Everything I Know About Strategic Management I Learned From Dallas

 

Although significant scholarship has gone into the assertion that the courage and convictions of Margaret Thatcher, Ronald Reagan, and Pope John Paul II were the major drivers in the stopping and then rolling back of the expansion of the former Soviet Union, there was one key player whose contribution should not be overlooked.  I’m referring, of course, to J. R. Euwing.

That J.R. Ewing had a role in the bringing down of the Berlin Wall was not my idea, though I am at a loss as to whose it was. Whomever it was, they’re brilliant, and, as I understand it, the dots are connected so: when Mikhail Gorbachev introduced the notion of glasnost, part and parcel of this new openness was to pipe in some American television programs into the Soviet Union. One of the programs re-telecast was the nighttime drama Dallas, the story of an independent oil company owned by the Ewing family. It is speculated that the high-level members of the Communist party allowed the airing of Dallas in order show to the Soviet citizenry the craven, immoral side of unbridled capitalism. Instead, what they saw were Mercedes-Benz sedans, pulling up to the opulent South Fork ranch, with vanity plates that said things like “EWING 5,” and parties with large amounts of barbequed meat in an immense back yard, which featured a swimming pool. Before you could say “class envy,” the Soviets  began to entertain the notion that any sense of a moral victory that they derived from being a member of the proletariat paled in comparison to a shot at becoming bourgeoisie. Soon afterwards, the Berlin Wall fell, Lithuania, Estonia, and Latvia furthered independence movements, and the whole Evil Empire imploded.

Okay, so what was Dallas? It’s the story of “Jock” Ewing, played by the late Jim Davis, patriarch of the Ewing clan. Jock had four sons: J.R., Bobby, Gary, and Ray. However, Gary discovered at an early age that he would be better off leaving the oil business and starting his own nighttime drama, set in California (“Knott’s Landing”), and Ray was Jock’s illegitimate child and a ranch hand by profession, leaving most of the management (read: wrangling) over Ewing Oil’s affairs to J.R. and Bobby.

J.R., played brilliantly by the recently deceased Larry Hagman, was ambitious, aggressive, savvy, and devious in the extreme. He was often contrasted with the younger Bobby (played by Patrick Duffy), who was the more virtuous brother (though, in comparison, Atilla the Hun could lay claim to being more virtuous than J.R.). J.R. acquired, connived, maneuvered, and slept his way to the top, keeping Ewing Oil a step ahead of the other independent drillers in the market. And therein lies the genius of the writers of Dallas as they allowed us a view into J.R.’s machinations: J.R. was almost completely consumed with knowing and anticipating the actions and decisions of the other major players in the independent oil drilling market.  You rarely saw J.R. talking with his accountant, or engaged with the actual drilling (project) teams. Instead, he would collect intelligence from his competitors’ communications, both formal and informal, their employees, their creditors and clients, shareholders and relatives of shareholders – no source was off limits. With this information he was (almost) always a step ahead of his competitors, especially the despised Cliff Barnes. J.R. spun this information into gold (black gold, Texas tea) by preemptively making deals that the competitors sought, or denying them their planned acquisitions, or eliminating lenders, customers, allies…the list goes on and on.

Now, our friends, the accountants, might try to assert that J.R. was performing the first duty of all managers, to maximize shareholder wealth. But their claim to understanding J.R.’s tactics crumbles when you take into account (get it?) the fact that none of J.R.’s information came from anybody’s general ledger. That asset management is predicated on the information streams originating from GAAP systems is inescapable, and that those bits of data are extremely limited in their strategic management utility is beyond debate.

No, strategic management is, by its very nature, exclusively concerned with where the organization is with respect to its competitors in a given market. And this is where IT professionals can have the biggest impact: you know all of those “portfolio” or “enterprise” management systems, which are little more than conflations of project and asset management systems? They can no more manage an entire enterprise or portfolio than Cliff Barnes can overcome J.R.  The way to structure a management information system to correctly perform the portfolio management function is to first …

…purchase my recently-released, must-have book, Game Theory in Management. Or, stay tuned to this blog, though the latter alternative may take a bit more time.