“SEARCHING FOR MY LOST SHAKER OF SALT”

“The best laid plans of mice and men oft go astray,” as both John Steinbeck and Robert Burns have written in one form or another, so please accept my apologies for the inordinate delay between postings.  About the time that I normally would’ve been writing this posting, I had an opportunity to go to the Jimmy Buffett Bama Breeze Tour 2007.  What a choice – write the posting or rub shoulders with Parrotheads!  Obviously, rubbing shoulders with Parrotheads won; and “a good time was had by all”!

But, the posting benefited, too.  While sipping on margaritas and listening to Jimmy Buffett, I was reminded of the truth inherent in the K.I.S.S. philosophy – keep it simple stupid.  Or, as that “other” Buffett, Warren Buffett, has said, “The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective”; and, “There seems to be some perverse human characteristic that likes to make easy things difficult.”  Charles Munger (or “Charlie” as he is referred to), Buffett’s long-time friend and partner, combats complexity with a “latticework of models.”  Says Charlie, “You’ve got to have models in your head, and you’ve got to array your experience – both vicarious and direct – on this latticework of models.”  As an example, Munger views stock picking “as a subdivision of the art of worldly wisdom,” which incorporates the market, finance, general economics, psychology, engineering, mathematics, physics, and the humanities.  According to author Robert G. Hagstrom, acquiring this worldly wisdom “is an ongoing process of, first, acquiring the significant concepts--the models--from many areas of knowledge and then, second, learning to recognize patterns of similarity among them. The first is a matter of educating yourself; the second is a matter of learning to think and see differently.”

I started thinking about some of the “mental models” I’ve filed away over the years with respect to strategy and its development.  I thought I’d share some of them with you, hoping it might facilitate your thinking about creating the “strategic architecture” (from Gary Hamel and C.K. Prahalad) I mentioned recently that is necessary to develop the “different activities from rivals’ or performing similar activities in different ways” that are at the core of competitive advantage according to Michael Porter.

The first such model is a graphic illustration of the strategic management process that I came across a number of years ago in a textbook, Management:  Function and Strategy by Thomas S. Bateman and Carl P. Zeithaml.  It should have a ring of familiarity to it – it’s similar to what I imagine is the way most lawyers (and others) go about decision-making:  first, identify or diagnose the problem; then develop alternative solutions; next, evaluate the alternatives; then choose the best alternative; next implement the decision; and finally evaluate the decision.

In the case of developing strategy by using the strategic management process model, the first step is to conduct an internal assessment.  That assessment would include both a review of the current strategy (if there is one) and an analysis of the firm’s internal resources and, in keeping with Porter’s view, all of the firm’s activities.  As I’ve mentioned before, I think it’s critical for a firm to “match” the capabilities of its “assets” (lawyers) with the demands of its business, and the internal assessment is a good place to start doing that.  Here’s the second mental model – a matrix I developed that facilitates looking at the demands of a firm’s business and capabilities of its assets.

I know it’s hard to read the model in the body of this posting; but, if you’ll click on it, another larger version should open.  I’ve also put a copy of it in Adobe *.pdf format in the right-hand margin in the “Posting Attachments” section.  As you look at this matrix, think about where some of the firms that I mentioned in my discussions about metrics might fall – like “Firm B”; Wachtell, Lipton, Rosen & Katz; and, Gordon & Rees.

I hope these 2 mental models help get you on your way to develop a strategy or as Hamel so eloquently put it to “reconceive existing business models in ways that create new value.”   I’m afraid that, without new business models that incorporate new strategies, a lot of the “players” in the legal industry will be, as I joined with the Parrotheads and Jimmy Buffett singing recently, “wasting away again in Margaritaville, searching for my lost shaker of salt.”