The biggest factor

Next time you are looking at an organization that is not performing well, ask yourself, what's the cause?

Of course, the cause could be one of many: Lack of funds and investment, insufficient or unsuited staff, ineffective technology, misguided marketing, "me-to" branding, high cost structure, misunderstanding of customer needs, and so on.

At the University of Chicago Booth School of Business Management Conference last Friday, Professor James Schrager described a handy three-option construct he uses to parse the success or failure of organizations:

• Is it management?

• Is it strategy

• Is it luck?

Dr. Schrager's simple categorization is very useful in seeing what is at work. Several examples he offered:

• McDonald's addition of breakfast to its menu was strategic genius.

• Mobil was lucky in making a big bet on expanding oil exploration before the energy crisis.

• Sourcing inadequate Firestone tires for the Ford Explorer was a Ford management failure.

Thinking about Professor Schrager's three factors, one is struck that there is a perspective that sits above them: Leadership.

Management is easily seen as the tactical, operational expression of leadership.

Strategy is clearly the realm and responsibility of organizational leadership.

We can even observe that some seem luckier than others, perhaps because of a leadership mindset that is more open to and attuned to perceiving opportunities and threats.

The biggest factor in the success or failure of organizations is leadership.

Discuss and debate!