The Social Side of Strategy

Definition

Strategy processes fail less often from bad analysis than from the social dynamics surrounding it: jobs and careers are on the line, so caution, face-saving, and deflection dominate the room. The authors call this "the one — often overlooked — factor responsible for many of the conundrums facing us in the strategy room," arguing that "the social side of strategy can overwhelm the intellectual side" no matter how smart or experienced the people in it are.

In the Book

Chapter 1 dramatizes the pattern scene by scene: a presenter reaches page 5 before being deflected with "we'll cover that on page 42"; SWOT analyses never conclude a business should shrink or exit, because "it seems that everyone is a winner, all the time"; performance is quietly reframed by excluding weak geographies or blaming "one-off" weather and restructuring costs. CEOs give their own plans a "risk haircut" before the board sees them, then still approve inflated numbers from below because a full audit of every business line is infeasible and a growth story is needed to keep the whole portfolio funded. The chapter frames this as the wrong kind of problem for human brains — an analytical exercise laid over a status and job-security game — and its icon is the "hockey stick" forecast that lets everyone defer the reckoning to a future year, or a future executive.

Why It Matters

Naming the social layer separately from the analytical layer explains why frameworks and best-practice checklists routinely fail to change outcomes: the room isn't short on frameworks, it's short on incentives to tell the truth. The fix the book proposes — importing an outside, comparative data set that nobody in the room can spin — is a general pattern for any setting where local incentives reward optimistic self-report over honest diagnosis (performance reviews, project status updates, academic grant proposals).