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Inspiration, Chaos and the Rubber Band Theory of Organizational Management

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An exploration of the processes of strategic marketing analysis in relation to the issue of strategic choice

Fundraising & New Media

By Trevor Maynard © 2002

Branding Or Not

Introduction

The Value of Effective Marketing

“The rubber band theory of how organizations develop
suggests that if an organization can clearly articulate where it is now,
as well as have a vision of where it wants to go,
the vision will catapult the organization from where it is now towards its vision”
(Courtney 2002)
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Inspiration, Chaos and the Rubber Band Theory of Organizational Management © 2002
The above could be taken as an example of a strategic plan, however, due to what could be considered be an inherently unstable foundation, it may be better to refer to it as a “strategic improvisation” (Courtney 2002). To take the metaphor further, how far will the rubber band stretch, will it break, will it catapult the organisation beyond its capabilities, (for which read core competencies) (Courtney 2002), or will it take the organisation in an unexpected direction, (for which read new opportunities) Is the metaphor too unpredictable, too chaotic?  Should strategy be rationally planned? (Combe 1999)   Then again, should strategy only ever be a product of analysis, or should a more co-operative approach be sought and room given for inspiration (Nutt 2002). It would seem to be a good idea to at least have a clear idea of where the “strategic process begins” in order to gain a “clear definition of the purpose” of the organisational aims (Davies 1995), what Bruce (1998) and Courtney (2002) call the organisation’s raison d’tre, what could be said to vision of the future, or also called an organisation’s the strategic intent (Hamel and Prahalad 1994), if that is, organisations within the charity sector can be said to have a strategic intent, or indeed, whether the use of marketing concepts is even appropriate to the charity sector (Clarke and Mount 2001). 
 
Although Bruce (1998) is fervent in suggesting the way forward for non-profit organisations is “a greater adoption of a marketing approach”, Graham (1994) is less sure such an approach is valid for the sector.  Clarke and Mount (2001) suggest the reticence of some of the sectors academics in this area may be related to the fact that non-profit services are essentially “non-exchange” events – nothing is expected of the beneficiary in return, whereas marketing creates “satisfying exchange relationships” (Dibb et al 1994) which can actually conflict with the objectivity of equitable delivery of public services and the effective relieves a charity may be mandated to bring to society (Brown 1992).  In the case of The Big Society [a pseudonym] , the raison d’etre of most projects to provide support people to people with learning difficulties so as they won’t need support in the future; e.g. like most charities, the idea is to do yourself out of a business. However although Clarke and Mount (2001) identify the lack of exchange as an example of a “mid-life crisis” for marketing, others (Bruce 1998, Sargeant 1999, Courtney 2002, Ali 1997) view the innovative nature and flexibility inherent in the non-profit sector as an indication that marketing, and in particular the emphasis on brand equity and lifestyle philosophy is, if anything, more appropriate to the non-profit sector than the commercial sector.  The Big Society’s idea product (Bruce 1998) could be said to be promote and facilitate inclusiveness for people with moderate learning difficulties – that of Nike (Klein 2000) may be training shoes, but the philosophy is one of promoting and facilitating its customers into an inclusive sports lifestyle.
 

Davies (1995) defines marketing strategy as “a coherent set of policies, programmes and project which defines the path to be pursued”.  In a non-profit organisation where, by definition, the most easily measurable critical factor for success – profit – is absent, goal can be less clear and priorities less focussed, so a clear vision, or a sense of values, as opposed to value, is needed all the more (Wise 1998).  The strategic intent could be made clear through the process of strategic marketing analysis (Courtney 2002), and where this can begin is with the vision of the organisation, which in turn could be formalized in the mission statement of the organisation (Wise 2001).  However while is cognitive approach has the advantage of being proactive and rational, it does assume a stable environment and an unchanging goal (Combe 1999). This could be said to help the organisation identify who it is and what is does (Keaveney 2001) which could lead to a clarity if purpose and thus articulate the vision as a place where an organisation will be at a future point “when it has materially achieved it’s purpose.” (Davies 1995).

 

Sargeant (1999) suggests a good mission statement can act as a reference point from which to derive clear organisation objectives, and which for example, should include the customer groups that well be served, the customer needs that will be met, and the technology that will be needed in meeting those needs. (Abell 1980).  Knowing the vision and knowing the means to get there allows for easier evaluation of the successfulness of an organization (Nutt 2001). This also emphasises the need for the vision to be operational, for core competencies to be known, and for that to be the focus of the mission (Davies 1995).  If the mission is not honed in on the core competencies and is not realistic then the vision may seem to remote to motivate, or conversely, if the mission is too easily achievable it may lose validity (Campbell, Devine, Young 1990).  For example a London charity whose mission statement was to take one deprived child per year on the London Eye may not be considered a big enough cause, while if it’s mission statement were to take hundred children on holiday to the moon by 2004, it may seem unrealistic.

 

A strategic marketing analysis of the external and internal environments of the organisation can help to confirm the vision the charity thinks it has is the one that it is perceived it has and that what is in its mission statement is in fact what it is doing, or is perceived as doing (Bruce 1998). An effective way to do this would be too ask all those who have a connection to the organisation, those who Bryson (1995) calls the “stakeholders”, how they perceive the vision and mission. For example at the AGM for the Big Society, some senior managers took the mission statement “practical pioneering with people with learning difficulties” to mean raising awareness of the issues of inclusiveness and participation, whereas the feeling from the service users from the floor, was why wasn’t the charity doing more around training and employment, and the view of the auditor, the charity had “helped” a lot of people during the year.  This would suggest a less prescriptive approach to strategy, one that concentrated on development in order to allow flexibility in achieving the charity’s objectives (Combe 1999).  It is suggests that if the aim and objectives are broadly drawn then the means of achieving them cannot be too rigid either.  (Nutt 2002)

 

Another way would be to examine the different projects within the organisation and map out how a possible future may evolve.  One of the most popular of these “portfolio analysis” is that of the Boston Consulting Group in which projects are placed in a 2x2 matrix according to market growth and relative market share.

 

Market Share

                     High                                                        Low

??????????

 

STARS

 
g      high

r

o

DOGS

 

 

Cash Cows

 
w

t

h

 

         low

 

 

The BCG Matrix(Grieve-Smith 1985)

 

In a charity, such as the Big Society, with several projects, this matrix is not only a useful financial tool but can help to focus on the charities vision.   For example, the residential care home is popular and is now full, so there is no growth, but there is a high market share, and stability.  With the coming of National Care Standards, new regulations and the received sector wisdom (and that of the Big Society’s vision) that residential care homes are not inclusive, this project may become less popular and stagnate.  Hence it may move from cash Cow to Dog.  A trainers group is highly innovative (run by the service users) but it’s funding is uncertain it may end with the current funding, As vision and mission are more relevant to the Big Society than market share and growth I have adapted the matrix and substituted more meaningful paradigms as illustrated in the examples below.

 

Vision

High                                                                                                  Low

Mission

High

Innovation

 

Flux

 

Low

Stability

 

Stagnation

 

These two matrices suggest there is a degree of change possible, or what Mintzberg (1973) calls process in the strategic environment.  Organisations are complex and only a strategic paradigm that allows for behavioural and emergent choice can allow for an organisation to interact with that complexity  (Combe 1999).  It could also be argued that the very existence of question marks in the matrix points to a strategy where cooperation with stakeholders is called for, and where consensus in direction is achieved through bargaining.  (Nutt 2002)

 

From the stakeholder and portfolio analysis a picture of an organisation begins to build up.  Further analytical tools can also be used.  SWOT analysis, looking and strengths and weaknesses within the organisation and opportunities and threats outside; PEST analysis, looking at Political, Economical, Social and Technological effects the outside world has on an organisation; environmental scanning, looking at the world around an organisation; scenario analysis, plausible scenarios map the potential impact on an organisations future (Heijden 1996); force field analysis (Ajimal 1985) force that impel action and those that impede action mapped out as high low and medium.

 

For the Big Society, these analysis may bring out the follow:

S                        Innovation, staff, inclusive vision

W                      Communication, financial awareness

O                       New source of funding, Lottery, Supporting People. IT

T                        Reliance on too few funders, increased regulations

 

P                        Local Authority policies

E                        Changes in funding posts

S                        Growing acceptance of inclusiveness, rejection of do-gooder

T                        Growth of IT, internet cafes, mobile phones

 

Environmental scanning

The attitude of local authorities to care regulations and issues regarding best practice, growing incongruity of residential care homes particular in a poor, even dangerous location, the changing world

 

Scenario analysis  

What if the charity was to sell its currently inaccessible buildings and move to accessible premises – what if the charity concentrated on support care – what if the charity was to split off the arts and education projects to form a separate charity – what if the charity were to merge with a charity in the same area of care – what is the charity were to drop mild from mild learning difficulties

 

Force field analysis

Impeding force such as decreasing number of residents in the hostel –– impeding forces such as accessibility to charity buildings for service users with mobility issues –activities- impelling forces such as increased communication with off-site projects – impelling forces such as increase number of referral for support

 

There can perhaps be little doubt with so much marketing information that a charity could build a sustainable successful strategy that could move an organisation from where it is now, to where it wants to be, that is “the achievement of its vision” (Davies 1995).  However, while Davies (1995) suggests that some strategies are planned and follow a linear conscious cybernetic line, others can be seen from the same analysis tools to have arisen out of circumstance.  The Duke of Wellington, quoted by Mintzberg in Davis (1995) contrasted two methods of strategic control - the French think of strategy as a harness, and when it breaks, they are lost.  Wellington thinks of strategy as a rope and when it breaks, he ties a knot.  His vision could be said to win the war, and yet he accepts that there is no certain strategy. 

 

In this sense it could be said that vision serves as an informal and personal cauldron from which strategies can emerge which are rich and flexible enough to deal with a changing world  (Mintzberg 1973) Strategies do not in fact emerge from rigorous analysis, but rather from a state of mind (Ohmae 1982), from the creativity caused by the “juxtaposition of vision [with] a clear picture of current reality” (Senge 1990) and the suggestion that such “creative tension” causes resolution: the achievement of the vision.  This suggests a driver other than strategic intent; that of a learning organisation, subject to chaos and responding though self-organisation and recognition of the “inter-connectedness” of an organisation’s functions. (Stacey 1991).  According to Chaos Theory (Gleick 1987) it is impossible to predict any event, but that change at the organisational level is not continually chaotic. Therefore in a chaotic scenario there is a way of coping with complex and unpredictable events and forming strategy (Combe 1999). It is possible, by anticipating events and intervening, to achieve a level of relative control (Davies 1995). There may be no way to know with certainty where the rubber band will catapult the vision once released, however a probable direction can be anticipated if we take into account everything we have learnt about rubber bands from our strategic marketing analysis.

 

Mintzberg (1994) concludes in The Rise and Fall of Strategic Planning that “the whole nature of strategy making [is] dynamic, irregular, discontinuous, calling for groping, interactive processes with an emphasis on learning and synthesis [compelling] manager to favour intuition.”  This would certainly seem to be the case at The Big Society, and it would seem to suggest that if an organisation is to make any strategic decisions based on the marketing analysis it has done then those decisions must take into account all the various schools of thought at work – cognitive, determinist, developmental, probabalist and chaotic (Combe 1999).  It would also suggest that strategic choices need to be evaluated to indicate their level of success, however, this needs to be in relation to the approach taken  - analytical, judgemental, bargaining, or inspiration (Nutt 2002).

 

It would appear, in relation to the Big Society that the best recommendations would not be for change in practice, as such change may affect the personality of the charity and the work it does, but to analyse the practice as it is and to embrace the developmental and chaotic approaches in order to fully enhance the creative potential that is available.  The tools of marketing analysis suggest, if anything, that the external world is getting ever more chaotic and therefore the best approach is to recognise this and find ways of taking advantage of it as an opportunity.  Finally the best lesson to be learnt (developmental paradigm once more) is to constantly listen to the stakeholders, as they will be the one catching the organisation once the rubber band has been released.

 

References

 

Abell, D.F (1980) Defining the Business: The Starting Point of Strategic Planning  Englewood cliffs, Prentice Hall

 

Ajimal, K.S. (1985) “Force Field analysis: a framework for strategic thinking”

Long Range Planning, October

 

Ali M, (1997) The D.I.Y. Guide to Marketing, Directory of Social Change, London

 

Brown, P (1992) quoted in Nonprofit marketing: The key to marketing’smid-life crisis”?” Clarke P, Mount P (2001) International Journal of Nonprofit and Voluntary Sector Marketing Vol 6:1, Henry Stewart Publications

Bruce, I. 2nd Ed (1998) Successful Charity Marketing: Meeting Need, ICSA Publishing: Prentice Hall

Bryson, J.M. 2nd Ed. (1995) Strategic Planning in Public and Voluntary Services, Jossey-Bass

Campbell, A.  Devine, M. Young, D (1990) – A Sense of Mission, Hutchinson

Clarke P, Mount, P (2001) Nonprofit marketing: The key to marketing’smid-life crisis”?” International Journal of Nonprofit and Voluntary Sector Marketing Vol 6:1, Henry Stewart Publications

Combe, I.A (1999) “Multiple Strategy Paradigms: An Integrational Framework”.  Journal of Marketing Management, Vol 15:5, Westburn Publishers

Courtney, R (2002) Strategic Management for Voluntary Nonprofit Organizations, Routledge

Davies, A (1995) The Strategic Role of Marketing, McGraw-Hill

Dibb, S, Simkin L, Pride, W.M., Ferrell, O.C. (1994) quoted in Nonprofit marketing: The key to marketing’smid-life crisis”?” Clarke P, Mount P (2001) International Journal of Nonprofit and Voluntary Sector Marketing Vol 6:1, Henry Stewart Publications

 

Gleick, J (1987), Chaos: Making a New Science, Viking

 

Graham, P (1994) “Marketing in the Public Sector: Inappropriate or Merely Difficult” Journal of Marketing Management Vol 10, Westburn

Grieve-Smith, J (1985) Business Strategy: An Introduction, Blackwell

Hamel, G, Prahalad, C.K. (1994) Competing for the Future, Wiley

Heijden, K, van der. (1996) Scenarios: The Art of Strategic Conversation, Wiley

Keaveney, P. (2001) “The Charity Brand and its identity – who you are and what you do” in Marketing For the Voluntary Sector, Keaveney, P. and

Kaufman, M. (Eds.)  Kogan Page

Klein, N (2000) No Logo, Flamingo

Mintzberg H, (1973) The Nature of Managerial Work, Harper Row

Mintzberg, H (1994) The Rise and Fall of Strategic Planning, Prentice-Hall

 

Nutt, P.C. (2002) “Making Strategic Choices”.  Journal of Management Studies, Vol 39:1, Blackwell Publishers.

Ohmae, K (1982), The Mind of The Strategist, McGraw-Hill

Sargeant, A (1999), Marketing Management for Non Profit Organizations, Oxford Univeristy Press, Oxford

 

Senge, P. M. (1990) The Fifth Discipline. The art and practice of the learning organization, Random House.

 

Stacey, R.D. (1991) The Chaos Frontier, Butterworth-Heinemann

 

Wise, D (1998), Accounting and Finance for Charities, For Love and Money, ICSA Publishing, Prentice Hal

 

Appendix

A critical evaluation of three of the referenced journals used in the essay.

 

Nutt, P.C. (2002) “Making Strategic Choices”.  Journal of Management Studies, Vol 39:1, Blackwell Publishers.

The article gave a clear discussion of strategic choice and examined ways in which the success of such choices could be made.  It clearly informed each stage of thinking in this essay, from the rational planning concepts at the beginning, to the purely inspirational concepts towards the end.  The majority of the companies used in the survey, 44% were not for profit organisation, and the sample of strategic choices number 315.  These two factors gave a solid backing to the arguments being put forward.  The article style was academic but not too complicated and the tables were clear and informative. The article leads to a greater understanding of the approach of hypotheses based testing and how academic conclusions can be drawn.

 

Combe, I.A (1999) “Multiple Strategy Paradigms: An Integrational Framework”.  Journal of Marketing Management, Vol 15:5, Westburn Publishers

The article introduced the schools of thought of rational/cognitivism, developmentalism, determinism, probalism and Chaos.  It also integrated these into tables to refer to each in terms of paradigms.  The article was extremely useful for comparison to the real world and to the Big Society in particular.  It introduces to the concepts of learning organisation and gave insightful and useful information in regard to alternative ways of perceiving strategy.  However, it could be argued the case study is a slight irrelevance, and particular so in relation to this essay.

 

Clarke P, Mount, P (2001) Nonprofit marketing: The key to marketing’s “mid-life crisis”?” International Journal of Nonprofit and Voluntary Sector Marketing Vol 6:1, Henry Stewart Publications

The article introduces the concept of exchange and non-exchange marketing.  It is useful for this essay in that it suggested marketing did not really fit the nonprofit sector.  However there seems to be much evidence to disprove this with books by Sargeant, Bruce, Courtney, Kotler and a host of others all relating how marketing does work for the sector.  It could be argued the article kept repeating itself and became stuck in a circular argument of its own making.

 

 

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