Which CEOs to admire?
It seems the real hero-CEOs are not the well-known names, and perhaps not with well-known companies either. In Do We Celebrate the Wrong CEOs? Morten Hansen and Herminia Ibarra identify CEOs who have delivered sustained, long-term growth in investor returns over long periods, and it’s likely you never heard of most. More worrying – maybe the companies they run are not well documented either, nor what has been so great about the strategic management that delivered these great results.
Are you the best owner of your assets?
With M&A activity recovering, a timely reminder from McKinsey to check out this question. Simple principles, but easily forgotten.
Business model innovation: BMI
A clear and practical paper from BCG explains nicely what a business model is, what ‘innovating’ it means, and when and how to do it. The only caveat is the superior total shareholder returns it claims comes from BMI innovators vs. traditional innovators – it likely excludes BMI innovators who failed. So by all means check it out, assess whether BMI is appropriate for you, but if not, get back to driving performance in your existing business model.
Beware divesting core business
A rare example of clear and useful academic research from Emilie Feldman at Harvard [but treat it with care - see below]. Emilie “investigates “legacy” divestitures, the sale or spinoff of a company’s historical core business. Firms appear to divest their legacy businesses within the context of larger efforts to reshape their identities. I find that operating performance deteriorates Read more
Scenarios for all
McKinsey’s Charles Roxburgh offers nicely practical advice on the use and abuse of scenarios. In the process he points out that the latest crisis many firms find themselves in, like previous ones, was foreseeable and even preventable if management had done this work professionally. And remember scenarios are not just useful for the big firms – any competent management team should be asking itself what range of things could happen, both to exploit incipient opportunities and anticipate new challenges.
New sources of competitive advantage?
BCG suggests strategy too often assumes we can get sustained advantage in stable markets vs. few, known competitors by choosing good positions and building key capabilities. (Seems to have worked fine for Toyota, IKEA, Amazon etc.) Like others they suggest turbulent times make other sources of advantage important. Read more
Seismic shifts in demand
Though over-hyping of strategy issues is unhelpful, some radical changes do need dealing with. In Taking Advantage of Tumultuous Times: Claiming the Future, Eamonn Kelly, a Monitor partner, highlights a few big shifts. Most of the discussion is general and it’s not clear exactly what management should do, but one issue - the vast numbers of emerging consumers - can be evaluated and built into strategic plans. There is a simple reason this trend can trigger ’siesmic shifts’ in demand - Read more
Dubai strategy disaster
Strategy is not solely of concern to firms of course, but to public services, voluntary organisations and others [though you would hardly know it to read the strategy textbooks and journals, which largely ignore these vast sections of the modern economy]. The collapse of Dubai is a spectacular case of strategic incompetence, but also throws up an issue of wider importance.
Operations Strategy is key
Good to see strategy+business magazine on why operations strategy is vital to strategic performance. In Winter-09 edn An Essential Step for Corporate Strategy, Tim Laster points out that many operational decisions have huge implications for firms’ ability to build and sustain critical resources and capabilities, in spite of efforts by Michael Porter and others to dismiss their impotance. We do, though, need to go further, and develop a holistic, continuous view of strategy across all functions of course.
Usable game theory
Hagen Lindstaedt just alerted me to what looks a smart way of making game theory usable, with a neat link to scenario-based thinking. Probably quite challenging to do, but looks powerful – thanks Hagen. Looking forward to seeing more on how it works.