Definitions of the same management strategy terms can vary significantly between industry and academia, observes Dr Brian D. Smith.
Executives often confuse me. We’re all using the same vocabulary, but what they mean by a certain term — segmentation say, or diversification — seems quite different from the definition I apply. Like looking at a dog and a wolf, I can see the similarities and relationships, but we are talking about different things and the differences are important in practice.
I thought about this dog–wolf metaphor recently when I was trying to understand why it is that some of the most fundamental ideas in strategy have evolved to mean different things to different people. In particular, why is it that the concepts used by many executives bear little relation to the concept of the same name as it was originally defined? Then the explanation leapt out at me: it is memetics at work. Memetics is the study of memes, which are the cultural information equivalent of a gene.
Coined by Richard Dawkins in 1976, memetics describes how ideas spread and mutate in an analogous fashion to genes. In short, concepts thrive when they fit the environment and die when they don’t, unless they mutate into forms that have better environmental fit.
How does this explain the communication difficulties I was experiencing with executives? Well, a concept emerges — let’s say segmentation or product life cycle — into a certain intellectual environment — let’s say the academic literature. In that context, what determines survival is the ability of the concept to contribute to knowledge and withstand rigorous empirical testing. By contrast, the concept doesn’t need to be simple, communicable or actionable. The academic world doesn’t demand that.
Both our examples, now decades old, thrived because they help us understand how markets work and have survived numerous peer-reviewed tests. Then our concept moves, via business schools, into the business world. This environment demands different things. Executives don’t demand empirical proof. It’s sufficient if the definition is endorsed by the boss or used by an admired company. In their original form, neither segmentation nor life cycle are simple, actionable ideas and memetics would predict their rapid demise. Unless of course they mutate into something simpler, more communicable and easier to implement, even if the mutant lacks empirical proof. And that I think is what happens.
When I say segmentation, I’m talking about the complex idea of needs-based market heterogeneity. The executives I’m talking to are talking about the simplistic reduction of the market into nice easy data-sets. And when I talk about life cycle, I mean of the product form; they mean of their particular product.
Memetics has led us to a situation where the concept we use is a dumbed-down version of what was once a great idea when what we needed was for the concept to evolve into a more practically applicable species of the original. What’s to be done? Are researchers and executives bound to evolve into two tribes who can’t communicate? It’s certainly heading that way. But I’m betting on the evolutionary analogy coming to the rescue. We live in mutually-dependent web of life in which management researchers and executives need each other. We’ll find ways to work together.