Our favorite story about how strategy really gets made comes from a visit one of us—the lead author—made to a large company’s headquarters. The company controller was concerned and confused about a capital project proposal he’d recently received from one of the company’s most important divisions: a request for a large chimney. Just a chimney. Curious, the controller flew out to visit the division and discovered that division managers had built a whole plant (minus the chimney) using work orders that did not require corporate approval. The chimney was the only portion of the plant that could not be broken down into small enough chunks to escape corporate scrutiny.

The division managers, it seemed, were eager to get on with building a new business and had despaired of getting corporate approval within a reasonable time frame. Convinced that the new capacity was necessary, managers had found a way to build the plant but still needed the chimney. In the end, the division managers were proven right about the need for new capacity and also about the need for speed. The chimney was, ultimately, approved. But who (the controller wondered) was running the company?

Read More:

Bower, J and Gilbert, C (2007), How Managers’ Everyday Decisions Create—or Destroy—Your Company’s Strategy, Harvard Business Review, February, 2007