What are we to use to replace industry analysis in strategy?
In my blog over at the Harvard business review web site, I noted that industry boundaries are blurring and that this can lead to serious strategy miscalculations. Several people wrote in to say that they thought the 'jobs to be done' perspective offered a better vantage point. Couldn't agree more!
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- Posted Rita McGrath on January 19, 2012
Lessons from the Growth Outliers - HBR Article available for download
This is an article about an exceptional group of companies - publicly traded, with market cap as of 2009 of over $1 Billion USD - who were able to grow their net incomes by at least 5% a year for a total ten-year period. In it, I find that they combine remarkable stability with remarkable change. The first 500 readers to click on the link below will be able to access a free .pdf file of the final published article.
Click here to receive the download.
If you missed it, email me and I'll have a hard copy sent to you.
Happy New Year!
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- Posted Rita McGrath on January 05, 2012
Growth ambitions, yes. Growth capability? Still working on that…
My colleagues over at the growth practice at consultancy Accenture surveyed some of their largest clients about their growth prospects. The results are in my blog, "ready for growth, but not prepared" over at the Harvard Business Review site. Among the more interesting findings are that the firms all believe growth is important and is back on the agenda, but struggle with finding the right capabilities to support it.
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- Posted Rita McGrath on August 24, 2011
Analysts or business designers in today’s strategy work?
A LinkedIn Question went like this:
Is business strategy as we teach it in Harvard Case Studies Obsolete? Do we need to develop business designers and not strategic planners?
Traditioal strategic planning takes a linear left brain abstract approach to business development and looking at business opportunities. Most famous tool in the toolbox being a SWOT analysis. Business Designing is a more right brain wholistic visual approach to identifying and creating business models, strategy and opportunities. Business designers love to create "business models" as a way of thinking about change. According to Ms. Kay Plantes: "Business model innovation starts with challenging hidden assumptions
Here is my answer:
There are several assumptions in the conventional, industry-focused and analytically intense view of strategy that no longer hold in an increasing number of categories. First, the notion of industry as the fundamental analytical focus - more and more we are dealing with questions of inter-industry competition. Second, the idea that the core goal of strategy is to create a sustainable advantage - today, more advantages are not sustainable than are. Third, a fundamental confusion between strategy and planning. They are two different things - strategy is about external views, determining how you are going to achieve objectives, and planning is about how to link up the necessary resources. Fourth, an increasing emphasis on category evolution and ecosystem partners.
I would not say that the "answer" is go switch to business designers, as absent an informed external perspective you are designing in a vacuum.
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- Posted Rita McGrath on April 08, 2011
Expanding role for Finance Chiefs - utterly predictable
The Wall Street Journal last week published an article on the expanding role of CFO's and financial people generally in corporations. Well, it's a trend I've been watching for a while, and it isn't going to go away. But it does reflect a significant underlying shift in the way strategy gets made in today's corporations. It used to be the strategy guys would figure things out and toss the playbook figuratively over the transom to the finance people who would work out the best way to line up funds for what companies wanted to do. No more. In today's hypercompetitive markets, your financing structure and your strategic decisionmaking have to be tightly aligned. For one thing, you don't have time to lose. For another, the value of your company, as reflected in its stock price, is going to derive in part from how well you navigate these issues. So what can we expect?
More and more, finance people are likely to be on track to become general managers. And a lot of other functions - from IT to operations - are going to have to start treating those bean-counters with a little more respect.
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- Posted Rita McGrath on February 07, 2011
