Papua New Guinea

The strategy review, whether at brand, business unit or board level, is a salient feature of business life.

Setting aside the time and effort it consumes and the reputational and political impact it can have, its importance to the business makes it an annual focus for many managers and executives. Like any other business activity, there are those who excel during this ritual and those who don’t. Cultural evolution provides a valuable, practical insight into how to be the former and not the latter. As usual, if you stay with me for a few minutes I’ll let you into the secret.

If you find the annual planning cycle an arcane rigmarole, you’re neither the first nor the last to do so. As an executive, it was part of my calendar for many years and, as an academic researcher, I’ve observed it in dozens, perhaps hundreds of pharma and medtech companies. Although the details vary, companies’ strategy reviews share similar characteristics. There is always a process that must be adhered to. Those involved with the process are never quite sure of why the elaborate process is the way it is. There are always senior people who enforce the process and approve or disapprove of the outcomes. You don’t have to be an ethnographer or anthropologist to see this annual process as a less than entirely rational ritual. Whatever its merits or demerits, a ritual is exactly what it is. And it’s that which is the key to understanding it and, armed with that understanding, excelling as you stand up at the front of the room.

Rituals are socially ubiquitous. That is, all social groupings have rituals. Your family probably has its own unique customs, especially at gatherings. Countries have ceremonies from the trivial, like pardoning a turkey, to the grandiose, like the coronation we recently witnessed in the UK. Your company will have many rituals, from the induction process to the leaving party and everything in between. A ritual is a ritual even if it is ostensibly necessary and practical. Your annual strategic planning process is just that sort of ritual and to recognise it as such doesn’t in any way demean or devalue it. Quite the opposite. Understanding why all firms have an annual planning ritual allows you to tap into a rich seam of anthropological knowledge to your personal advantage.

Among the rich and varied literature studying human rituals, the work of Bronisław Malinowski is seminal. Living among the Trobriand people on Mailu Island, off the coast of Papua New Guinea, he observed their customs and recorded their rituals. One of his most fascinating observations was that rituals varied in complexity and importance according to the uncertainty of the situation. Relatively risk-free inshore fishing, for example, was accompanied by simpler rituals. By contrast, deep sea fishing, with all its uncertainties and unknowns, was preceded by more elaborate and sophisticated rituals. He concluded that the islanders were using ritual to try to impose certainty and reduce insecurity. More recently and in a less exotic context, University of Texas researchers Whitson and Galinsky found that humans are more likely to perceive illusory patterns and correlations in information if they feel they lack control of the situation. These and other findings tell us that humans are hard-wired to try to tame uncertainty with ritual. It seems a pretty robust conclusion, so how does it help you when you’re standing in front of the leadership team holding a laser pointer?

When the leadership team says it needs you to present your strategic plan, what does it really need? Superficially, it’s saying it needs information, with which it’ll assess your proposals and make an evidence-based decision. But those with an anthropologist’s training would see it another way and sense deeper, implicit needs. Through an anthropologist’s eyes, the leadership team is as worried about future sales and profits as the Trobriand islanders are about fishing in the deep, turbulent ocean. Success is uncertain and they are at considerable personal risk. For both islanders and executives, their deeper need is to reduce uncertainty and increase their feeling of being in control. Their rituals, both tribal and corporate, are attempts to meet those deeper needs. This anthropological perspective explains why some strategists come out of the review smelling like roses, while others have suffer career-threatening car crashes. The former play to the deeper need, the latter naively think their presentation is about the numbers.

The practical take-home lesson here is, or can be, very important to you if you’re standing at the front of the room. Although you must follow the prescribed process, there’s always some latitude in how you approach it. The naïve will try to dazzle with numbers and charts. The smart people will anticipate what frightens their leaders the most, mitigate those perceived risks and create a feeling of control, even if it is partly illusory. I’ve seen this masterclass in risk management given in the real world by an exemplary minority of strategists. Along with my colleagues Malcolm McDonald and Keith Ward, I even authored a book about it1. They may not have heard of Malinowski and the Trobriand islanders, but these star performers have the anthropologists’ advantage.

1 Marketing and Finance. Wiley 2013. Sample chapter available from www.pragmedic.com