contemporary or ms in strategy development and policy-making some reflections

8/10/2019 Contemporary or MS in Strategy Development and Policy-making Some Reflections

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Contemporary OR/MS in strategy developmentand policy-making: some reflectionsM Pidd1,2*1Advanced Institute of Management Research, UK; and 2Lancaster University, Lancaster, UK

It is now widely accepted that strategy-making and policy development require both rational analysis and an ability to

work with insights that are sometimes hard to pin down. Can operational research (OR) contribute to this process in

which soft and hard are interwoven? Simons longstanding distinction between substantive and procedural rationality is

helpful in addressing this question. Undoubtedly, OR has made major contributions to strategy development, although

there has been a marked tendency to argue for even greater use of substantive rationality. In addition, some soft OR

methods are also successfully used in strategy development as ways to provide procedural rationality. Add to this the

suggestion of Sagasti that metaphor and language are powerful tools in strategizing, then there is a powerful case for the

greater use of OR/management science is strategy development and policy-making.

Journal of the Operational Research Society (2004) 55, 791800. doi:10.1057/palgrave.jors.2601748

Published online 5 May 2004

Keywords: strategic planning; soft OR; methodology

Introduction

Todays organizations are urged to operate faster, better and

cheaper than in the past and to do so, their managers must

constantly develop and operate strategies that enable them

to prosper. Many different disciplines can offer support,

including operational research and management science

(OR/MS). Over the last three decades, various authors have

suggested how OR/MS might improve strategy developmentand policy. Ackoff1,2 wrote extensively about this and

proposed a radically different view of OR/MS, based on an

explicit systems approach to strategic planning. Dyson and

OBrien3 and, earlier, Dyson4 bring together a number of

contributions that demonstrate ways in which analytical

approaches, based on a control system perspective, can

benefit strategy and policy development. Dyson and Eden5 is

a special edition of the Journal of the Operational Research

Society devoted to OR/MS contributions to strategy. Eden

and Ackermann6 show how some soft OR methods, most

notably cognitive mapping, are used in supporting people as

they develop strategies and policies. Bells text on strategicOR/MS7 brings together a set of cases that clearly

demonstrate the strategic impact of traditional OR/MS.

This paper aims to move this debate forward by

summarizing some of the important features of strategy

and policy-making and relating these to proposals made by

writers on OR/MS in recent years. This synthesis leads to

suggested contributions that the OR/MS community might

make to corporate development and to policy-making in the

public sector.

What is strategy and policy?

For this paper, the terms strategy and policy, whether in the

private or public sectors, are taken to be the same and, for

simplicity, the term strategy is usually used hereon. There are

many definitions of strategy: for example, Mintzberg8

summarizes the many definitions of strategy as the five Ps.

A strategy as aplanor guide for future action. This carries

with it the idea of careful preparation, a husbanding of

resources and a deliberate preference for some action in

the future.

A strategy as a ploy, involving scheming and plotting to

achieve some end, often to fool competitors. Some would

argue that this is part of the implementation of a plan.

A strategy as a pattern of behaviour of ways of

operating that may be deliberately chosen, or may emerge

almost unseen over some time period.

A strategy as aposition, a notion that stresses goal setting

and ambitions.

A strategy as a perspective: that is, a set of concerns and

opinions that may be unspoken but that define how an

organization does what it does.

These definitions are not exclusive, and a particular

strategy or policy will often contain elements of more than

one. For example, a drinks company may have a strategy to

enter, develop and dominate a new geographical market. Its

managers willplan the resources that they think are needed

*Correspondence: M Pidd, Department of Management Science, TheManagement School, Lancaster University, Lancaster LA1 4YX, UK.E-mail: [email protected]

Journal of the Operational Research Society (2004) 55, 791800 r 2004 Operational Research Society Ltd. All rights reserved. 0160-5682/04 $30.00

www.palgrave-journals.com/jors


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for this. Their wishes and intent for this market reflect a

position. As time goes on and competitors react, the

managers will develop ploys that may be based around

pricing, promotion or distribution, which in turn stem from

the patterns of behaviour that are normal within the

business. The strategy itself may be based on an ambitious

perspective in which seeking growth opportunities is funda-

mental. It seems likely that any successful strategy will,

deliberately or not, involve several of the five Ps.

Whether strategy is always deliberately developed has

long been a point of contention in the strategy literature.

Cummings9 points out a broad historical division into the

design school and the emergent strategizing school. Both

schools have their leading advocates: Porter10,11 and Ans-

off12,13 in the case of the design school, which stresses the

development of careful plans with specific features to meet

particular situations. Some of this literature is highly

prescriptive, for example Porter10 argues that successful

strategies have particular attributes that offer competitive

advantage. Johnson and Scholes,14

although taking a muchwider view of strategy than design, expand Porters three

generic business strategies into their Strategic Clock with

eight positions. Taking a different tack within the same

school, writers such as Ansoff13 are more associated with

schemes that propose how such strategies should be

designed, rather than advocating particular designs. In the

design school, the main stress is on the careful development

of a strategy as a plan. This does not mean that the other

four Ps are ignored, but they are accorded less importance.

By contrast, the emergent strategizing school, of which

Mintzberg8,15 is the best-known advocate, stresses the

development of plans rather than the plan itself. This school

emphasizes that planning is an activity that should be part of

every managers job and that plans need to be constantly

revised to meet changing circumstances. It also recognizes

that some plans may emerge through informal processes in

which opportunities are spotted and exploited. That is,

strategies may emerge, possibly informally, as a new

opportunity appears or a new threat is perceived. The

emergent strategizing school tends to stress a combination of

pattern, perspective and ploy: a plan being what emerges

from these considerations.

Recent writers, such as Cummings,9 point out that this is a

false polarization into two schools since, as noted above,

elements of both are found in successful strategy and policy-making. Strategy development is neither an irrational nor a

wholly rational process, but one in which people engage to

set out a desirable future. Mintzberget al16 makes much the

same point, producing numerous examples in which intui-

tion and opportunity play a part, as does careful thought

and deliberation. In addition, elements of any plan or of any

strategizing are rarely wholly within the control of those who

are planning. Other actors, such as competitors, legislators

and customers will also affect what happens. That is, some

elements of the future cannot be controlled by the actions of

those who are planning and, instead, the organization must

find ways to roll with that future so as to achieve some goal.

Some characteristics of strategy and policy

Why is careful strategizing and policy-making hard to do

and why are writers such as Mintzberg15 so critical of therole of analysis? In an unpublished conference paper, Eden

suggested several reasons for this, including the following.

The first is that strategic decision-making is, by definition,

potentially crucial to an organizations survival. What is

strategic for a small software company may be just a small

decision to a software giant. Deciding whether to develop for

a prospective hardware platform may put the entire future of

a small software business at risk, but this may not be true for

a software giant. Owing to its importance, the temperature

of debate can be very high in strategic decision-making. The

stakes are high, as are the corresponding risks, which places

great pressure on participants. Although the notion of asmooth, annual planning cycle is comforting, not all

strategic issues can fit into a neat loop of this type. Rather,

when opportunities arise, they must be considered and then

grasped or left alone, as appropriate, which may require a

rapid response under pressure.

Secondly, it is important to realize that, in strategic

decision-making, there may be considerable confusion and

debate over objectives. In operational planning, the usual

concern is how something should be done. We need to find

some way to ensure we get our goods into the stores on time

and at low cost. This is difficult enough and accounts for

much contemporary OR/MS. In strategic decision-making

and policy development, the debate is more often aboutwhat

should be done andwhy. That is, the debate and wrangling is

about strategic prioritization, rather than about implemen-

tation although it is obviously dangerous to ignore

practicalities in strategic debate. It is also true that the

leaders of any organization, the people who set the strategic

direction, are usually very powerful and are remarkably

good at getting what they want. This is why they are

successful and how they climbed to the top of the

organization although there are many cases that

demonstrate the folly of pushing hard for a policy with no

underpinning analysis. Thus, strategic debate is character-

ized by argument, sometimes rational and sometimes not,between people who are good at getting what they want. But

even they may be unsure of what should be done and why,

leading to an uncertain debate over priorities rather than

means to particular, predefined ends.

A third problem in strategic decision-making is the data

paradox. There may be too much data, but much of it may

be of little use in strategic decision-making. Why should this

be? Thanks to the almost universal use of computer-based

communications networks and databases, most organiza-

tions are awash with operational data. Grocery chains

792 Journal of the Operational Research Society Vol. 55, No. 8


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process huge quantities of data through their EPOS systems

and this gives them the chance to monitor consumption

patterns and to plan store replenishments. Government

departments likewise hold much data that define our status

as citizens and that represent our interactions with the state.

Health care systems hold records of our visits to doctors and

clinics, of treatments received and, sometimes, of their

effects. Such data are very useful, but have one drawback for

strategy development; the data are collected to enable the

organization to operate more efficiently now or in the near

future. In essence, it deals with the known but, although

existing data are useful for considering new policies in the

light of the old, more than this is needed in the heat of

strategic debate. Although ticket sales data may enable an

airline to see that it is losing customers in a particular

market, this does not tell its managers what to do. The

challenge in much strategic decision-making and policy

development is to find ways to deal with the new and

unknown. Hence, part of strategic decision-making may be

the collection of new, imperfect and informal data that maybe analysed quickly and crudely if it is to be useful.

Fourthly, strategic decisions are often complex as well as

very important. As used here, complexity in decision-making

implies three things. Firstly, such decisions are complicated

and may involve many different factors that must be

considered. Secondly, there are many interactions between

these factors, so that making a change to one will have

consequences elsewhere the ripples are felt across the

pond as the stone drops through the surface. Finally, and

perhaps less obvious, these decisions involve human beings

who may construe the same situation quite differently from

one another. Thus, as mentioned earlier, the main actors

may have different priorities, may regard one set of factors

more important than another and may hold quite different

views on the interactions between those factors.

These features of strategy-making and policy development

mean that OR/MS analysts working in this area need to

tread very carefully indeed. Ackoff2 argues that strategic

decisions are messes, not straightforward problems that are

easily solved. Instead they are wicked problems,17 not tame

problems, because their complexity is not just an issue of

scale but also of clashing value systems. Wicked problems

have stakeholders who may be physically distributed and

who may operate within different paradigms, with their own

vocabularies and means of expression, hidden agendas,different values and competing interests. Moreover, there

may be little hard data available for analysis and the nature

of the problem may evolve over time but resources, including

time, are limited. These are interacting sets of problems that

have no correct solution and the hardest and most

demanding task is problem definition. Tame problems can

be solved, because they are well defined and there is some

agreement about the aims being pursued. Wicked problems,

on the other hand, are not solved, they are handled and

worked with, although progress can be made. The com-

monsense way to handle wicked problems is to structure

them so as to reduce them to problems or even to puzzles

that can be solved. However, messes and wicked problems

are interactive systems of related issues, as the problems and

puzzles defined by such structuring are inter-related. The

links between the issues and decisions can be as important as

the atoms themselves.

This presents a clear challenge to OR/MS workers who

wish to contribute to strategy and policy development. One

possible approach is to leave it to others to structure the

messes into problems and, following this, to tackle the then-

defined problems rather than the mess. To give an example,

the UK personal banking sector is highly competitive and

thus banks use technology to reduce their costs. Strategic

decisions to reduce the cost of serving customers have led to

the introduction of large call centres at which customer

records can be accessed via integrated computer systems.

OR/MS analysts may be asked to advise on the size and

operation of such call centres. Laudable though this may be

in terms of efficiency, it begs the question of whether goodcustomer service is provided by such centres. It is surely

better for OR/MS analysts to develop the skills and expertise

that are needed to earn a seat at the table at which the

wicked problems themselves are being addressed, rather than

feeding from the crumbs that fall from it.

OR/MS in strategy: rational analysis?

Rationality?

Seeking a title for his book on soft OR, Rosenhead18 came

up with the pleasing Rational analysis for a problematic

world. This raises the question of what is meant by rational

analysis. Simon19 distinguishes between two forms of

rationality. Substantive rationality is an attempt to develop

a quasimachine-based approach in which a range of options

can be objectively compared and assessed. Simon20 (op cit)

characterizes substantive rationality as follows:

The most advanced theories, both verbal and mathema-

tical, of rational behaviour are those that employ as their

central concepts the notions of:

1. a set of alternative courses of action presented to the

individuals choice;

2. knowledge and information that permit the individual to

predict the consequences of choosing any alternative; and

3. a criterion for determining which set of consequences he

prefers.

In these theories rationality consists in selecting that

course of action which leads to the set of consequences most

preferred.

Substantive rationality is suited to situations in which the

means to an end are uncertain, but the ends are known and

the problem is finding some way to choose between these

options. This is the approach to rationality that underlies

M PiddStrategy development and policy making 793


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substantive decision support in which a DSS with a

knowledge base and calculation and inference engines may

be used. For example, a substantive DSS could be developed

to help engineers design bridges. It could incorporate a range

of generic designs for bridges and could perform the

calculations needed to plan the detailed design of a

particular bridge. It can help the engineer to decide how

the concept a bridge is needed may be implemented; it helps

him to decide what means are needed to meet that end.

Substantive DSS are very useful for such well-structured

tasks and are based on substantive rationality as defined by

Simon.

However, substantive rationality may not work when the

argument is about ends rather than means. Simon19 uses the

term procedural rationality for an alternative view that

stresses the use of reasoning processes rather than the

elucidation and comparison of options. Behaviour is said to

be procedurally rational when it results from some appro-

priate deliberation, which stresses the process of decision-

making, on how it is done or on how it should be done.Substantive rationality stresses rational choice, and proce-

dural rationality stresses rational choosing.

Applying procedural rationality requires processes and

tools that support the search for alternatives, that encourage

systematic information gathering and analysis and that help

people find acceptable solutions when there is conflict. The

latter point is especially significant in supporting strategic

decision-making. The idea of procedural decision support is

to provide a framework within which people may explore a

decision situation and use their reason to find a way through

it. As argued in Pidd,20 soft OR approaches aim to provide

decision support that is procedurally rational, although how

they do this varies. The SODA6 methodology and the

Strategic Choice Approach21 provide detailed advice on how

to manage an intervention aimed at providing decision

support. Soft Systems Methodology22 helps participants in a

complex decision think through their different worldviews

and positions. The soft approaches all aim to help people to

find enough accommodation to make progress on wicked

problems without ignoring the realities of power and

influence.

Thus, rational analysis can mean different things.

Returning to Rosenheads title, why is the world proble-

matic? Surely, if people tried harder and were more

intelligent, they would be more rational in a substantivesense and is not the role of OR/MS to encourage people in

this direction and would not this lead to better strategies? As

is well known, Simon23 uses the concept of bounded

rationality to explain why substantive rationality is often

inappropriate as well as impossible. In situations of any

complexity, people do not have perfect information,

information costs money to acquire and peoples preferences

may be inconsistent over time. Thus, people take decisions

on partial information, are aware that this is not ideal, do so

under tight time constraints and are aware that a decision

that seems correct today may seem inappropriate some time

later. Exploring options, uncertainties and information is

sometimes more important than choosing from a defined set

of alternatives. These aspects characterize strategy develop-

ment.

How people really behave

As well as writing about strategy and its development,

Mintzberg24 is also known for his research into the actual

behaviour of managers. Although his original work was

conducted almost 40 years ago, it seems likely that his

conclusions still hold. Mintzberg24 records how he went to

find out how managers actually behaved because he was

puzzled by the way in which senior managers seemed not to

take much account of expensively produced analytical

advice. Having observed the ways in which these men (this

was the 1960s) operated, he drew a number of conclusions

that can be summarized as follows.20

1. Many senior managers work long hours at an unrelenting

pace.

2. Their activity is characterized by brevity, variety and

fragmentation with constant switching between tasks.

3. The managers in the sample seemed to prefer the more

active elements of their workload and disliked tasks such

as reading mail and reports even though they might

contain hard data.

4. Linked to the point about activity, most of the managers

seemed to prefer verbal media when communicating with

people. The verbal communications were almost all about

gaining and giving information, often soft information.

The picture is of continuous activity, of rapid decisions

and consultations with individuals, together with longer

scheduled meetings that involve many people. Throughout

this activity, the manager is continually receiving and sifting

information, seeking out that which is relevant now or which

might be useful in the future. It is not an image of a life of

detached, contemplative reason.

It is this milieu of continuous activity, of rapid decisions

and consultations with individuals that defines the bounded

rationality employed when making strategy and developing

policy. This does not mean that detailed analysis isimpossible or never used, but as Mintzberg et al point

out,16 there is much more to successful strategy development

than this. To be successful, OR/MS analysts must develop

skills that can be used in such conditions.

Ackoff: looking backwards and forwards

Proposing interactive planning, Ackoff2 discussed four

archetypical approaches to planning, based on peoples

different attitudes to the future.



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Reactive planning: a conservative stance in which the main

driver is a desire to return to a previous state thought to

be better than the current day. The aim is to correct the

mistakes made since then.

Inactive planning: a laidback stance in which people are

content to let others take the initiative in the hope that

desirable circumstances may emerge. Perhaps this accords

with a wholly emergent view of strategizing.

Preactive planning: preparing for a future that is assumed,

in most aspects, to be already determined. The funda-

mental task of such planning is to prepare for that future

so as to exploit it, and analysis has an important role in

this.

Interactive or proactive planning: this is Ackoffs ideal

form of planning in which the aim is to design and invent

a desirable future. This is a creative approach to planning

that stresses synthesis and the creation of options, rather

than their mere evaluation. It assumes that debate about

what is desirable is fundamental to such planning. That is,

it stresses ends before means.

Of course, these are archetypes and, as such, elements of

each of them may be found in most approaches to planning.

No organization is wholly in charge of its own destiny and

even inactive planners may exploit an opportunity as it floats

by on the seemingly calm waters of their lives.

In a later pair of papers, Ackoff25,26

criticized the OR/MS

community for its obsession with mathematical minutiae

and its failure to grapple with important issues of the day.

He was also critical of the willingness of OR/MS analysts to

welcome preactive planning because it offers two roles to

OR/MS that he characterized as predict and prepare. The

first is to try to forecast the future, which seems sensible if it

is assumed that the future is out there and is approaching

fast. However, it is of limited value if the aim is to create and

invent a desirable future. The second role is the analysis of

options devised by others in order to find ways for them to

achieve the goals set for them.

Ackoff26 argues that a revitalized OR/MS could offer

much more than quantitative prediction and preparation

and could be part of interactive planning, in which the aim is

to create a desirable future. None of us is in total charge of

our destinies, but Ackoff2 stresses that any social or

corporate planning should deliberate on what is desirable.

This surely implies that the consideration of ethics andmorals, as argued by Cummings,9 is fundamental to creative

planning. It also brings this paper back to the idea that

OR/MS workers might offer procedural decision support as

well as quantitative analysis.

Ackoffs interactive planning was to be based on several

principles of which one creative synthesis is discussed

above. The second is that planning should be participative;

that is, people should be helped to plan their own futures

and this should not be taken over by professional planners.

Professional planners should help people plan for them-

selves, a view echoed elsewhere. For example, in the UKs

community OR efforts27 to provide support for disadvan-

taged groups to help them plan their own, better futures. In

the corporate world, Mintzberg15 argues that planning and

scheming is a fundamental part of any managerial job that

must not be taken away by professional planners. Thus,

surprising though it may seem to some, there are similarities

between Community ORs work with the disadvantaged,

and successful planning in business and public sector

organizations. In both, the role of the planner is to support

those who should need to plan for themselves.

Ackoffs next suggestion is that planning should be

continuous. This reflects a view that learning about what is

desirable and developing ways to achieve this is fundamental

to strategic planning. Perhaps the most widely known theory

of learning is that of Kolb28 as shown in Figure 1. The

fundamental aspect of this theory is that of the learning

loop; or, more accurately, the learning spiral in which new

insights and conceptualizations lead on to the future

learning. This view of planning is represented in notionssuch as the Learning Organization and the system dynamics-

based work of Senge.29 The idea is that learning occurs when

feedback loops, whether formal or informal, provide

evidence of whether a particular action or policy is working.

The same idea occurs in the Deming quality cycle of Plan-

Do-Check-Act, which also emphasizes that improving

quality is a process of continuous improvement. It is the

managers and other participants who need this learning, not

just the professional advisors, hence the earlier point about

participation in planning.

Ackoffs suggestion that interactive planning must be

holistic is also significant, for it is not just the task of the

people at the top of an organization; everyone needs to be

thinking forward. This does not mean that day-to-day reality

can be ignored, for someone has to provide the services and

products required by todays customers. Rather, it means

that all should be thinking about the future effects of the

actions that they and others take today. A similar emphasis

Concrete

experience

Reflective

observation

Abstract

conceptualisation

Active

experimentation

Figure 1 Kolbs learning cycle.



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is seen in the writings of the originators and developers of

scenario-based planning,30,31 for whom the point of scenar-

ios is develop the whole organization so that people think

about the future as a matter of course.

The argument so far

Before considering the role that OR/MS might play in such

strategic planning and policy-making, it is worth recapping

the argument so far. The first point is that, over the years,

various writers have argued that OR/MS has much to offer

in strategy development and policy-making and that OR/MS

itself will gain from such involvement. The second point is

that there are many different ways in which people use terms

such as strategy and policy but most would agree that the

process of making strategy and policy, that is, the learning

that occurs as people plan, is as important as the plan that

they produce. Thus, any plan is always in flux and will

always be regarded as provisional even when resources arecommitted to its delivery. If the external environment moves

on or if an organization or group develops new capabilities,

the plans must be revised.

Thirdly, it is a mistake to assume that planning is just a

substantively rational process in which options are carefully

considered and evaluated. Options are of course considered

and evaluated, but this will always be a somewhat hit-and-

miss process. People try to act rationally by developing rules

and processes that enable them to make progress even with

imperfect information in a world that is in constant change.

They do this because strategic issues are wicked problems,

with all the characteristics that these entail and they know,

intuitively, that substantive rationality cannot offer all they

need. Also, their daily working lives are characterized by

interruptions and constant shifts of emphasis. This real

world of imperfect information, would-be rational people

and shifting priorities is where and for which this planning

and policy-making occurs.

Fourthly, it is a mistake to assume that planning is all

about preparation. Preparation is obviously important, but

so is deciding the future for which the preparation is geared.

No one person or groups future is wholly within their own

control but, except for people in extremis, is it untrue that

the future is wholly determined. A fundamental part of

strategy development and planning is, therefore, deciding onstrategic direction; that is, deciding what future is desirable,

which is essentially an ethical and moral issue based on the

values of the individual and organization, and at the same

time, determining how best to achieve it. Finally, no plan is

once and for all, but will always be subject to revision until

the time for which it was prepared is past. Thus, planning

should be regarded as a contingent and continuous activity

in which one thinks through how to operate in particular

circumstances and thinks about what those circumstances

might be.

What contribution can OR/MS make to this view of

planning, strategizing and policy-making?

OR/MS in strategy development and policy-making

Fransisco Sagasti devoted much of his plenary speech at the

2002 IFORS Conference in Edinburgh to the future of OR/MS. Figure 2 is based on a key graphic from his talk and

shows what he regards as the three elements of OR in the

21st century.

1. Tools: these include the traditional mathematical and

statistical components of an OR/MS toolkit, such as

optimization methods, simulation, statistical decision

analysis and heuristic methods. Sagasti regards these as

typifying OR/MS development in the 1960s and early

1970s, characterized as analytical methods devised for

problems that are well structured. Although labelled as

1960s OR, it includes many methods developed since

that decade.2. Interventions: these are the soft OR methods, developed

mainly in the UK, and include Edens work on cognitive

mapping, Checklands on soft systems methodology and

Friends on strategic choice. Sagasti regards these as

typifying OR/MS development in the late 1970s through

to the mid-1990s and characterizes them as offering

modes of intervention a view that will be discussed

later.

3. Metaphors: this is the area that Sagasti regards as the

current challenge facing OR/MS as it attempts to be

relevant to the 21st century. Sagastis concern is to

develop ways of supporting people as they think about

desirable futures and ways to achieve them.

These three elements are complementary and there is no

suggestion of throwing any away to replace them by

another. Since there are many papers and books dealing

with the mathematical and statistical tools of OR/MS, these

will not be discussed here. As writers such as Bell9 point out,

there is clear evidence of their value in strategic decision-

making.

Tools & techniquese

maths and stats

Interventions

soft OR

Metaphors

ideals & worldviews

Figure 2 Sagastis view of 21st Century OR.



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OR/MS as intervention

OR/MS practice usually involves intervention in the affairs

of a group or organization and Boothroyd32 was one of the

first to give serious consideration to this. This book,

sponsored by the UK OR Society, argues that operational

research provides a rational way for people to articulate their

concerns before taking action, reflection before action. It

discusses important aspects of an intervention and was

written at a time when soft OR methods were emerging in

the UK. The timing is no coincidence, for the emergence of

soft OR in the late 1970s reflected a concern that powerful

analytical methods, the first element of Sagastis 21st century

OR/MS, were not enough. The zeitgeist of the day was

suspicious of methods that claimed their authority by

reference to scientific and substantive rationality. People

needed to be convinced that the use of analytical methods

would be worthwhile and not reflect a myopic emphasis on

quantification. As part of this, analysts needed to reflect on

the ways that they intervened when doing their OR/MS.Two of the most commonly used soft OR methods are

Edens SODA approach that stresses cognitive mapping,

and the strategic choice approach (SCA) of Friend and

Hickling. Both offer rather prescriptive advice about how

such work should be done. At a basic level, Eden33 and Eden

and Ackermann6 stress very practical issues about how

SODA workshops should be run. This attention to detail

emphasizes the importance of comfortable seating, of

lighting that allows all to see the shared display, of heating

and ventilation that is comfortable, but keeps people alert

during long sessions, and of room layouts that enable people

to have eye contact. Similarly, Friend and Hickling (op cit)

insist that meetings in which people stand and move around

are a great help when trying to understand and reach

agreement on important issues.

At a more refined level, Eden33 argues that intervention

style is important by using a notional equation to emphasize

the point. This has

Outcome Process Content

Outcome is the result of the study not only in terms of

agreement but also of the action that emerges. Processis the

approach and method used to achieve this outcome, that is,

how things are done.Contentis the techniques and tools that

are used in this process, being based on cognitive mapping inthe case of SODA.

Writing about SCA, Friend and Hickling22 stress that at

any time during an SCA intervention, the group will be

occupying or moving between any one of four poles as in

Figure 3. These are labelled as

Shaping: in which the group is trying to understand the

main features of the wicked problems they are addressing.

Designing: in which the group comes up with options that

may help make progress with the issues being addressed.

Comparing: in which the group agrees to multiple criteria

that will be used to evaluate the effects of the range of

options through time.

Choosing: in which the group develops commitment

packages that allow action to be taken to resolve at least

some of the issues under discussion.

During their discussions, the group will shift between these

poles and linear progression between them is extremely

unlikely. Hence, facilitations skills are very important if the

group is not to dissolve into chaos or inertia.

Why is this concern for intervention so important when

engaged in strategy development and policy-making? It

relates to two issues discussed earlier. The first is the much

needed emphasis on procedural rationality when strategy

making. This stresses the design of processes and procedures

that support reasoned debate and analysis when there is

imperfect information, when options need to be developed

and agreed and when there is great uncertainty. Thus, the

stress on the process of intervention in some soft OR

methods reflects this need for procedural rationality. This

applies whether the intervention is part of a one-shot exercise

or part of a continuing process of strategic deliberation. The

second reason relates to the way that human beings as

managers and planners actually behave, as discussed in

Mintzberg.24 They work under great time pressure, they

spend much time in formal and informal meetings and they

rely on other people. Any procedurally rational scheme must

work within this world and not some ideal world in which

there is time, space and inclination for ivory tower reflection.

Metaphors, meaning and values

An important feature of the argument so far is that strategy

development stems from debate about priorities and

directions, from which action then flows. Hence, Cummings

(op cit) argues that the consideration of ethics is funda-

mental to the development of strategies and policies, since

these embody the values espoused and used by the

organization and reflect the environment in which it

operates. Values are not usually expressed in mathematics,

but in common, every-day language, and influencing that

Multiple problem inputs Multiple problem outputs

Shaping Choosing

Designing Comparing

Figure 3 Positions during strategic choice.



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language is the key to influencing these values. Tsoukas and

Papoulias34 discuss how the terminology of UK social

reform in the 1980s and 1990s reflected the values of those in

power and also, in turn, affected the values of other actors.

Metaphor is a common use of language in which people infer

things by the way in which they speak about some object of

concern. This helps to explain Sagastis third emphasis on

metaphor.

Morgan35 discusses some common metaphors that people

employ when discussing how organizations operate. These

start with the machine metaphor and include others such as

organic, cybernetic and, less positively, the organization as a

psychic prison. The point is that metaphors are powerful

because they provide a shorthand that allows us to

communicate about essential aspects of our lives. For

example, an organization viewed as a machine suggests the

idea of interchangeable parts rather than the variability that

is inherent in much human behaviour, thereby stressing the

importance of roles rather than people. An organization

viewed as a psychic prison suggests that words such asempowerment mean that people are expected to do more

with less, rather than being a way to help people develop

their potential. The words that people use reflect and affect

how they see the world.

This, surely, explains Sagastis suggestion that metaphor

and its use is an important part of an ambitious 21st century

OR/MS. In the UK public sector, there is a current very

strong emphasis on the improvement of public services such

as education and health care. This is reflected in rhetoric

employing the metaphor of service delivery. It is instructive

to reflect on the various meanings of the word delivery,

which include the following.

The mail: which is physically despatched, transported and

received at the instigation of the sender.

Babies: many of which are born in the delivery suites of

maternity units as a result of natural processes.

Groceries: which are physically despatched, transported

and received at the instigation of the purchaser.

Evil spirits: from which a person may be released in some

societies.

Rescue: in which a person is taken from a place of danger

and placed somewhere safe.

Speech: in which someone makes a public declaration.

All are correct ways in which the term delivery is used andall share the notion of a one-way transfer of some kind. The

people who establish the policy for public services do

understand that these involve feedback loops and interac-

tions that are not as simple as one-way delivery. However,

talking of delivery brings the risk of targets (another

metaphor) that ignore such subtleties. The challenge is to

find metaphors that catch peoples imagination and that

embody some of the important subtleties.

Goffman36 describes how people make sense of events by

employing conceptual schemes, or frames. The process of

framing helps us to interpret what we experience and often

we do this through metaphor, which enables us to relate one

experience to another. When strategizing, people are facing

novel situations, it seems likely that they employ frames and

use metaphors to enable communication. Davies and

Mabin37 is one of the few papers that discuss how metaphor

can be used in OR/MS to help people to frame problems.

They suggest how the use of multiple frames can open up

new possibilities. They regard such metaphors as devices for

problem structuring that avoids early closure and ensures a

divergent phase in problem solving before moving on to

consider convergent selection of options. In essence, seeking

to employ a different metaphor enables people to see things

that are hidden by the blinkers of their unexpressed

metaphors in use. It seems that this may be a fertile area

for research and action.

Checklandss soft systems methodology (SSM) is a widely

used soft OR approach. Unlike Eden and Ackermann and

Friend and Hickling, Checkland is reluctant to give strong

advice about process, preferring to advise users of SSM todevelop contingent processes that suit their style, culture,

priorities and the time available. The core of SSM is two uses

of the system metaphor. The first is the idea that, following

Churchman,38 SSM and other interventions are enquiring

systems, in effect, learning cycles as discussed by Kolb.28 The

second is the use of root definitions as a way of teasing out

how people see an abstraction of the issues being addressed.

An SSM root definition has six components that reflect the

essentials of an abstract description that may form a helpful

metaphor. For example, a Presidential address to the UK

OR Society39 uses root definitions to discuss possible ways in

which the Society may be regarded. Two examples from that

paper are as follows.

The first sees the Society as a service provider, with a root

definition as follows:

Customers: the members

Actors: the members, officers and staff

Transformation: provide services in return for subscrip-

tions

Weltanschauung: OR workers need and want the services

that the Society can provide

Ownership: the members

Environmental

constraints: charity law and members willingnessto pay

This root definition implies that the Society should

measure its success by the number of members and the

degree to which they are satisfied by the services provided.

Expressed as a sentence, the OR Society is an exclusive

group of OR workers that exists to support and encourage

those workers by providing services and activities that are

permissible within charity law. By withdrawing membership,

its members can close it down and therefore the Society

needs to be run efficiently and meet its members, needs.



9/11

The second root definition regards the Society as an

outreach organization with a mission to increase the

awareness and use of OR within organizations, based on a

belief that the greater use of OR would improve those

organizations.

Customers: the organizational world

Actors: the members, staff and officers of the

Society

Transformation: to use the Societys resources to en-

courage the development of OR and its

further use in organizations

Weltanschauung: OR has much to offer to the external

world and could be used more

Ownership: the members

Environmental

constraints: charity law, the Societys resources and

interested people

It should be clear that these root definitions embody the

values that the analyst ascribes to the Society in the two

guises. This is because Checklands metaphor of a human

activity system stresses the importance of relating all

elements of a root definition to a weltanschauung, the

worldview that justifies what the system does and how it

does things. This embodies the values and ethics that define

the organization. Further, the two root definitions provide

alternative metaphors for the Society: the club and the

cooperative. They provide two options for thinking about

the future.

OR/MS in strategy and policy?

The argument so far suggests two possible roles for OR/MS

in strategic decision-making and policy development.

Developing strategic vision

As discussed earlier, strategy and policy are developed as

real people engage with real issues in ways that are rarely

neat and tidy. The development takes place in an arena

characterized by possible disagreement, by a shortage of

relevant data and information and by a need to agree on

desirable options. These strategies are rarely set in stone, butare revised as circumstances change. Decisions in this arena

stem from wicked problems in which there are many

interactions and a range of participants. This cries out for

methods that support procedural rationality: that is, for

decision support that encourages debate, deliberation and

direction rather than routine decision-making. The process

itself involves learning as participants gain new information

and new insights that may shift their priorities and may

change their values. What contribution can OR/MS make to

this?

First, it is important to realize that traditional OR/MS,

with its mathematical and statistical methods, has a definite

role. Quantification and the analysis of options are

important if it is recognized that they are based on models

that are always simplifications. In these circumstances,

simplification may make an approach more valuable rather

than less, since it enables the rapid consideration of the main

features of the available options. However, there is always a

danger of nothing-butism in which the model assumes an

unjustified mantle of truth. Used appropriately, what Sagasti

terms 1960s OR can be of great value in developing

strategic vision. Even when there are little or no data

available, the quantitative toolkit provides frameworks that

suggest what data might be useful and that can be used to

assess some of the effects of uncertainty.

It is important, though, to realize that OR/MS has much

more to offer than this. Sagasti identified intervention tools

and metaphors as part of a broader view of contemporary

OR/MS. This paper suggests that these are extremely

important if OR/MS is to contribute to strategy develop-ment. Approaches that stress intervention, such as SODA

and Strategic Choice, offer forms of procedural rationality

that are crucial when teams of people face wicked problems.

As they do so, some debate about values is inevitable,

although powerful people may wish to suppress it. In

strategizing, people develop options for a desirable future

and it seems that metaphors are useful in helping people to

articulate these alternative visions. It is here that other soft

approaches, notably soft systems methodology, with its

insistence on understanding and defining worldviews, can

play a crucial role.

Making sense of strategic vision

There is also a place for OR/MS in taking the priorities and

directions that have been agreed when strategizing and

considering the best way to get things done. Here we are

back in the world of classical OR/MS and substantive

decision support in which options are evaluated as fully as

possible, leading to systems that implement them. Some of

the examples of successful strategic OR/MS cited by Bell7

are perhaps best viewed in this light. This is clearly an

important role that should not be ignored.

It would be wrong, however, to assume that the

implementation of strategy follows strategic deliberation ina simple linear manner. Mintzberg et al16 discusses how

implementation and deliberation are often interwoven

through time. Successes and failures in implementation lead

to revised strategies, whether deliberately or by accident.

Thus, progress can be incremental at times as the people in

the organization learn what strategies seem to work. OR/MS

can clearly play a role in this. Quantitative tools are useful

for evaluating options, even with crude or limited data. Soft

OR methods are useful for the procedural decision support

that they can offer to those engaged in strategy development.



10/11

AcknowledgementsI am grateful for stimulating discussions withJoyce Brown, John Davies, Robert Fildes, Vicky Mabin, StephenWatson and Mark Westcombe during which these ideas have emerged.

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Received September 2003;

accepted February 2004 after one revision



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