The Execution Premium
More solid stuff from Kaplan and Norton, which moves on somewhat from their balanced scorecard + strategy maps ideas. The Execution Premium points out “Strategy that does not link to operations is not strategic. It’s just pointless planning.” and goes on to outline how to plan operations to deliver the strategy – a notable omission from most business school strategy classes.
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.
Good sense from McDonald’s
A great review of What McDonald’s Can Teach Us About Recovery from an insider involved from the turn-round after 2002. Read more
Strategy + falsehood = error
An otherwise great column in HBR It’s Time for the 3-D MBA about improving MBA programs starts well by urging more breadth and depth, then calling for more ‘dynamics’ than static prespectives. [I'd hardly disagree with that!]. But it then asserts that “The vast majority of value created in business comes not from applying existing models, but from creating new models that do not now exist. It comes from creativity; from innovation.” – which is either completely false, or else meaningless, depending on how you take it.
In any year, the vast majority of value is created by companies exploiting business models they have had for years or decades, rather than ones they just invented. On a longer view, though, all value ever created comes from business models that were new at some point in time. The article seems to be taking the first meaning – implying that most value is created by recently-new business models – and urges business schools to focus MBAs on innovation. This may be useful in some cases, but should not take precedence over strategy delivery. If this comment leads to MBAs learning less about how to deliver strategy as a result of focusing on innovation, it will be a great example of how an entirely false premise can lead to fundamentally wrong strategic choices [and this from a business school that is supposed to be teaching the rest of us how to do strategy well!]
So … when reading an article that seems persuasive, do put on your ’skeptical’ hat and just check that it’s built on accurate foundations.
What is strategy? … and the strategy life-cycle
Just working on the first chapter of the textbook 2nd edition, and thought it needed a bit more on this question – found the only way to explain to newbies was to go through an organization’s life and track what ’strategic management’ actually does over that time-horizon. Main messages are:
- The choice of strategic ‘position’ [what to provide, to whom and how, relative to rivals] is a very rare activity.
- Substantial strategic initiatives [acquisition, new market entry etc] occur occasionally.
- By far the majority of the task is steering [a.ka. implementing] the strategy from period to period.
So – how come the attention in all the textbooks and journals is in precisely the opposite priority? Read more