Most executives believe that by collecting data about their strategic challenge, using their own business knowledge, and applying some logic will guide development of a successful strategy. But if that is all that is required, why do so many company strategies fail? Certainly, the management teams of Blockbuster (missed Internet video rental market), General Motors (over-reliance on robotics manufacturing before the technology was effective) and Samsung (misguided entry into automobile production) employed these simple management techniques. But still, they failed to develop a successful strategy. Let’s examine a military example to understand how perceptions can force companies to select a doomed strategy.
In 1863, the Army of Northern Virginia was on a roll. Robert E. Lee’s force had won the battle at Chancellorsville against a numerically superior Union enemy. Days later, during the defense of Fredericksburg, Lee’s troops decimated the Federals. Within weeks of these victories, Lee’s army approached Gettysburg with an attitude of invincibility. Lee and his generals knew that if they could rout the Union army at Gettysburg, the Confederacy would have free reign to drive into Philadelphia, Baltimore and Washington, capture important supplies that could feed and outfit Lee’s army, and establish battle lines to the north of his home state, Virginia.
But by the third day of the battle, the Army of Northern Virginia had been rebuffed. So, Lee commanded his army to attack the Union’s center position in an encounter now known as “Pickett’s Charge.” Lee believed that by taking Cemetery Ridge, his army could flank the Union forces on Cemetery Hill and turn the tide of battle. Approximately 12,500 Confederate soldiers from 9 brigades assembled on the battlefield. Three quarters of a mile away, 6500 Union soldiers waited behind the stone walls of Cemetery Ridge, supported by about 80 cannon.
At noon, Lee’s artillery pounded the Union lines with a massive barrage. The Confederates started crossing the field at 2 PM, advancing in a line that stretched almost a mile. Their march was slowed by fences across the field which left them bunched up and open to Union fire. When the troops reached half way, they were forced to climb the slope towards the ridge top. Union cannon, unaffected by the Confederate bombardment, and rifle fire decimated the Confederate attackers, so when the soldiers came within 400 yards of the Union position the Reb line had shrunk to less than half a mile. The Confederate combatants charged once they closed within 300 yards, only to be cut down by cannister and musket fire. Led by General Armistead, some Confederates crossed the Union defense lines, but they were quickly pushed back from the “high watermark of the Confederacy” — the farthest north Lee’s army achieved.
The casualty list defined the failed strategy. Lee’s army lost 6,555 soldiers (1,123 killed, 4,019 wounded, the remainder captured). 26 of the 40 field officers leading the charge were lost as well as all 3 battlefield generals.
How did perception doom Lee’s strategy?
While several tactical errors made significant contributions, the Gettysburg loss started with a poor strategy based upon inaccurate perceptions of the situation.
- Lee changed strategy just before Gettysburg without fully analyzing its impact. Before Chancellorsville, most of Lee’s victories resulted from a defensive strategy. Lee would force the Union army to attack, which resulted in such significant troop loss that the Confederate counterattack succeeded. Lee’s aggressive strategy at Chancellorsville spurred the new offensive strategy implemented just prior to the Gettysburg encounter.
- The general’s expectation of victory was founded in the aura of invincibility that permeated the Confederate army’s ranks, saying “if properly led (my troops) will go anywhere and never fail at the work before them.”
- Lee’s frontal assault strategy was based on outdated Napoleonic tactics. This assault strategy no longer worked because the longer range of the Civil War rifle and cannon could obliterate the attacking Confederate ranks before they could engage and left too few combatants to consolidate the victory.
- He failed to accept that his lieutenant’s flanking plan would achieve victory, instead misinterpreting it as changing the goal. General James Longstreet opposed the attack because the, “enemy’s position was so powerful, entirely sweeping the 1200 yards over which we had to advance, that it was of doubtful success.” He was correct. The Union cannon range could reach confederate troops the moment they entered the battlefield. Federal soldiers were ready, with a firing range of 300 – 400 yards (or 1/3 of the distance the Confederates crossed) and capable of firing 3 shots per minute.
- Lee underestimated how significantly the lay of the land and the pasture’s fences would impede his army’s progress.
- The general felt that throwing more resources against the foe would guarantee victory.
- Lee developed no contingencies, so when the coordinated attack on secondary targets was ruined by an early morning Union offensive, the army failed to adapt.
What lessons can we executives obtain from the Gettysburg battle?
Practically all of Lee’s perception errors are made by business leaders today. We select strategies before they are fully vetted. We let overconfidence impact how our firm operates. And when things don’t progress as planned, rather than reevaluate our strategy, we throw more and more resources at the problem. Some of us are so confident in our capabilities that we fail to heed the advice of our team; instead, we forge ahead with our plan. Many organizations embark on a new strategy without even assessing the market; we create strategies in the vacuum of our own executive board rooms. These approaches can doom our company strategies as certainly as Pickett’s Charge.
Finkelstein observes, “Executives fail because they create and live in organizations where mistaken pictures of reality take hold, delusional policies and attitudes protect that skewed reality from careful scrutiny, organizational procedures designed to manage information, risk and people break down and leaders adopt spectacularly unsuccessful habits.” 1 The same could be said of the Confederate army on July 3rd, 1863.
So, how can executives avoid this? The best way to prevent perception from negatively affecting strategy formation is to establish a process before a strategy crisis arises. Having a process in place guides the executive team to analyze all the vital facts to ensure that the optimal strategy is selected. It prevents biases and perceptions from overruling facts and logic. A recent survey of over 2400 executives indicated that 97% of “successful strategy” firms utilized a defined strategy formation process versus only 20% of “unsuccessful strategy” firms. Implement a strategic decision process and prevent perceptions from undermining the selection of your company’s best strategy.
1 Why smart executives fail, 2003
Photos courtesy of Wikipedia and Gettysburg Museum