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12 December 2023

Internal wrangling can help lead way

By Knowledge at Wharton


After riding a wave of unprecedented industry growth and branching into fibre optics products, an established communications technology manufacturer faces the unthinkable: the market takes a sudden turn for the worse, leading to budget cuts and layoffs across companies in the sector.


Meanwhile, the firm’s R&D lab is pushing for the company to invest in a comprehensive expansion of its high-bandwidth fibre optics network to increase consumer access and drive sales.


Others at the company strongly disagree, believing that the market for fibre optics has dried up.

What should the company do?


According to Wharton management professor Sarah Kaplan, the best answer would not be immediately clear, and for good reason.


Managers often push for quick, bottom-line analysis, when facing uncertainty, but it might be more beneficial to encourage employees to champion alternative scenarios, or “frames”.


In her research paper “Framing Contests: Strategy Making under Uncertainty”, Kaplan details the decision-making process of an actual company (which she calls “CommCorp”), as it faced the bursting of the telecommunications bubble in 2001-2002.


What she found was that employees interpreted the market’s ambiguous signals from their own frames of reference and then engaged in a series of “ramming activities to mobilise others around a particular point of view”.


Frames that come to predominate and ultimately drive strategy are not the result of static points of view or sheer political maneuvering, but rather emerge from a “dynamic, purposive and politically-charged process”, Kaplan writes.


It’s a contest over what strategies should be pursued. Individuals’ frames can be transformed along the way, as each actor attempts to gain legitimacy for his or her interpretation, until one frame prevails.


In her analysis of CommCorp, Kaplan writes that she employed observation-based, ethnographic techniques to “uncover ‘the soft underbelly’ of strategy making by looking at what actors did individually and collectively to construct strategic choices”.


Over eight months in 2002, she studied two key initiatives that were strategic responses to the optical technologies market crash during that time.


To trace how individual frames contributed to strategy decisions, Kaplan looked at specific, key choices that were made in relation to these initiatives, and identified the cognitive frames of the actors involved.


“It is useful to conceptualise participants’ frames as the encoding of a variety of previous experiences –≠including individual career histories, project experience, functional membership, position in the hierarchy – and contexts, including the firm, the industry and the prevailing technological paradigm,” Kaplan writes.


“Each of these arenas had its own institutional logic that guided views and behaviour.”

Kaplan’s observations at CommCorp suggest an understanding of the sources of frames elucidates their effect in enabling and constraining an individual’s scope of action.


One of the initiatives that Kaplan studied, dubbed “Last Mile”, calls attention to this dual effect of frames.


Hugh, a senior scientist in CommCorp’s R&D lab, proposed the optical market crash should be met with aggressive investment in fibre optic networks to increase consumer access.


While Hugh’s pro-optical view guided his data collection efforts and presentations, employees outside that particular frame were not so certain, expressing doubt about whether the larger picture supported his view, or whether there were other, non-optical solutions.


Ultimately, Kaplan notes, Hugh and an associate reframed the project to minimise opposition and build “a coalition of supporters.

The final decision was to make a small investment to support a single product line rather than pursue the originally proposed major development project”.


Kaplan’s analysis of the “Last Mile” initiative reinforces some specific conclusions about framing practices:


1) People have a number of frames to draw upon, built up through past experiences across multiple contexts. These frames shape how they see a situation and what strategies they think a company should pursue.


2) Just as actors have a repertoire of frames, they have “multiple, sometimes conflicting interests, only some of which (in the CommCorp example) were relevant in a particular decision context. Some interests were tangible, such as getting a promotion or preserving one’s job. Other interests were intangible, such as being seen as an expert, gaining peer recognition or working on “cool projects”. Other interests had a collective aspect, such as a chance to contribute to the project team or support one’s own functional group.


3) Where frames about a decision don’t align within the organisation, actors engage in framing practices to increase the resonance of their own frames and mobilise action in a desired direction. Those actors who most skillfully engage in these practices will shape the frame which prevails. Therefore, frames shape strategic choices – not in a deterministic fashion but rather in one mediated by organisational framing contests.


4) When framing activities are successful, interests can shift, and new coalitions can form. “Coalitions are built around powerful frames [ones which resonate broadly], and powerful coalitions can shape policy,” Kaplan notes.


To realise the benefits of framing contests, conflict needs to be encouraged, Kaplan says.


Her first rule of thumb?


“Absolutely no ‘quickie’ brainstorming sessions,” she says. “People schedule themselves for two hours and expect to have brilliant ideas. It can’t happen in one session – it’s a process.”


Instead, she suggests that managers plan a series of meetings and events that are not tied to regular operating goals, interspersed with periods for new data collection, analysis and reflection.


Finally, Kaplan suggests that CEOs not always push for a quick answer or “the bottom line”.


“Take time to find out what the alternate scenarios are,” she says. (The New York Times Syndicate.)