Strategic Issue Management through Corporate Strategic Agenda
Markus Kajanto, Director, Corporate Strategy
Nokia Corporation, P.O. Box 226, FIN-00045 NOKIA GROUP, Finland
Telephone: +358 40 552 9710, Telefax: +358 7180 38866, Email: markus.kajanto@nokia.com
Matti Keijola, Researcher
Helsinki University of Technology, P.O. Box 5500, 02015 HUT, Finland
Telephone: +358 40 508 9739, Telefax: +358 9 451 3066, Email: Matti.Keijola@hut.fi
Tomi Laamanen, Professor
Helsinki University of Technology, P.O. Box 5500, 02015 HUT, Finland
Telephone: +358 400 609 544, Telefax: +358 9 451 3095, Email: Tomi.Laamanen@hut.fi
Markku Maula, Senior Researcher
Helsinki University of Technology, P.O. Box 5500, 02015 HUT, Finland
Telephone: +358 40 556 0677, Telefax: +358 9 451 3095, Email: Markku.Maula@hut.fi
A paper for the 24th Annual International Conference of Strategic Management Society
Track H "Corporate Strategy and Governance”
November 2, 2004
ABSTRACT
Companies have different ways of identifying and dealing with their most critical strategic questions and issues. This process is typically an emergent one, not always optimally structured to enable
the effective identification of the most critical questions and the appropriate allocation of top management attention and corporate intelligence support to answer the identified strategic questions. In
this paper, by looking into the practices of world leading firms and reflecting the practices with relevant areas of management research, the study contributes to the literature by developing a framework for managing strategic issues. The paper has implications both to scholarly literature on strategy processes as well as to executives in charge of managing the corporate level strategic issues in
their organizations.
KEYWORDS
Corporate strategy process, strategic agenda, strategic issue management
Strategic Issue Management through Corporate Strategic Agenda
INTRODUCTION
How do firms deal with issues that emerge outside their regular strategy processes? Dealing with
emerging issues is typically a similarly emergent process, often not intentionally structured to enable the effective identification of the most critical questions and the appropriate allocation of top
management attention and corporate intelligence support to answer the identified strategic questions. Yet, most companies end up doing some of their most far-reaching decisions based on such
non-optimal choice processes. As Cyert and March (1963) noted in their classical book on “A Behavioral Theory of the Firm”, organizational decision-making is commonly in many ways only
boundedly rational, driven by local problem-driven, temporally sequential search processes. Cohen, March, and Olsen (1972) comment on organizational decision making in a further analysis of
organizational decision making processes as follows:
“In a garbage can process there are exogeneous time-dependent arrivals of choice opportunities, problems, solutions, and decision makers. The logic of ordering is temporal rather than consequential. Problems and solutions are
attached to choices, and thus to each other, not only because of their means-ends linkages but also because of their
simultaneity. At the limit, almost any solution can be associated with almost any problem – provided they are contemporaries. This limiting case is, however, normally not observed in pure form. The process functions, but it functions within a structure of constraints on linkages between problems and solutions.”
Later research, including Ansoff’s work (1965; 1984), the subsequent work on strategic issue
management (Dutton et al., 1987a, 1987b), and the work on attention-based view of organizational
decision making (Ocasio, 1997) has picked up the challenge posed by Cyert and March (1963) and
Cohen, March, and Olsen (1972) for improving organizational strategic decision-making practices,
but even today, there is still lack of applicable approaches for firms to use in improving their attention focus and distribution in strategic issue management processes.
By looking into the strategic issue management practices of leading global technology corporations, and reflecting the practices on relevant areas of management research including literature on
strategy process (Chakravarthy et al., 2003; Chakravarthy et al., 1992; Pettigrew, 1992), attention-1-
Strategic Issue Management through Corporate Strategic Agenda
based view (Ocasio, 1997), environmental scanning (Daft et al., 1988; Hambrick, 1982), and strategic issue management (Ansoff, 1984; Dutton et al., 1987a, 1987b), we identify three archetypes of
strategic issue management systems and develop a framework for improving organizational attention allocation in dealing with emerging issues.
Our propositions help clarify some of the main phases and practical challenges of strategic issue management. In our analysis of strategic issue management practices, we distinguish between
three main phases of issue processing. We name the first phase as the issue recognition phase. The decision path of an issue starts in the minds of decision makers as a cognitive formation process that
is not always explicated or revealed to others. Receptivity to signals depends on the prevailing
dominant cognition and the context specific signal flow. Signals and issue existence are strengthened through discussions between decision makers and additional attention that is invested in the
emerging issue. Issues that pass beyond the social attention stage and are taken up in formal meetings, face the question of whether a firm should react to the issue or not. We call this second main
phase of issue processing as the issue analysis phase. Different firms have developed varying analysis
practices and processes to find out whether an issue requires action. The analyses may show that it
is necessary to take some action, but deciding what action to take may often be not self-evident.
Deciding on how to respond to an issue, deciding on the optimal structural setting, and getting the
business units’ commitment may be a slow process that takes time and sometimes significantly
slows down a company’s reaction to emerging issues. We call this third phase of strategic issue
management as the issue implementation phase.
The paper is structured as follows. Chapter 2 reviews prior research on corporate strategy processes, strategic issue management, and research on the attention-based view of the firm. Chapter
3 discusses the strategic issue management practices adopted by leading technology-based firms.
Chapter 4 puts forward our synthesis framework and propositions for future research. Finally,
Chapter 5 discusses our results and concludes the paper.
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Strategic Issue Management through Corporate Strategic Agenda
THEORY REVIEW
A considerable body of literature has examined strategy processes (Chakravarthy et al., 2003;
Chakravarthy et al., 1992; Pettigrew, 1992), strategic issue management (Ansoff, 1984; Dutton et al.,
1987a, 1987b), and environmental scanning (Aguilar, 1967; Daft et al., 1988; Garg et al., 2003;
Hambrick, 1982; Ocasio, 1997). In the following we will briefly review these bodies of literature in
order to build a basis for our framework of corporate level strategic issue processing, complementing and extending these prior bodies of literature.
Strategy process research (Chakravarthy et al., 2003; Chakravarthy et al., 1992; Pettigrew, 1992)
that has traditionally been dominated by the debate between emergent and planned perspectives of
strategy making (Ansoff, 1991; Mintzberg, 1990) has now in recent years started to converge toward an integrative synthesis where decisions and actions drive positional and capability advantages, organizational context determines the decisions and actions, and a dynamic equilibrium
is being created by top management through its continuous redefinition of the relevant strategy
dynamics of the firm (Chakravarthy et al., 2003).
Strategic issue management has evolved as a concept to describe how corporations manage the
most important strategic issues frequently emerging outside the annual planning cycle. Ansoff
(1984) defined strategic issue as a forthcoming development, either inside or outside of the organization, which is likely to have an important impact on the ability of the enterprise to meet its objectives. The primary collection of these issues is the key strategic issues list. For Ansoff a strategic issue
was something that needed management attention outside the annual planning cycle, sometimes as
a result of surprising events. Dutton & Duncan (1987b) extends the notion by discussing a strategic
issue array, a set of strategic issues that emerge as a result of strategic planning (and again feeding
back into strategic planning) and as input to initiation and implementation of strategic change
(which in turn also feeds back into strategic planning).
As a system to process strategic issues, Ansoff (1984) proposed the concept of strategic issue
management system (SIMS). He defined its content and relationship to strategic planning, responsi-3-
Strategic Issue Management through Corporate Strategic Agenda
bilities of the players involved as well as tools to be used. Regarding its implementation he stated
that “the acceptance of SIM by top management is the major problem to solve”. Since Ansoff,
strategic issues and their management have been extensively studied by Dutton et al. (1986; 1993;
1997; 1987a; 1983; 1987c; 1987d). These studies have included strategic issue diagnosis (Dutton et
al., 1983); strategic issues categorization (Dutton et al., 1987c); influence of the strategic planning
process on strategic change (Dutton et al., 1987b); forms, functions, and contexts of strategic management systems (Dutton et al., 1987d); the role of uncertainty and feasibility on the patterns of
interest around issues (Dutton et al., 1988); discerning threats and opportunities (Jackson et al.,
1988); and selling issues to top management (Dutton et al., 1993). Whilst Ansoff’s research was
prescriptive, Dutton’s research has contributed to the development of theories concerning the underlying factors and dependencies.
Research on environmental scanning and the attention-based view (Ocasio, 1997) complements
the existing research on strategy processes and strategic issue management systems. For example,
Ocasio regards organizations as systems of structurally distributed attention (Ocasio, 1997). According to Ocasio, cognition and action of individuals are not predictable from the knowledge of
individual characteristics, but are derived from the specific organizational context and situations
that individual decision makers are in. He defines attention to encompass the noticing, encoding,
interpreting, and focusing of time and effort by organizational decision-makers on both (a) issues;
the available repertoire of categories for making sense of the environment: problems, opportunities, and threats; and (b) answers: the available repertoire of action alternatives: proposals, routines,
projects, programs, and procedures. The key characteristic of Ocasio’s systems view of organizations is the relationship between individual and organizational information processing. This contrasts to the earlier perspectives of organizational cognition that emphasize the shared cognitions
of organizational members or its top management team.
Ocasio discusses three interrelated metatheoretical premises for information processing that
underlie the perspective on how firms distribute and regulate the attention of its decision-makers.
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Strategic Issue Management through Corporate Strategic Agenda
According to Ocasio, at the level of individual cognition the principle of “focus of attention” links
attentional processing to individual cognition. At the level of social cognition, the principle of “situated attention” highlights the importance of the situational context for decision makers’ action.
At the organizational level, the principle of “structural distribution of attention” relates to how the
firm’s economic and social structures regulate and channel issues, answers, and decision makers
into the activities, communications, and procedures that constitute the situation context of decision making.
At the individual level, attentional processes focus energy, effort, and mindfulness of organizational decision makers on a limited set of elements that enter in to consciousness at any given
time. Focused attention facilitates perception and action towards the issues and activities being
attended to. At the individual level, two models of attentional processing can be distinguished:
controlled and automated. In the case of automatic processing, actions are routinized and habitual.
In the case of controlled processing, the actions of decision-makers are triggered by the issues and
answers they recognize. However, given selective attention, decision makers are limited in the
number of issues and answers they can attend to.
In each situational context, there is situated attention that determines what decision makers do
and what they focus on. The focus of attention is triggered by the characteristics of the situations
the decision makers confront. The situational context provides a link between how individuals
think and decide in a particular context. The dynamics of attention focusing and issue strengthening are related to how an organization distributes and controls the allocation of issues, answers,
and decision makers within firm’s activities, communications, and procedures. According to
Ocasio, attentional processes of individual and group decision makers are distributed throughout
the multiple functions that exist in organizations, with different foci of attention in each local procedure, communication, or activity. We recognize that already Simon (1947) used a similar conception of organizations when he described organizational behavior as a complex network of attentional processes.
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Strategic Issue Management through Corporate Strategic Agenda
In summary, strategy research has reached an advanced stage of synthesis according to which
decisions and actions drive positional and capability advantages, organizational context determines
the decisions and actions, and a dynamic equilibrium is created by top management through its
continuous redefinition of the relevant strategy dynamics of the firm (Chakravarthy et al., 2003).
This paper seeks an understanding of how the top-level management of strategy dynamics in practice takes place. In doing this, we build on three streams of thought: Ansoff’s (1984) on strategic
issue processing systems, Dutton et al.’s (1986; 1993; 1997; 1987a; 1983; 1987c; 1987d) work on
strategic issue characteristics and issue processing behaviors, and Ocasio’s (1997) work on the attentional aspects of organizational decision-making.
REVIEW OF CORPORATE STRATEGY FORMATION PROCESS PRACTICES
Strategic planning practices have undergone significant changes from the 1960s and 1970s to
the late 1990s. Grant (2003) shows how strategic decision-making in major oil companies in the
late 1990s was occurring for the most part outside of companies’ strategic planning systems. The
strategic planning systems were less formal than in the earlier decades and numbers of corporate
strategy staff were greatly reduced. The planning systems had changed to have three roles: (1) as a
context for strategic decision making, (2) as a mechanism for coordination, and (3) as a mechanism
for control. The key processes within the first role were influencing the methodologies and techniques of strategic planning, and providing channels and forums for communication and
knowledge sharing. Grant (2003) argues that the effectiveness of the companies’ strategic planning
may have deteriorated in three respects. First, the shortening of the planning horizons may reflect
a shift in top management priority from long-term development to short- and medium term performance goals. Second, the transfer of responsibility from staff planners to line managers, while
solving the problems of formalization and detachment, also entailed a loss of analytical capability.
Third, while breaking down the rigidities of the old formalized planning systems and embracing
emergent strategy-making processes, the companies had done little in terms of positive measures
to encourage innovation in strategy making.
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Strategic Issue Management through Corporate Strategic Agenda
Extending Grant’s (2003) work on oil companies’ strategic planning practices, we examined the
corporate level strategic planning practices of major technology-based firms in the information
and communications technology sectors. Our analyses are based on both primary and secondary
material. In terms of primary material, we carried out a one-year long extensive in-depth case study
of one major firm’s corporate strategic planning and issue management practices with monthly or
bi-weekly two to three hour taped and transcribed interviews with managers involved with the development and management of the corporate level strategic planning practices. In addition, we interviewed representatives of other firms’ as benchmarks and studied the secondary material that is
publicly available on the strategy planning practices of Hewlett-Packard and IBM. In 2000 HP developed its strategy process as part of its “Reinvention” campaign by introducing different
schemes to facilitate emergent strategic decision-making (Zell et al., 2004). Similarly, starting in
1999 IBM replaced its annual strategy review process with a year-round series of topically focused
strategic assessments (Zell et al., 2004). The goals of IBM’s new process were (1) to ensure that
strategic issues are addressed quickly, (2) to create a more rigorous decision-making process that
would challenge assumptions and broaden their view of available options, and (3) to address crossunit issues missed in traditional business unit-centered process (CSB, 2000).
Instead of describing here in detail the characteristics of each studied firm’s strategic planning
and issue management systems and practices, we chose to focus on specific themes and challenges
that emerged while analyzing the issue management systems. We found three archetypical configurations of strategic issue management systems optimized for different purposes and were able to
compare the benefits and challenges involved in each of them. The configurations were

Detailed, in-depth strategic issue analysis systems optimized for the speed of response

Facilitated group work on issues optimized for augmenting an individuals’ capabilities

On-going strategic issue identification, analysis, and option preservation driven systems
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Strategic Issue Management through Corporate Strategic Agenda
Detailed, in-depth strategic issue analysis systems optimized for the speed of response
Analysis driven strategic issue management systems are optimized for the speed of response.
When a strategic issue emerges, either a threat or an opportunity, that does not fit to the regular
strategy processes of the firm, the analysis driven systems provide management the means to get
an in-depth analysis of the issue. The methodology for analyzing whether and how a firm should
react to a strategic issue is the intelligence core of the system. An eventual implementation is then
assumed to be relatively straightforward to perform as the firm gains information of what kind of
threat or opportunity it is facing. Implementation could be expected to take place either in individual business units or within the scope of a regular corporate strategy process. However, the
separation of analysis from implementation into different parts of the organization may make buyin more challenging in some situations.
A good example of this kind of an issue management system is IBM’s Deep Dive. Deep Dive
initiatives are 30 to 90 day efforts focused on specific strategic issues and opportunities that require in-depth analysis to determine the course of action. Four to eight analyses are underway at
any given time. They are staffed with a core (part-time) research team of four to six experts and a
consultant or facilitator from the corporate strategy group. Analysis work proceeds in a set of
three steps each involving the use of a specific tool. The steps are (1) defining the scope and generating alternatives, (2) analyzing alternatives, and (3) building the hybrid strategy. The output of
the analysis is a plan that describes the proposed course of action and the rationale. IBM believes
the superiority of the process is driven by four principal factors (CSB, 2000)

Issue-focused — deep dives are targeted around topical issues and opportunities rather
than artificial organizational boundaries

Breadth of alternatives considered — participants develop a broader set of more innovative
strategic alternatives than they would otherwise

Extent of reality testing — process tools facilitate articulation, then validation or rebuttal
of core assumptions regarding the nature of the problem and the most valuable strategic response

Proximity to emerging events — deep dives are initiated throughout the year as strategic
issues emerge; as a result, deep dives capture the “energy of the moment” to fuel better
strategic thinking (CSB, 2000)
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Strategic Issue Management through Corporate Strategic Agenda
Facilitated group work on strategic issues
Another archetype of strategic issue management systems is the facilitated group work type of
strategy issue management system. Companies using this kind of strategic issue management systems acknowledge that the efficiencies of task forces and teams working on strategic issues can be
improved by paying attention to how the group performs its activities. Facilitated group work on
strategic issues does not regard the role of analyses as central as the analysis optimized systems.
Instead, they emphasize the information processing limitations of individual strategists and teams
working in a non-facilitated mode. In order to compensate for these, the focus of these systems is
on the processes of how to create joint sense making among the participants and, in a facilitated
manner, make optimal decisions. “War room” techniques can be regarded to belong among this
kind of strategic issue management systems. The team assigned to a “war room” performs certain
activities and tasks with a pre-defined timeline and, at the end, decides what action should be taken
and who should bear the responsibility for the actions. It is very important to focus on the right
issue upfront, otherwise the team’s effort may be wasted.
A good example of the facilitated group work archetype is Hewlett Packard’s strategic issue
management system as reported by Zell et al. (2004). Hewlett Packard, a practitioner of the Hoshin Kanri planning system, felt the need to accelerate the entire strategy process, both strategy formation and execution. They developed a particular scheme called the “Garage Works” (GW),
which emphasizes support for group work and focuses on speed (Zell et al., 2004). Garage Works
is designed to help teams address problems whose constraints can be challenged, that are openended, and that require creative thinking. It aims for divergence of thinking at the outset, but convergence in the long-term. Garage Works aims to obtain deep commitment to decisions made at
the participants’ beliefs and assumptions to help ensure implementation. Elaborate settings designed for Garage Works are created at the HP headquarters for the teams. Significant preparatory
activities usually precede a workshop. A variety of methods are used to reach decisions and build
teams, and the events are facilitated by corporate strategy consultants (Zell et al., 2004).
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Strategic Issue Management through Corporate Strategic Agenda
On-going strategic issue management
The third strategic issue management system archetype that we identified is the on-going strategic issue management system. On-going issue management starts from the premise that issue
management has to be continuous in nature and that issues, at each point in time, may face different degrees of urgency and maturity. Some issues that would not be at one point in time recognized in in-depth analyses urgent or pressing issue could increase in importance significantly in the
future. Thus, an in-depth analysis at one point in time might miss the importance of the issue, and
the issue might be wrongly bypassed. Efficiency-driven, facilitated group problems solving might
force the issue to a premature closure if the issue would require time to fruition. Intensive approaches, such as war rooms, typically consume extensive amounts of organizational resources,
and as a consequence tend to have a limited time span. Moreover, the issues have to be fairly well
defined for such system to work effectively.
An on-going issue management system is configured to analyze, coordinate, and plan strategic
issues, but none of the issue management phases are necessarily forced to a closure. The analysis
and implementation sense making stages can go onwards for several years with different levels of
resource consumption and intensity if needed. The strength of an on-going strategic issue management system is that it creates continuity to issue management and helps preserve the strategic
options embedded in the strategic issues identified over the years. Moreover, it facilitates the buyin of the issue once decisions are made. At the same time, however, it has the downside that its
capacity may become saturated and that some decisions are not executed as fast as they perhaps
could have been done. The on-going issue management system resembles a new venture management process, where each issue would correspond to a venture that is created, developed, and
eventually integrated to the established business. The difference is that strategic issues are not ventures, but major strategic moves, either opportunities or threats, that a company is planning. Also,
ventures are typically more compact in scope whereas strategic issues in many cases have a very
wide scope of interfaces and influence, and are more difficult to define.
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Strategic Issue Management through Corporate Strategic Agenda
Summary of the three archetypical strategic issue management practices
All the three strategic issue management systems have been created in order to reach similar
goals in the strategy formation processes: timely decisions on issues as they arise, focused attention
without organizational restrictions, and ensuring in-depth evaluation of a wide set of alternatives.
The table below summarizes some of the key differentiating characteristics of the systems.
Table 1
Similarities and differences in the strategic issue management system archetypes
Aspect
Critical assumption
Emphasis in the process
Strategic Issue Management System Archetype
Detailed analysis of
Facilitated group
On-going strategic
strategic issues
work on issues
issue management
Fast, in-depth
Efficiency in team
Preserving valuable
analysis is the key
work is the key
options is the key
to good decisions
to good decisions
to good decisions
Analysis
Implementation
Both
Emergent
one-time
Emergent
one-time
Emergent and
cumulative
Issue analysis
Detailed analysis
practices and tools
Utilizing group's
analysis intelligence
Varying profiles
of resource use
Implementation plan
Part of the analysis
recommendations
Emerges as a result
of the group work
Sensemaking result
emerging over time
Proactiveness of action
Both proactive
and reactive action
Both proactive and
reactive action
Both proactive and
reactive action
Relatively fast after
the analysis results
Analysis does not
always imply optimal
implementation plan
Determined at the
initiation of work
Group self-sufficiency,
skills of team members
limited time frame
Non-determinable,
options preservation
Saturation of the
process and rejection
of new issues, speed
Issue identification
Speed of action
Potential challenges
In the detailed analysis focused system there is in-depth analysis that produces results in a fairly
efficient manner. A drawback of this approach may be that the optimization according to the
speed of decision-making may compromise options preservation and sometimes lead to too early
decisions. An analysis-focused system could be expected to be ideal in issue management situations, but less optimal when there are complex implementation challenges. The facilitated group
work on issues system may be better in this respect. Choice of group members can be used to already drive implementation. A drawback of this approach may be group self-sufficiency and the
scarcity of time. Finally, the on-going strategic issue management system enables a firm to perform
balanced in-depth analyses and implementation sense making. A drawback here may be the saturation of the process and a somewhat slower decision-making.
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FINDINGS EMERGING FROM THE OBSERVED STRATEGY PRACTICES
The design choices adopted by different firms for managing strategic issues emerging outside
the scopes of their regular strategic planning processes reflect the strategic contexts and the uncertainties and types of issues that the firms face in their own businesses. Based on the literature we
can divide the phases of issue management to (1) Issue identification, (2) Issue analysis and evaluation, and (3) Issue implementation planning and the eventual implementation.
Issue identification phase
As a somewhat surprising finding, the issue management systems that we studied do not seem
to be as concerned with the issue identification phase, as we would have expected based on our
review of the existing research. In none of the three strategic issue management archetypes, issue
identification seemed to be of any concern. There would seem to be a large number of many kinds
of issues emerging from the business units or from the external environment without much consideration to the mechanisms through which they emerge. As a consequence, it may be that instead of trying to sensitize the organization to identify the emerging issues, the real practical problem is how to choose the most important issues from a flood of issues that represent different
kinds of threats and opportunities of varying magnitude.
The challenge with a non-systematic issue identification approach is that there are a large number of issues identified, but the critical ones that would not fit to an organization’s present scope
may have hard time being recognized. This kind of blocking of “unfitting” issues can take place on
many levels: individual, social structural, and organizational. At the individual level, weak signals
are being received and fitted to an individual’s established cognition. Ocasio’s (1997) distinction
between automated and controlled processing of signals provides here a useful distinction. Typically, large numbers of signals are received in an automated fashion and the effect of signals is
commonly not separately explicated or revealed to others. Individual signal reception and acceptance are also selective according to an individual’s and an organization’s shared social cognition, an organizational established way of thinking. Bettis and Prahalad call this as the dominant
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Strategic Issue Management through Corporate Strategic Agenda
general management logic (1986). Strategic issues that eventually pass an individual’s filter can be
strengthened or weakened through internal discussions among key strategic decision makers. This
strengthening or weakening would correspond to Ocasio’s (1997) situated attention and social
cognition concepts. Discussions with other decision makers can help clarify the relationships between complex strategic issues and the established cognition.
Discussions can provide social support and encouragement for proceeding onwards with the
strategic issues identified. However, the social strengthening stage also provides a potential challenge for decision-making since discussions among decision-makers are likely to be more tied to
the existing social cognition than ideas that could still on an idea level challenge the existing cognition. Discussions require already more judgment and social risk-taking from the initiator than individual though experiments. Preliminary discussions can also lead into negative strengthening even
though the merits and problems of the issue would not have even been studied at this point. This
sub-stage of a strategic issue evolution could be regarded as the issue ecology stage.
Organizational structures for decision processing have a major effect on how attention to strategic issues is being directed. Issues passing the ecology stage are passed onwards according to existing organizational practices. At this stage the structural allocation of attention determines how
the issue is researched, strengthened, or even selected out. This stage poses also a potential challenge, since the existing organizational structures for allocating attention may be either too loosely
coupled from the strategic issue initiator that the issue is selected out already at the transfer phase.
The structures can also be so much driven by the existing cognition that deviations have significantly lower changes of survival than issues in line with the status quo.
Considering the multitude of gates and implicit screening filters in the above described process
and the strengthening needed before an idea can pass from one stage to another, the process is
likely to be biased an to some extent inefficient. The stricter and more critical the selection process, the more time and strengthening is needed before the issue passes from an individual’s weak
signal stage to a stage where the organization is committed to taking action on the issue.
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Strategic Issue Management through Corporate Strategic Agenda
Issue analysis and evaluation phase
Similar individual, social, and organizational biases are often present also in the issue analysis
and evaluation phases. The analyses are often either in part or in full performed by persons employed by the organization and socialized into the accustomed ways of thinking and acting. Structured analysis methodologies, use of external experts, and consultants can help alleviate these
problems, but removing them might be impossible. This analysis bias can be expected to increase
the more the emerging issue is against the prevailing ways of thinking and the existing organizational scripts. A good, well-documented example of such challenging thinking and analysis process
is the case of Polaroid’s entry to the digital imaging photography area, where Polaroid struggled
first to decide what to do with the disruptive change, and then how organize in order to become
successful in the new emerging digital imaging business logic (Tripsas et al., 2000).
The issue analysis phase is at the center of focus in the analysis driven issue management system. The analysis driven system provides an efficient, objectified analysis of each emerging strategic issue and fast decisions. There are always, however, also issues that cannot be resolved at the
time of the analysis. These kinds of issues are more optimally suited to a more gradual, optionspreserving issue management system. In addition to potential systems overload and also otherwise
potentially slower decision speed, an additional challenge with an options preserving system may
be that a decision process where decision makers become overly familiar with a topic, may in some
cases even lead to dynamism familiar from acquisition research, the escalating commitment
(Haspeslagh et al., 1991). Strategic issue initiators that have promoted the issue beginning from the
idea stage may become biased towards accepting the idea when it reaches the decision stage even
though the analysis results would be unfavorable. This kind of problem of escalation can be prevented in the analysis focused system, but it might be similarly present in the facilitated group
work on strategic issues, since group processes are typically established to optimize the speed for
reaching a specific objective.
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Strategic Issue Management through Corporate Strategic Agenda
Issue implementation planning phase
If the issue analysis and evaluation phase show that the strategic issue requires action the next
step is to determine what would be an appropriate course of action and who would be optimal for
executing it. In some cases, it might be relatively straightforward to determine which division or
unit will be responsible for driving the implementation. In other cases it might be necessary to take
care of interdivisional coordination or even create new structures for the implementation. If the
transfer of strategic issues for implementation to the implementing organization is not handled
with care, this stage may provide special challenges due to extensively documented problems of
separation of planning and implementation. The decision maker that has been the idea champion
is not necessarily anymore in charge of implementing the idea and may not be able to see how the
issue implementation is proceeding to compare that to the original opportunities or challenges that
the strategic issue was intended to solve when implemented.
In the analysis focused strategic issue management archetype, the implementation plan is assumed to emerge from the analysis process. If the implementation requires complex coordination
between divisions or business units and high levels of involvement, the system may cause the
problems of separated analysis and implementation. In the facilitated group work oriented strategic issue management, implementation problems may be reduced by having the persons potentially
responsible for issue implementation to participate in the group work process. The same logic is
applicable also in the on-going strategic issue management systems where the availability of time
makes it is possible to invite representatives of the potential implementing divisions or units to
participate in the issue management process in the different stages. If some representatives turn
out the be the wrong ones, then it is possible to invite other division or business unit representatives to participate in the issue management process. Being able to carry out this kind of an organizational sense making process is valuable, but the downside is that it consumes managerial resources, increases the time it takes to arrive at a decision, and reduces the amount of other issues
that can be simultaneously taken care of.
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Strategic Issue Management through Corporate Strategic Agenda
Summary of the applicability of the archetypical strategic issue management systems
When examining the nature and applicability of the three strategic issue management archetypes,
we note that they are rather equally performing in the identification of emerging issues. However,
in the issue analysis and implementation phases they have significant differences in their optimality. In order to demonstrate the optimality of the different systems on the basis of our analyses, we
categorized the strategic issue implementation challenges into procedural, structural, and fundamental implementation challenge categories. The analysis challenges we categorized similarly according to procedural, structural, and fundamental analysis challenges. Explanations of the catego-
IMPLEMENTATION CHALLENGE
ries and a summary of the optimal use of the issue management systems are provided in Figure 1.
Fundamental
Structural
Procedural
Internal intensive
analysis + Issue
abandonment.
Internal and external
intensive analysis +
Issue abandonment.
Internal and external
intensive analysis
+ Structural ”sense
making” implementation process
Internal deep dive +
Structural ”sense
making” implementtation process.
Internal intensive
analysis + Transfer to
implementation, e.g.
intensive group work
or divisional actions
Procedural
Internal and external
intensive analysis
+ Transfer to
implementation, e.g.
intensive group work
or divisional actions.
Structural
Internal and external
intensive analysis +
Option preservation
Internal and external
intensive analysis +
Option preservation
Internal and external
intensive analysis +
Option preservation
Fundamental
UNCERTAINTY
Figure 1.
Optimal use of different issue management approaches. Procedural uncertainty refers to uncertainty that can be resolved by analysis, structural uncertainty refers
to uncertainty that is caused by our different structures, and fundamental uncertainty refers to fundamental inability to know. Procedural implementation challenge refers to challenge that can be resolved by an appropriate process, structural
implementation challenge requires structural changes, and fundamental implementation challenge refers to impossibility to implement.
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Strategic Issue Management through Corporate Strategic Agenda
CORPORATE STRATEGIC AGENDA
Finally, as a synthesis of our multiple case analyses, we define a broader framework for corporate level strategic management and name it as the corporate strategic agenda. Corporate strategic
agenda can be defined as the set of key issues, decisions and programs that are considered strategically the most important from the corporate perspective. The focus could similarly have been put
on a business or divisional level. Our choice of the corporate level of analysis is, however, consistent with our primary focus on the first phases of the strategic issue management processes.
On the business level, more emphasis should be placed on the following up of strategic issue
implementation. Strategic issue management could also be seen to represent an important function
of the corporate parent. As Goold, Campbell, and Alexander (1994) point out, among the key
sources of parenting advantage are the parent’s mental maps. They are rules of thumb or mental
models that help a corporate parent interpret and synthesize information and that shape the parent’s perception of the different business improvement opportunities (Goold et al., 1994).
We define the concept of corporate strategic agenda to comprise five elements, as shown in
Figure 2: (1) Scanning of agenda items, (2) Item selection, (3) Item structuring, (4) Intelligence
support for the strategic agenda, and (5) Agenda management. The purpose of each of these elements is to help explicating the thought processes underlying strategic issue management. In particular, the purpose is to provide a framework that would overcome the challenges in strategic issue identification and implementation discussed earlier.
Scanning for
agenda items
· Internal and
external information sources
· Potentially
disruptive
changes
· Organization:
responsibilities
and processes
Figure 2.
Item selection
· Emergent or
analytical
· Selling and
gaining
acceptance
· Potential
biases
Structuring
· Item type
· Underlying
assumptions,
· Objectives and
constraints
· Priorities
· Number of
items: fixed
or flexible
Elements of corporate strategic agenda
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Intelligence
support
· Intelligence
requirements
· Organization:
responsibilities
and processes
Agenda
management
· Priority
management
· Update triggers
and frequency
· Organization:
responsibilities
and processes
Strategic Issue Management through Corporate Strategic Agenda
The scanning for agenda items is aimed at easing the explication of strategic issues. It helps decision-makers explicate and pool emergent ideas and get them faster to discussions with peer decision-makers. This can be expected to reduce the time lag that it takes for a strategic issue to take
shape. The scanning phase also provides an arena to collect emerging weak signals in a more structured fashion. An organizational intelligence function can also help identify emerging issues and
bring them to the attention to decision makers in a more concentrated fashion.
The biases resulting from existing organizational cognition, as well as structural and social realities, cannot be overcome in the item selection phase. It provides, however, an explicated process
for selecting among the emergent strategic issues. Issue and project selection systems exist commonly at more advanced stages when the issues and projects have already feasibility studies supporting them. Advanced item selection helps alleviate internal issue ecology challenges. The issue
structuring in our framework helps explicate and study the underlying assumptions and constraints
of each of the items on a corporate strategic agenda.
Decision-makers are often relatively alone with their ideas when a new strategic issue emerges
as a weak signal. In many cases, there are no other ways to take care of the situation than to wait
how things develop, discuss the issue with others, and then eventually at some point start taking
actions on the issue. The purpose of the intelligence support provided for strategic agenda items is
that intelligence support at an earlier stage helps speed up the analysis of emerging issues and prevents that the issues are discarded due to time constraints or due to other similarly emerging issues.
Finally, the agenda management aspect contributes to an orderly, explicit processing of strategic
issues and their transition to implementation. It helps bridge the gap between strategic issue identification and implementation by tracking the strategic issue implementation. In addition, it addresses explicitly the organizational responsibilities for the structuring of attention and provides continuous support for items on a strategic agenda. A systematic strategic agenda management process
may also help alleviate the challenges of adversely escalating commitment.
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Strategic Issue Management through Corporate Strategic Agenda
DISCUSSION AND CONCLUSION
In this paper we set out to develop a framework for managing emerging strategic issues at the
corporate level. In developing our framework, we resorted to an in-depth analysis of the strategic
issue management practices adopted by selected leading global technology corporations. Based on
our analysis of strategic issue system elements and practices, we identified three strategic issue
management archetypes. Our analysis of the three archetypes and their applicability for different
kinds of strategic issue management situations made it possible for us to recognize the challenges
of each of the issue management systems archetypes and put forward a model that would show
the optimal, problem eliminating way to use the different issue management systems.
Our paper provides guidance for top management and managers in charge of corporate intelligence and strategy processes on how to develop a methodology for managing corporate strategic
agenda. Corporate strategic agenda as a tool has been found to be an important approach for
managing identifying and dealing with most critical strategic questions and issues in our case companies operating in complex, systemic high velocity environments.
The empirical context of the paper is limited to a few leading global corporations in several
high technology sectors. Because of the small number of cases and their specialized context, the
findings of the paper may not be generalizable to other types of organizations. Our framework is
clearly most relevant to large corporations operating in complex, systemic, high velocity environments with high levels of structural and fundamental uncertainty. Future research could examine
the use, function, and effectiveness of issue management also in other contexts.
By examining the practices of world leading firms and comparing them to relevant areas of
management research including literature on strategy processes, attention-based view, and strategic
issue management, we develop a framework for positioning the different ways of managing strategic issues according to their optimality. In so doing we contribute to the literature on how leading
firms operating in complex, systemic high velocity environments manage their strategic issues.
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Strategic Issue Management through Corporate Strategic Agenda
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