Limits to growth
I see that icon of ‘not even the sky is the limit’, Ryanair, is finding gravity still exists. In a curious ‘threat’ to curtail growth, lively CEO O’Leary says it’s not as easy to pick up dirt-cheap aircraft as he did in 2002. He’s not quite so open about the company’s experience of opening hundreds of routes between city-pairs. I’ve tried reconciling their statements of routes opened, operated and closed, and it’s not easy – lots of hype about huge numbers of new routes being started, but curious shyness about how many close.
It rather looks like the love-affair with flying everywhere for nothing – no matter the inconveniece involved - is fading, so both routes and service frequency might have to fall. The parallel with Starbucks over-expansion of stores is uncanny.
Balanced Scorecard is not Strategy
Harvard Business Publishing is again pushing its balanced scorecard stuff, but under the misleading strap-line Strategy has never been more important. Don’t get me wrong - BSC is a much better tool for on-going performance management or for strategic initiatives than the crude finance-only metrics that too often dominate, but it’s a very long way short of being a strategic management. A few shortcomings: Read more
Portfolio of strategy initiatives
A reminder from McKinsey makes a strong case that uncertainty calls for flexible pursuit of diverse initiatives - but strategic management of a portfolio of initiatives works is always needed. Read more
HR strategy: mixed news
Good that Mercer reports senior HR folk are taking a strategic view of talent in planning for 2010 – focus on high-potential staff, critical skills, employee engagement etc. Pity, though, that ‘concern with workforce costs’ still comes out as the top priority – I wonder which will win when the FD starts shining bright lights in their eyes about budget time? Especially disappointing given that HR is often the least robust of the issues in company plans, in spite of its dominant impact on long-term performance.
Better than HBR?
Harvard Business Review may be seen as the gold-standard for leading edge management thinking. But I am increasingly impressed by the quality of other journals. McKinsey Quarterly, of course, has long produced solid content based on work with major clients, or else on serious research from their Global Institute, and other big consulting firms do some of the same. Now, seems to me, Sloan Management Review is also putting out important, well-informed articles reflecting rigorous work, and strategy+business from Booz & Co does the same.
Meanwhile, HBR offers more and more articles featuring glib slogans or ‘X ways to do Y’ and other styles of thin journalism. Some are downright dangerous! There are still some great exceptions of course, but I wonder if their crown is slipping.
Anyone got other favourite sources?
More on sustainability and strategy
Two solid pieces on strategy implications from sustainability. The Business of Sustainability report from BCG reviews the impact the issue is having on companies and how it is affecting their strategic management. Most now see it as far more than just the latest fad and potentially a big factor in their future success – or failure. Sloan Mgmt Review summarises this report, 5 mini-cases on Nike, Rio Tinto, GE, Better Place and Wal-Mart, and articles on implications for competitive conditions and for talent-management.
New global power-brokers
A helpful report from McKinsey Global Institute to get a sense of who will be pulling strings of global investment in future. Although smaller overall than pensions/insurance/mutual funds, petrodollar and Far-East Sovereign funds are large enough to have a big impact. If your business is in a sector where these groups start active investment, better hope they act wisely. Read more
Great M&A opportunities
Can’t always tell if some insight has subtle power or is just stating the blindingly obvious? Me neither. BCG says Seize M&A opportunities while they last and presents the usual financial ratio research to prove that acquisitions in a downturn generate better returns than those made in the upturn.
Why is this surprising – when targets’ values in the upturn will inevitably reflect the underlying growth, to which an acquiror has to add for the deal to generate value? Still, even if obvious, the point is not wrong – or am I missing something?
More important is that an acquisition can safely offer a solid, deliverable route to enhance sustained long-term growth in free cash-flow – which rarely gets captured in these kinds of short- to medium-term assessments of M&A performance in any case. That’s a task for strategic management, not wheeler-dealing.
Jump-Starting the Clean-Tech Economy
HBR asks How to Jump-Start the Clean-Tech Economy and points out that initially-inferior technologies penetrate markets all the time. It also notes that inventing a new product alone may not be enough – a complete system may have to be initiated. There’s more we know though, that Govt and firms could and should be leveraging. Read more
… but some transformations are vital
There’s no question transformation is sometimes powerful or just unavoidable. You will find a more thorough, professional case showing how to think it through in Reinventing Print Media from strategy+business.