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.
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?
Great piece on sustainability and business
Great video with Adam Werbach, author of Strategy for Sustainability: A Business Manifesto, shares an adaptation from his book and talks with the McKinsey Quarterly about trading in green fashion for more enduring business solutions. Practial and commercial.
Don’t surrender to uncertainty!
I hope senior management do not get persuaded to divert their attention to studying ‘complexity’ in the hope of understanding recent economic turmoil. ”‘Power curves’: What natural and economic disasters have in common” argues that “parallels between financial crises and natural disasters–such as earthquakes or forest fires–suggest that the economy, just like complex natural systems, is inherently unstable and prone to occasional huge failures that are very hard or impossible to foresee. Proponents of this school of thinking are bringing new ideas grounded in complexity theory to economic forecasting, strategic planning, and risk management.” This contributes little to the quest for skilled strategic management. Read more
Continuous strategic management
Just came across a great piece, but curiously embedded in a McKinsey Quarterly article that seems to be about something else entirely – an update of how to decide what businesses should be in a corporate portfolio. The little gem is on the evolution of strategic management - which describes how strategy has evolved from a basically financial approach, through forecasting and then externally driven strategizing, to its ultimate, described as follows:
“When this investment [in strategic planning] is successful, the result is strategic management: the melding of strategic planning and everyday management into a single, seamless process. In this phase, it is not that planning techniques have become more sophisticated than they were in phase three but that they have become inseparable from the process of management itself. No longer is planning a yearly, or even quarterly, activity. Instead, it is woven into the fabric of operational decision making.” It goes on to point out that virtually no companies have reached this point, except perhaps some in the electronics sector, where very fast changes across multiple products and highly segmented markets make it imperative.
… but surely this should be our aspiration for all organizations? though as I have noted before, we are not likely to get to this point with strategy tools that are simply incapable of ever delivering this result.
More items on strategy in the crisis
Amongst the continuing stream of articles on this, some good ones [I've left out some bad or downright dangerous ones] include: Read more
Understanding competitor moves
McKinsey Qtly survey finds that firms can easily anticipate what competitors will do next. Another article explains how to get inside competitors’ heads. .. but I’m still puzzled so little is written in this or any other strategy sources about what to actually do against competitors. It was a key part of my strategy role in practice, makes a huge difference to what can be achieved – and it’s fun!
Decline and recovery by sector
Experienced execs may have a good feel for how their particular industry may evolve during the downturn and recovery – e.g. consumer sectors tend to fall first, but recover earlier also. McKinsey have mapped the decline and recovery of different sectors in previous recessions, which might give useful pointers for what to look out for in your industry so your strategy can respond at the right time.
Open up to investors
McKinsey quarterly urges executives to embrace transparency if they want to help investors make investment decisions – presumably to invest in their firms. There’s a problem though … Read more
Anyone using game theory?
Though I have heard of game theory being used in a few particular and special cases (e.g. the auctioning of 3G cellphone licenses) I have not seen anything of it being used in general strategic management or business planning. The strategy textbooks dismiss it as too uni-dimensional and limited to special cases to be useful, and I can find virtually no articles in e.g. Harvard Business Review or McKinsey Quarterly giving any encouraging cases where it has been helpful. (Though I did see on 12manage reference to a strategy+business article on Barry Nalebuff).
Does anyone know otherwise?