Goal-obstacle conicts

Paul N. Avakian

Paul N. Avakian is an independent consultant based in Massachusetts, USA.

n conference rooms across most of the worlds seven billion corporations, strategic planners sit with their PowerPoint presentations or bound strategic plans, and after all the others have left the room, look back on the process that has cost so much and yielded so little. They recall the initial fanfare and strong words of endorsement used to launch the strategy process, and weigh it against the perfunctory effort given by the same people that were so vocal about its importance and wonder if they have been indulging in a futile game. Little of what went into or came out of the process is new, and much of it is supercial. And each of the people that were a part of it knows from experience that nothing will really change as a result.

We must begin with this image because for the overwhelming majority of companies strategy is a hollow process that consumes the organizations best resources over extended periods of time. Year after year, a Bain & Company study of management tools cites high levels of dissatisfaction (77 percent) with strategy methodologies, naming core competencies, portfolio analysis, mission and vision statements, scenario planning, reengineering, competitive gaming, market migration, and value chain analysis among the 66 methodologies it follows that prescribe very different, sometimes conicting theories for strategy formulation (Rigby, 2007). Bains study and others like it is more evidence that at the guru level, strategy is a concept that can be refashioned and extended ad innitum. But at the senior manager level, where it really counts, it is a murky, struggled-with organizational task that rarely delivers on its promise. But the continuum of strategy methodologies and the confusion it bears is only part of a much bigger problem: strategy is a waste of time for most organizations because they are working with methodologies that have little to do with strategy in a real sense. For most companies the call for strategy translates into a representation of the companys broad agenda or long-term direction. But against the realities of complex competitive environments, these are vague and powerless generalities. Perhaps we should look to other elds for answers. In explanations for success in every other category of human pursuit we nd a prominent reference to power. Each of the most illuminating writers in the areas of politics, foreign relations, anthropology, ethnology, social psychology all areas concerning the human will and its movements have sifted their topics through the subject of power, as if to say; we cannot understand this facet of life without rst understanding power and how it is involved. And yet in the business literature none of the important work deals with power directly, or refers to it in any meaningful way to explain what goes on in commercial environments, where power is clearly the commodity that matters above all else. Strategy becomes relevant when there is an objective and opposition to that objective. If there is nothing impeding a desired result, then there is no need for strategy, so that strategy, fundamentally, is about resolving goal-obstacle conicts which inevitably involves the use of power in some form. And if power is the ability to overcome resistance, then the study of power is really a study of resistance and how it manifests itself against the goal at hand.

DOI 10.1108/17515630910989187

VOL. 10 NO. 5 2009, pp. 287-295, Q Emerald Group Publishing Limited, ISSN 1751-5637

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In the pursuit of everything valuable there is contention and opposition, and the more prized the object, the more powerful the forces that oppose attaining it. There is resistance that comes from others chasing the same thing but there is also systemic or infrastructural resistance, which is often more powerful. The immigrant who seeks a better situation in life is impeded not just by the existence of same-seeking immigrants, but also by larger obstructions: the cultural and language barriers, the prejudices, societal norms, legal realities all of which oppose what he/she pursues. The unestablished artist is inhibited not by other artists but by self-doubt, mass culture, an unfavorable artist/venue ratio, the vagaries of what makes for good art. This kind of systemic resistance is just as real for the politician as well. He/she is not battling other politicians necessarily, but the publics resistance to the goals and ideas he represents. Likewise in the commercial realm. A company selling its products is limited not so much by the existence of a competitors offering, but by other factors: the inherent resistance in customer buying processes, deciencies in its ability to reach or access markets, inadequacies in its direct selling channels, imperfect relationships with resellers, by the conicting agendas of other players who may have more power, by a supplier who cannot keep up with demand, by original equipment manufacturers (OEMs) that are slow to innovate. These are the real things that limit a companys ability to sell its product, much more directly than competitors products.

The nature of resistance in commercial environments

Few companies think much about resistance beyond the recognition of competitors, but in fact more powerful opposition lies elsewhere. Businesses operate in environments that are saturated with resistance. On some level, each of the entities comprising a marketplace (customers, suppliers, competitors, standards bodies, regulatory agencies, retailers, distributors, OEMs) represents resistance because unless their goals and agendas are perfectly aligned with yours, they are acting in their own best interest and not yours. Any effort to sell more, enter new markets, launch a novel product, will always be resisted by the marketplace at large so that inevitably, a companys ability to realize its goals (fulll its strategy) is a function of its ability to deal with resistance; to recognize it rst of all, and then to nd ways to overcome it. Customers pose resistance because of their ability to choose other suppliers of similar products, or another solution altogether. Their allegiances, legacies, biases, changing requirements, the obscurities of their buying processes, all work together to produce resistance. Incompetence in a companys direct sales channels, or the wrong incentives or compensation structure, or inadequate training or a selling approach that is ineffective all pose resistance. If a company uses distributors or other independent selling agents who represent complementary and sometimes competitive products, then a drag exists on that companys ability to sell its products because those channels are unwilling or unable to spend 100 percent of their time with that companys products. Likewise, a company that depends on an outside source for a key component or technology should realize that the producer of that component has a goal that is at odds with that dependency. Ultimately, it is that sources objective to develop and sell as much as it can of its product to the widest possible customer base, which translates into incongruence and eventually resistance. Companies that operate in regulated industries or whose success depends on sanctioning bodies or standards groups face resistance because these entities are deciding things for a greater good, which is usually at odds with those companies goals. With revolutionary products, resistance manifests itself as a lack of a cultural or commercial infrastructure for the new product or service, as a consuming public that has no idea they have a need for such a product, or as conduits to merchandise the product/concept that dont yet exist. Edwin Land, inventor of the Polaroid camera and founder of the company around it, said of his invention:
The second great invention for supporting the rst invention is nding how to relate the invention itself to the public. It is the publics role to resist. It is the duty of the inventor to build a new Gestalt for the old one in the framework of society. And when he does his invention calmly and equitably

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becomes a part of everyday life and no one can understand why it wasnt always there. But until the inventor has done both things nothing has any meaning (Land, 1975).

Where revolutionary products have been absorbed into everyday life, we can trace the phenomenon to gating resistance that has been overcome. In 1965, a charge card that could be used inside and outside state boundaries, universally, in any kind of purchase situation, was an unknown concept. Its implementation required massive cooperation from the banking and merchant infrastructure, which had been unwilling to foot the expense and risk in adopting such a system. Without a signicant cardholder base, banks and merchants (all or most retailers, hotels, restaurants, airlines, etc.) would not support the idea. Only after BankAmericard and Master Charge mailed hundreds of millions of unsolicited cards to consumers, from 1966 to 1970, was a sufcient cardholder base created, and opposition from the banking and merchant communities overcome. In 1968, an unknown sneaker company with no selling or retail channels, in a market long-dominated by Adidas and Puma, seeded the market with free sneakers to high-prole athletes and celebrities, which led to their ability to secure equipment contracts with collegiate and professional teams creating a logo consciousness that changed fundamentally the marketing of athletic footwear, apparel, and equipment. For Nike in those formative years, resistance posed itself as a lack of access to the mass market. Perhaps no convergence of technologies has had a more dramatic effect on how we live our lives than todays connected world. The simultaneous advancement of semiconductor, computer hardware, software, and communications technologies has forever changed how people behave and spend their time, let alone how they transact and interact. And perhaps the browser was the catalyst for connecting all the pieces, and turning a collection of disparate, discrete computers and databases into what we have today. But in the early 1990s no one knew what a browser was, or what it meant they could now do, or why they needed or should want one. People were happy just to have a small computer on their desk. And so the task for Netscape, a small programming company with no ties to other software companies that could serve as distribution conduits, no connections with the hardware world that could help proliferate its software, and no sales or distribution resources of its own, was to somehow get its software installed onto a critical mass of PCs. Inside of two years, through free downloads, Netscape moved its software into 60 million computers overcoming public ignorance about browsers and the worldwide web, and its lack of selling channels or distribution arrangements. While defeating resistance sometimes involves the power of free, as in the examples above, more often it involves leverage. In a small, obscure book published in 1978, management professor Ian MacMillan wrote about a political approach to strategy, where an actor, recognizing that the achievement of its goals is going to be inuenced by the behavior of other actors in the situation, undertakes action against others to ensure that its own goals are realized (MacMillan, 1978). He describes political strategy as a process whereby a manipulator unilaterally restructures conditions in the environment in a way that the opponents decide on courses of action desirable to the manipulator. MacMillan goes on to dene four ways in which companies manipulate other companies:
[. . .] inducement, where the opponents circumstances are improved by the selection of the manipulators desired alternative; coercion, where the opponents circumstances are aggravated by not selecting the manipulators desired alternative; persuasion, where the manipulator presents arguments of logic and reasoning to the opponent; and obligation, where the manipulator presents arguments which suggest that the opponent is in some way bound to follow the manipulators desired alternative out of a prior understanding or agreement.

Perhaps pharmaceutical marketing practices provide the best recent example of behavior inuencing as a method of overcoming resistance. The new economics of drug discovery have pushed drug companies to nd ways to recoup faster the several hundred million dollar investment involved in bringing a drug to the FDA stage. As a result, drug companies have become much more aggressive in selling their products at both the physician and consumer level, much of it enabled by the industrys lobby of Congress to relax drug marketing and patent law, itself an act of behavior inuencing.

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Up until the 1990s, resistance for pharmaceutical companies came in the form of the long, drawn-out conventions of drug approval and prescribing, traditionally involving ten years or more of physicians becoming comfortable with a drugs ability to safely help their patients. But the drug industry has found ways to alter and inuence prescribing behavior (much of it controversial but allowed and effective nonetheless): remunerating doctors for prescribing a new drug or for moving a patient off a competitors product; compensating doctors for writing articles favorable to a new drug; rewarding prescribers with dinners, trips, gifts; encouraging off-label prescribing (prescribing a drug for a condition different than what it was approved for). Direct-to-consumer advertising, permitted under a 1997 legislative change[1], allows drug companies to inuence behavior at the patient level, prodding people to ask their doctors for prescriptions[2]. By now we are all familiar with the factors that enabled Microsoft to push DOS into the emerging PC infrastructure in the 1970s, and so it serves as a useful example to further examine behavior inuencing as a strategy theme. Microsofts purported goal of a PC on every desk running its software was opposed by several marketplace realities, all centered on a slow-moving, scattered, undeveloped infrastructure. It faced resistance from the hardware community, most notably IBM, which was reluctant to help build something that would cannibalize its mainframe and workstation business. And if IBM did move into PCs, it wanted an IBM operating system, not a third-party solution. At the same time, Microsoft understood that the potential for the PCs mass proliferation was limited by the availability of applications software, that without such applications, interest in the PC would be limited, which in turn would limit the hardware communitys interest in advocating the PC. For Microsoft to overcome resistance and succeed in coalescing a group of evolving companies, each with their own goals and agendas, around a standardized DOS-Intel architecture, it had to create a situation where it was in those companies best interest to cooperate with Microsoft, which it did through various incentives and inducements, as shown in Figure 1. It all looks straightforward in hindsight and it is unclear how much was formally thought through beforehand. But it does not make the analysis any less useful in understanding resistance and the action taken against it. And in fact it reveals something about the insight involved in understanding resistance and identifying programs to deal with it. It shows that this kind of analysis requires understanding the relative power of the players involved, their agendas and methods, their technology and relative value, their resources and direction, that it involves seeing the potential for creating dependencies, and opportunities for partnering. For Intels role in the proliferation of the PC, resistance came from its own customers PC OEMs that were reluctant to adopt Intels new processors and slow to design more powerful PCs that took advantage of their advanced features. Intels business model required that it continually advance microprocessor technology and drive higher consumption rates, that its customers grow and innovate at a pace consistent with Intels chip-fabrication facility build rate. Without this, Intel would be vulnerable to its competitors ability to catch up with its technology and establish relationships in the PC OEM community. To offset this resistance, Intel embarked on a number of programs inuencing demand of its customers customers by running advertisements that appealed to end-users want for faster PCs with more processing power, rewarding PC OEMs with advertising subsidies proportionate to the quantities of microprocessor units purchased, introducing products (PC motherboards) that competed with its customers products, allocating supply based on how much business each OEM does with Intel[3].

Resistance mapping
Ideally, if we are to understand the full range of resistance coming to bear against a goal, we ought to spread out all possible sources of friction and examine their propensity to pose opposition to the goal at hand. We should seek a universal scenario that allows us to model resistance in any commercial pursuit, regardless of an organizations products or markets. Such a scenario is found when we consider what makes it impossible for an organization to sell an innite amount of its product. It is a state that is universally unachievable because organizations are either sales-limited or production-limited; that is, they are either

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Figure 1 Creating a PC infrastructure around DOS

constrained by their ability to sell product, or their ability to produce product, shown in Figure 2. For the purposes of this article we will concern ourselves only with situations that are sales-limited; where a companys ability to sell product is constrained either by customer resistance or channel resistance. Customer resistance Commercial pursuits, suggested Igor Ansoff in Strategic Management, take one of four forms: 1. increasing penetration in current markets with current products; 2. selling current products into new markets; 3. selling new products to current markets; or 4. selling new products to new markets. Figure 2 Generic resistance map: where resistance resides in commercial environments

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And each involves different kinds of progressively greater resistance. Increasing penetration in current markets with current products means driving more of ones products into established markets, which requires either selling more product to current customers, or selling to competitors customers. Here resistance is generally concerned with customer buying process issues, some of which are concrete and denable, and some of which are unknowable or intangible (Figure 3). The main resistance in expanding into new markets with current products is a of lack of access to/a relationship with the new market, shown in Figure 4, which manifests itself as an indifference or ignorance toward the companys products. Selling new products to existing customers is seldom easier because with customers there is always resistance to change. The new product may be technically superior to the old solution and may even be less expensive, but the fact that is new and involves changes that the customer must deal with means that it will be opposed on some level (Figure 5). The fourth scenario, selling new products into new markets, involves resistance posed by the organizations lack of presence and familiarity with the new market, compounded by the markets ignorance and disinclination to the unknown product, which invariably creates a difcult proposition (Figure 6).

Figure 3 Generic resistance in a market penetration scenario

Figure 4 Generic resistance in a product development scenario

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Figure 5 Generic resistance in a market development scenario

Figure 6 Generic resistance in a diversication scenario

Channel resistance As Figure 7 shows, in direct selling channels, resistance manifests itself as conicts, gaps or incompetence. A sales force may not be adequately trained, motivated properly, or there may be inherent incompatibilities between the selling approach being used and the selling approach required. With indirect selling channels, there is less control, and therefore more opportunity for resistance. Distributors, manufacturers reps, retailers, and other independent channel entities all represent competing or complementary products, and the battle is always with getting them to focus on your products. Original equipment manufacturer channels (OEMs), where a companys product is a component of a larger product sold to end-users, pose the same kind of resistance, but here there is added dependency. Companies that use OEMs will only sell as much of their product as the OEMs marketing, distribution, pricing and understanding of the market will allow.

Conclusion
The management literature has historically shied away from addressing power and how it is involved in the vying of companies for customers and technologies and distribution outlets, but to do so disserves our understanding of strategy in a practical sense. All companies operate in power-dependent environments, and all companies presumably have goals, and, whether they recognize it or not, face resistance beyond the existence of competitors. The key is to be able to see resistance, to understand how it manifests itself against a specic goal. Only then can a company be specic about how to defeat it. Only then can it identify/generate the means and methods necessary to neutralize it.

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Figure 7 Generic resistance map: direct channels

More than anything else, the success of the companies above is explained by their capacity for overcoming resistance. We cannot attribute it to a compelling vision statement, or a ve-year plan, or a competitive analysis, or any of the other strategy approaches used by the majority of companies. Few companies think much about resistance beyond the recognition of competitors, and this perhaps explains why strategy is an empty exercise for most.

Notes
1. DTC advertising was legalized in the USA after a 1985 FDA ruling, but the agency required drug companies to include comprehensive warnings in the advertisements on the risks of the drugs. In 1997 the FDA changed this rule, allowing shortened warnings, effectively opening up DTC advertising to much wider usage. 2. According to a 2002 FDA study, of patients who had seen DTC advertisements, 34 percent said they had asked their physician to prescribe a drug they had seen advertised. Nearly all of the patients (91 percent) who asked for a drug they saw advertised and received a prescription got the drug they requested. 3. For a more comprehensive discussion of Intel and Microsoft strategies in the PC industry, see Avakian (1999).

References
Avakian, P.N. (1999), Political realities in strategy, Strategy & Leadership, Vol. 27 No. 6, pp. 42-8. Land, E. (1975), People should want more from life . . ., Forbes, June 1, pp. 48-50. MacMillan, I. (1978), Strategy Formulation: Political Concepts, West Publishing, St Paul, MN, p. 9. Rigby, D.K. (2007), Management Tools 2007, Bain & Company, Boston, MA.

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About the author

Paul N. Avakian is a consultant to advanced technology companies, where his practice is focused primarily around planning and strategy, new product/service development and positioning, and industry trend analysis. Prior to his independent practice he was director of strategic planning at GTE, where he led the company through the business planning and strategic positioning for its advanced communications switch technology and its public key security technology. Prior to that Paul was a senior consultant at The Yankee Group, where he managed large research-based consulting projects for telecommunications clients. He holds an MBA from Babson College and an engineering degree from Worcester Polytechnic Institute. Paul N. Avakian can be contacted at: pna.bss@verizon.net

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