can organizational strategies be certified? would wal-mart’s strategy be certified?
I found this interesting, the Strategic Management Society (respected body of academics and practitioners in the area of strategic management) is looking at creating a “strategy certification.” Here’s the logic:
You have your taxes completed with the help of a CPA and make your financial investments with counsel from a CFA. You might exercise with a certified personal trainer or a certified yoga instructor or send your invoices to be put into Quickbooks by a certified virtual assistant. So, of course, when you are developing strategy—a strategy that may require you and your organization to take considerable risks or make sizable investments and difficult decisions—you call on the insights of a certified strategist.
If only there was such a person. [More here.]
“Certifying” a strategy raises some interesting questions. So, what Certified Public Accountants do is one thing. Auditing and certifying the financials of an organization is based on the principles of comparative similarities (for example, based on rules such as the GAAP). Strategic activity, on the other hand, is about comparative differences between organizations — differentiation is the sine qua non of strategy. Organizational strategy, furthermore, is forward-looking and thus it is hard to somehow “certify” subjective assessments — where agreement is extremely unlikely — and the prospects of some radical innovation or course of action. What to one looks like an escalation of commitment, to another might look like a bold strategy. In short, I find it hard to see what exactly could be certified about an organization’s strategy.
I suppose one might think about certification and stakeholder-related considerations (indeed, these are raised in the above link), but then we get into all kinds of value-related issues. For example, I’m guessing we would get a wide range of opinions from organizational scholars on whether Wal-Mart’s strategy should be certified. This certification issue seems fraught with some of the same problems as “evidence-based management” — passing muster depends on whose evidence we are using and who is certifying. And, don’t extra-institutional actors, essentially, provide a type of legitimation that proxies certification —- protests and activism send signals that serve as a de facto, albeit ex post and noisy, certification.
“I find it hard to see what exactly could be certified about an organization’s strategy.”
You hit the nail on the head.
In accounting you have crystal clear guidelines to assess whether an organization did its bookkeeping properly. In strategic management, however, no such guidelines exist. (At least, not to my knowledge.) It’s understandable that strategic management scholars differ on what an organization should do strategically and discuss these issues ad nauseum. Certification would require a single standard that’s formulated unambiguously, which should allow the development of a curriculum to train upcoming Certified Strategic Consultants (?).
On the other hand, I bet some economists would be able to formulate clear guidelines pertaining to the strategic management of an organization if they’re allowed to assume that firms’ ultimate goal is to maximize profit.
Anouar El Haji
December 17, 2010 at 10:29 pm
“You hit the nail on the head.”
That’s what I like to hear. Though, the fact that there’s an SMS initiative behind this suggests that some smart folks feel strongly about this — curious to see how this develops.
teppo
December 17, 2010 at 10:47 pm
Teppo,
Thanks for bringing this up. I am not a fan of evidence-based management or Pfefferdigms. But I would note a few things.
First, it is not a certification process for strategies. It is proposed to certify that individuals’ have a handle on basic tools and how to apply them.
Second, SMS is involving all of the major strategy textbook authors in the process. Their main hurdle will be to see if they can agree as to the basic tools of the trade. Look at the books — despite some different perspectives, the tools presented correlate strongly. Most strategy courses cover what might be considered standard ground and then a few topics that are instructor-specific. Nevertheless, I expect this will be a high hurdle to clear…
I would hope that, if an agreement is reached, it will result in an ongoing dialog so that the toolkit will be updated as research produces new insights. If that is not the case, I expect it will wither on the vine…
Russ Coff
December 17, 2010 at 11:46 pm
“In short, I find it hard to see what exactly could be certified about an organization’s strategy.”
What about the process by which it is formed? Though it is hard to form good judgments about a good vs. bad strategy, it’s easier to see whether a strategy was developed using a sound or unsound process.
bork
December 18, 2010 at 12:05 am
I want to develop a certification program for organizations that exemplify quasi-rational behavior in institutional fields. It will be called Mimetic ISO-9001.
Kieran
December 18, 2010 at 1:02 am
Russ: Very interesting. Thanks for that background. Right, agreement on “tools” is probably going to be hard to come by. Sure, industry analysis is important, RBV, etc (yes, most books have the basics), though not sure what there might be to certify — well, beyond I suppose, that people have taken a strategy class. And practice-wise, lots of rather counterintuitive strategies have turned out to be quite counter to tools of the time. Interesting interplay, of course, between strategy and practice. And, there’s of course the “rules-for-riches” problem – if everyone uses the same tools, where does the differentiation and CA come from.
(Hope you are, by now, used to all the snow there at the U of Wisconsin!)
Bork: Interesting point.
Kieran: The sarcasm.
teppo
December 18, 2010 at 3:37 am
Even if you could get strategy scholars to agree on the tools, what’s the value-added for the organizations seeking certification? My guess is that it would be most valuable for very young, entrepreneurial organizations looking for investors (we must be a good idea, we’re certified by the strategists), but is there any value to organizations that have developed a demonstrably good strategy? Most certification systems are created to validate something that is intangible and difficult to observe (e.g., best places for working mothers to work), but the viability of an organizational strategy is evident based on performance, right?
As an organizational phenomenon I think the certification idea is fascinating. I’ve started to become interested in this industry of certification that has boomed recently. They are everywhere.
brayden king
December 18, 2010 at 3:47 pm
Why do any certifications exist? What purpose do they serve? They are largely a marketing ploy design to instill confidence. A way for consumers of a service or product to trust that some level of knowledge or quality exists from the actors involved. See SMS’s use case for confirmation of the intended use.
Although it does tend to create, as noted, a status quo-a general body of knowledge or practices that come to be known as best or right by the industry. That is assuming it is legitimized, though effective results are not the measure but rather consumer behavior. If certified strategist start to be selected over others partly because of the designation then it has achieved its purpose.
So in this sense I do believe an organization strategy could be technically “certified” (achieve certain practices or systems) as long as consumers, investors, or perhaps potential employees used that certification in their assessment of whether to interact with the organization or not. However, it is no guarantee that the strategy would be successful because they followed the SMS’s strategy development process.
Howard
December 18, 2010 at 4:04 pm
I wonder who would be using this. I have a gut sense that this would be used more by senior managers as a way of legitimizing their strategic plans and/or requests of the Board/CEO/C-Suite rather than at the organizational level for external communications and stakeholder management.
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December 18, 2010 at 6:23 pm
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December 22, 2010 at 12:19 am
Thanks for bringing this up — it will be an interesting development to watch. I don’t think the question is whether vaguely defined skills or a contentious body of knowledge can be certified. They can, or at least business schools seem to think so when handing out MBAs. To me, the more interesting issue is the conditions under which pressures to institute certification arise and succeed.
MishaTeplitskiy
December 22, 2010 at 7:22 am
This is a fascinating development – that might say more about SMS and the ‘strategy theory’ community than it does about strategy (whatever that is).
I shall watch this space with baited breath.
JC
December 22, 2010 at 2:09 pm
Seems rather odd to me. However, AACSB evaluates business schools’ strategic planning process.
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December 23, 2010 at 6:41 pm
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