Strategy & Organisational Change
SECURING SUPPORT FOR STRATEGY
WAYS TO FRAME YOUR STRATEGY
famous experiment by Nobel prize winner Daniel Kahneman and his long-time collaborator Amos Tversky uncannily predicted the Covid-19
how framing information in a business setting can affect decisions in a similar way. A classroom exercise involving 925 early- and mid-career graduates – all participating in organisational strategy, design and change courses – was carried out over a 22-year period. During that time, 190 teams of up to six people analysed a particular case and were asked to recommend a form of functional structure to support a new contract bid. The inclusion of two sentences by a single character named Datson had a drastic impact on which of the three strategic choices the teams selected. “One thing I want to make particularly clear,” Datson said, “nobody’s going to come into my department and tell my people how they must do their work. They report to me and my supervisors and we’re the ones who call the shots.” The negative framing of this “Do not assume that people will take objective information and statistics as seriously as they should. The framing of an idea changes the decisions that people make”
brief passage prompted hundreds of teams to spurn the strategic choice it represented. This remained true for 20 years. When those sentences were removed, for the final two years of the study, the same strategic choice was selected a third of the time, as would be expected statistically. The sentence was operationally irrelevant. Nonetheless, it seemed to pull on participants’ emotions. Hence, framing can shape how decisions around strategy, organisational change, or large investments are relayed and ultimately perceived by employees, customers, investors, and other stakeholders, as well as how conclusions are reached. Investors, for example, drive the value of a business partly When investors viewed it as a tech company in late 2022, the valuation was two-and-a-half times higher than it is now (and significantly higher than other car companies). In recent months, as perception has shifted towards Tesla being an automotive rather than a tech firm, the valuation has fallen dramatically. Consequently, there are useful based on how they perceive it, beyond the realms of any objective financial analysis. Tesla is a case in point. lessons for leaders and managers on how to frame a strategy to ensure staff and other stakeholders back it. 1 Emotions rule people’s decisions Do not assume that people will take objective information and statistics as seriously as they should. The framing of an idea changes the decisions that people make. Humans do not view things objectively but rely on emotion,
pandemic way back in 1981. Participants were told to imagine the US was preparing for the outbreak of an unusual disease from Asia. Instead of millions of deaths, participants were told scientists expected the disease to kill 600 people. Two alternative programmes were proposed to combat the disease. Crucially, Kahneman and Tversky discovered that the framing of the message affected how people would behave. If the programme was framed positively, telling participants that 200 people would live, it was chosen by 72 per cent of respondents. When the same treatment was framed negatively – i.e. it would lead to 400 people dying – the number of participants who chose it dropped to 22 per cent. Four decades later, the findings helped behavioural scientists to mobilise millions of people across the UK to get the Covid-19 vaccination, despite a barrage of online misinformation. It is a powerful example of how ‘framing’ information can drastically influence the way people perceive it and the decisions they make as a result. The power of framing is the reason why ‘spin-doctoring’ exists as a concept and is regularly deployed – with varying degrees of success – by governments to present policies in a particular light, and by corporations that want to be seen as addressing
by Loizos Heracleous
TO THE CORE
1. Don’t assume that people will take statistics as seriously as they should. The framing of an idea changes the decisions that people make. 2. An implicit storyline that invites moral considerations and emotions into the decision-making process can create buy-in for a strategy. 3. Ensure other departments understand how a strategy is being framed and why. Consider training staff in how to frame their messaging. 4. Recognise that your own decision-making can be influenced by instinctive reactions and adopt measures to ensure you assess decisions objectively.
opinion, and connotations; their decisions are shaped
grand societal challenges. Our research has shown
Warwick Business School | wbs.ac.uk
wbs.ac.uk | Warwick Business School
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