced changes may prove to be a powerful accelerator. The final result could easily be the complete deconstruction and re-aggregation of what we today call the professions.

This makes it critical for the strategists that guide professional service firms to hone their skills in the gentle art of picking up and tracking these trends as early as possible, and in working through the "what-if" scenarios well before they become an issue. At which point, their firms will hopefully have solutions that they have already identified, if not implemented, while competitors are still in the starting blocks.

The early trend indicators are compelling and in many ways the evolution is already well under way.

Henry Mintzberg (pictured above,) Bruce Ahlstrand and Joseph Lampell, in their 2005 book Strategy Bites Back, present 5 "P's" as a way to define strategy. Each "P" shines a spotlight on what strategy is / means / encompasses from a different angle, to provide a comprehensive overview that is probably more useful that definitions that try to fit all into a couple of sentences.

The 5 "P's," adjusted where necessary to fit into the professional service firm universe, are as follows:

I must confess that I hadn't read David Maister's article 'Are Law Firms Unmanageable?' until Bruce MacEwen's quite poignant response in Adam Smith Esq hit my aggregator yesterday. My copy of April 2006 edition of "The American Lawyer" (containing David's article) has yet to reach me, so instead I printed out the advance copy that he was kind enough to email me a week or so ago, settled down into my favourite leather wingback chair in my study and read it through. Then, I look a deep breath and read it a second time.

With all the subtlety of a nuclear-tipped cruise missile, David goes to the heart of why he believes law firms not only are not, but can not be managed as efficiently as other professional firms.

He starts:

"After spending 25 years saying that all professions are similar and can learn from each other, I'm now ready to make a concession: Law firms are different.

-unusual approaches to decision making."

This is another posting of the Strategy 101 kind, in this case to introduce another of the basic tools that professional service firm strategists need to have in their toolboxes. This tool was first mentioned on this blog in my previous posting Love Your Dogs?

Only firms that have superior market share that can grow their business and develop the organizational learning capabilities to really capitalize on their experience. Empirical studies by the Harvard Business School in the 1970s first confirmed the basis for this assumption, leading the way to the development of the Boston Consulting Group's (BCG) Growth / Market Share Portfolio Matrix.

In the professional service firm context, the BCG matrix is a tool to determine the attractiveness of a service or practice area, based on the service life cycle and the experience curve. In other words, it provides critical information that strategists need, to help decide where the firm should be focusing resources over the next strategy cycle.

Religious conviction; the national Treasury; a firm handshake: all symbols of trust that evoke expectations. Most importantly: the expectation that one will not be betrayed. If there is one place where trust is paramount, it is in firms that practice professions such as law, accounting and consulting, where the service being delivered is so intangible that trust is the only assurance that the client has, that its work will be done properly. Small wonder that trust-based relationships both with clients and internally are the very cornerstone of the cultures of such firms; certainly those at the 'top of the curve.'

The March/April edition of the Harvard Magazine contains an article on the differences between risk aversion generally and aversion to being betrayed. It makes fascinating reading and, I think, introduces a seldom-considered facet to the process of strategy.

Surely the most dramatic mythological example of rebirth and renewal, is the Phoenix (or "Firebird.") It is found in ancient Egyptian mythology, various myths derived from it and, most recently, in Professor Albus Dumbledore's study in Harry Potter.

Said to live for 500, 1461 or for 12594 years (depending on the source), the phoenix is a bird with beautiful gold and red plumage. At the end of its life-cycle the phoenix builds itself a nest of cinnamon twigs that it then ignites; both nest and bird burn fiercely and are reduced to ashes, from which a new, young phoenix arises. The bird was also said to regenerate when hurt or wounded by a foe, thus being almost immortal and invincible.

Imagine, for a moment, that you were able to regenerate your firm in this way. Miraculously, you were able to instantly transform it into an organization of the highest performance with, what's more, that performance being sustained.

For larger view, click on image

A current Strategy+Business article, Love Your Dogs, suggests that conventional wisdom may be wrong when it dictates that resources should be focused on a businesses 'stars' while leaving 'dogs' to starve or hiving them off. (The terms, of course, come from Boston Consulting Group's famous model that divides businesses into stars, question marks, cash cows and dogs.)

This issue is a particularly troublesome topic in many professional service firms, where practice areas that may have commoditized to the point of marginal profitability are not faceless business units but one's partners, colleagues and, frequently, friends. So facing up to the need to starve or divest dogs is something that many firms simply don't have the stomach for. The result is that they are tolerated and sometimes (in the name of 'fairness') even invested in as much as high growth areas of the firm.