“Projects” are certainly vital – a big part of Cisco’s past success came from its power as a ‘serial-acquirer’ of new technologies, each of which was a project. And a white-goods manufacturer recently specified a project process for entering each in a sequence of national markets.  But strategic management is not all about projects – the critical foundation is a robust set of policies for the repeated decisions that keep the plan on track, about pricing, product development, marketing, staffing and so on. Only if this is sound can we embark on the bigger steps that need project discipline.

[1] Executing your Strategy by Mark Morgan, Raymond Levitt and William Malek, Harvard Business School Press.

Dubai followed recommendations by Michael Porter to design its strategy, building on ideas from his Competitive Advantage of Nations, See Innovation, Clusters and Knowledge-Sharing: A Brief Look at Dubai for a still-hopeful note on the brilliance of developing ‘clusters’ of sector-specific business districts. Clusters are supposed to attract critical resources – especially knowledge-workers – to form hot-beds for creating leading-edge businesses. Unfortunately, apart from its grandiose construction projects, Dubai’s strategic management of this concept seems to have overlooked how actually to build all the other resources needed.

Whilst this episode has been a disaster for many people caught up in it, the rest of us have a right to be very angry about it too. In common with other dumb ‘strategies’, it sucked in, burned up, and wasted scarce resources that would have been better used elsewhere – not to mention the vast environmental damage it has caused and will continue to cause. 

The error we would all do well to note is thinking that choice of ‘position’ is all that strategy requires. Military analogies are popular in strategy, but this is like arguing that ‘strategy’ simply means deciding where to put your cavalry and archers before the fight, then completely ignoring both how to get them, and what to do with them once the battle actually gets going.

1. It’s quality of growth that matters, not quantity.
2. Fix and drive the business model, don’t reinvent it.
3. “It’s the system, stupid!” - i.e. the system that delivers performance, not manipulating ratios or firing magic bullets, and needs intensely detailed measurement and tracking – tedious, but essential.
4. Work the plan – in detail.

Not ‘transforming’, not sexy, but great common sense. Many organizations would do well to follow similar principles.

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.

• 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?

This took me on a tour around some interesting examples – Blockbuster vs Netflix in video rental, Alibaba.com [China's eBay-beater], IKEA, etc. And also onto Michael Porter’s ‘What is Strategy?‘ article [HBR, Nov/Dec 1996], which got me really annoyed, because it totally dismisses everything except the first task – though that shouldn’t have surprised me I guess.

See a draft of this new section here [forgive the baby steps approach, but it has to work for new-comers to strategy as well as you experts!].