This is Karl Moore of the Desautels Faculty of Management at McGill University with Talking Management for The Globe and Mail. Today I am delighted to be in Vancouver sitting down with the Rotman School's former dean of management, Roger Martin.
Roger, when we look at strategy what's the role of the board in terms of developing a corporate strategy?
MARTIN - I really think that strategy has got to come from management first and foremost. If the board is formulating strategy it should fire the CEO.
That having been said, I think that every strategy should always be considered a work in progress. Strategy is never done. Yes, you have to go out and do things, and you do things with the best iteration of strategy that you have now, but literally if four months later the competitors do something that nobody ever thought they would do, or customer tastes change, you have to enhance it and modify it.
So the idea that management can come forward and say, "This is what we are thinking about as our strategy," they should be open to the board saying, "That sounds good, but what about this? What about this? How can we enhance it a little more then currently we have it." I think that is a good relationship.
I have also seen with some absolutely fantastic companies that I consult to and have been part of it, where the CEO comes to the board and says, "This is big, this one is gigantic, and we have three options as we see it. We don't want to come to you and say, 'It's this one versus this one versus this one.' We want to present the three options to you and have you opine on them, give us your best thinking, and then we will come back and say based on that, here is the strategy we choose."
I like that a lot, and the time that is first in my mind it made a huge positive difference for the company. If they had just come to the board, up front and said, "We have three options and we have chosen this one," I am not sure they would have gotten the really useful feedback that would have made the options better and made for a better choice.