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It is not a formula that can be applied all over; what can be codified is not strategic. Generality and strategy do not go together, and this is reflected in the very work processes of both business and military strategists: they rely primarily not on general ideas, but on case studies, and treating each new case as a mystery to be cracked with a case-specific insight, in a way that delivers competitive advantage.
To the extent that you are successfully applying formulas in uncreative ways, you are not solving strategy problems at all. If you and your competitor are both BCG clients, and both are applying an idea like the experience curve, the result is not a temporary strategic advantage for one player, but an race to the bottom, with customers and suppliers enjoying the benefits.
But among the major strategy firms, only Bain appears to have invested in this notion. Of course, this strength was also a weakness. Those then, are the highlights of the story created by the main players. All three of the top firms focused on international expansion and industry-specific practice development rather than further management innovation.
Porter mysteriously vanished from strategy conversations. Kiechel is being perhaps too respectful. I personally have had a fat volume of his collected works sitting on my shelf for a couple of years, but have never been inspired enough to finish it. Unlike the equally prolific Drucker, Porter is rather turgid and not very readable. Kiechel correctly notes that the main tension in the literature on strategy is the one between positioning driven by numbers and models , and people driven by organizational theory ideas.
This makes the main story of strategy a story about positioning and formulas. This creates an ever-faster arms-race by eroding competitive advantage faster than new ideas can create it. Entire industry sectors start to tick faster and faster, benefiting customers and suppliers, but not corporations, when strategy ideas take hold across the board.
This problem was implicitly solved by Bain through secrecy, exclusivity and non-publication. Among the mainstream players, it was again Bain consultants who implicitly acknowledged, through their preference for long engagements and participation in execution, the fact that people and strategy are not separable, and neither are strategies and execution.
The alternate approach to strategy focuses directly on dynamics, and by dynamics, we mean the patterns of change created by that most unpredictable variable in the equation, people. And it is not for lack of trying. The school began its work by drawing inspiration from the work of Herbert Simon , who introduced the idea of bounded rationality and the idea that people satisfice rather than optimize.
From there, the march to behavioral economics-inspired approaches to strategy over several decades, was inevitable. One name though, should be familiar: Tom Peters was the lone rebel in the mainstream strategy world, trying to draw attention to people aspects. But he must be given credit for an entirely different achievement: creating the best-selling business book sector.
In other words, the actions and successes of humans within an agile, quick-learning startup were being attributed, by mainstream strategists, to deliberate modeling and data, and the use of elaborate constructs.
Table of Contents: The lords of strategy :
A case of post-hoc rationalization. Every idea developed by the school either creates a flavor-of-the-month bubble, or gets validated and incorporated into the very structure of the broader business environment, as an across-the-board cost of doing business. The result has been a gradual acceleration of change and a shortening of the advantage offered by any given idea. Ideas go from being secret strategies to codified commodities so quickly that they barely pay for themselves.
The Lords of Strategy : The Secret Intellectual History of the New Corporate World
Hence the Good to Great idea that you must get the right people on the bus, the wrong people off the bus, and then decide where to drive. It is a fundamentally adaptive, experimental, local and entrepreneurial approach to business problems. It is also a model that does not naturally lead to industry-wide acceleration, since it is people, not ideas, that matter, and people and teams cannot yet be cloned.
The Pascale Honda story is clever, but does not belie things like the Growth Share Matrix and its descendants. There is plenty more in the book, all of it illuminated by fascinating and fresh anecdotes, and statistics on the growth of the sector. There is an extended discussion of one end-game: the emergence of a consulting stint as a fast-track path to senior management in client companies which created a whole generation of consultant-turned-VPs, who became more demanding customers, raising the stakes for the whole sector.
Another interesting thread deals with the relative failure of the industry in dealing with innovation problems as opposed to cost control problems which has led to the perhaps unfair association between strategy consultants and layoffs.
There are also plenty of juicy nuggets of insider information for fresh MBAs to chew on. For instance, a McKinsey veteran is quoted as saying that the on a scale of , the relative power of various players is as follows:. But though a synthesis may occur there, other forces may yet create trouble for strategy as a discipline. Trends unfolding today might well be undermining the foundations of strategy.
How many out there snap to at the names of W. Chan Kim and Renee Mauborgne? Since Blue Ocean Strategy is the only book I have completely panned on this blog, it is nice to have my views validated. That said, and whether or not the discipline and function survive, the accomplishments in the decades of its reign are truly impressive.
This is definitely a sum-greater-than-parts book. There are many potentially relevant topics the book leaves out, and most are defensible exclusions for example, the ecosystem role of the industry analyst players like Gartner and Forrester is not considered, nor is the pre-history of strategy, which I already mentioned. But one omission is worth discussing: explicit definitions.
Kiechel, adopting a journalistic stance, avoids offering up his own definition. Instead, he characterizes strategy in a functional way as. This is clearly not a definition, and not intended as one. You could be reading tea-leaves and calling it strategy. Yet, strategy is clearly more than that. The positive definitions offered are only offered as illustrations of the thinking of specific schools or people.
For instance, the pre-Porter state of management thinking in academia is characterized through a Ken Andrews quote a Harvard faculty member who taught courses eventually taken over by Porter :. As Kiechel notes, that grand, overarching definition says everything and nothing. But it creates the intellectual room for viewing strategy as highly unique and individual to companies and situations, a process of creative story-telling. I have endured two significant professional rejections in my career so far. I failed spectacularly to land a tenure-track position in academia, and I crashed out of the second round of a McKinsey interview.
Curiously, while it took me months of nursing unworthy sour-grapes feelings to get over the first rejection, my reaction to being rejected by McKinsey was one of immediate relief. I never understood why until today. Now I know: despite my deep interest in the subject, my personality and strengths would have made me a train-wreck at a place like McKinsey, so I am glad I failed fast, and that they were wise enough to kick me out of the process early.
But wait a moment. This blog is that niche.
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Venkat is the founder and editor-in-chief of ribbonfarm. Follow him on Twitter. The subject is slightly broader to the Lords of Strategy, perhaps less analytical but still rather thoughtful. Personal anecdotes included give you a peek at how management consulting industry feels like from the inside and the book covers some of the pre-history you mentioned missing in Kiechel. Having said that, although it points to some serious questions, it is more of a beach book than a serious tome. As a textbook it is not such an easy ready, but the content is compensates for the difficulty.
The few chapters I have gone through diagnose quite clearly some of the root causes of the many issues with the traditional strategy texts, some of which you point to in the post above. Non-MBA here. Pankaj ghemawat has written some papers summarizing the history ofnthese ideas, so one way would be to download the free papers and dig up the references.
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Great read and analyis on different schools of thoughts. A previous company used Bain Consulting for their business strategy and failed miserably. I recently read a book on Balanced Scorecards and their application to executing and measuring strategies not the planning side though which is what I think you are focusing on.
What are your thoughts on best schools of thoughts about executing strategy assuming the plans are sounds? Interesting analysis. Absent any science, the field is Increasingly the territory of dogma and quasi-religion. Does Strategy Matter?