from a
distanced, objective view of the whole or from a craftsmanly
engagement with the purposes of
our company and its markets.This
difference will remain until we
identify the final good of
human beings and of commerce or
give up the distinction between
science and the humanities. As a
philosophical matter, I side with
Mintzberg and the engaged,
craftsmanly
approach.
While philosophy offers important
insights, I will not dwell on them
here. Managers can arrive at many
of the same insights by paying
attention to the strategic activities of
companies that do well in emerging
economies. Consider such
companies as CEMEX and Haier in
emerging markets, as Deutsche Bank
in financial services, and as Voith
Siemens Hydro (facing product
competition from GE and price
competition from new competitors
in India and China). Strategists at
these companies focus on handling
the unexpected better than their
competitors. With technological
change, globalization, longer lives,
new business models, and new
social values arising, the important
moments of the future are very likely
ones we do 'not' expect.
Strategy in these companies
involves reconnaissance of all kinds
to get the best understanding of the
shape of the unexpected, building
an infrastructure that is agile in all
respects (finances, technologies,
human resources, production
capabilities, geography),
experimentation, and when an
experiment succeeds beyond
expectation, scaling up fast to
exploit the opportunity. In short,
these companies have taken
Mintzberg's craftsmanly sensitivity
to opportunities and turned it into a
Porter-like scientific strategy.
Strategists at these companies draw
on traditional analytics to note statistical changes in customers,
suppliers, competitors, and so forth.
But they also conduct distinctive
forms of qualitative research where
they look for unusual things that are
happening with their customer- and
supplier-facing teams and with
customers and suppliers
themselves. For instance, a typical
strategic question in such a
company is, "What is the most
unusual thing that you found
yourself doing this year?" The goal
is to find anomalies that are
harbingers of the future.
Building agile platforms is another
cross between analytical and
emergent strategy. Companies now
bring the same intensity to building
agility that they brought to create
scale or scope technologies. But
agility in technology, staffing and
manufacturing (though
outsourcing), finance (through
hedging), management structures
(through promise-based
management), and so forth enables
companies to go after emerging
opportunities and compete by
changing competitive advantages.
Experimentation looks for objective
truth about the business reality as
much as the boil-the-ocean approach
of more traditional strategy, but the
new strategists try out ideas and
collect results much like the
sensitive craftsman.
Don Sull, my co-author of "Promisebased
Management," has been
relentless in documenting the
opportunistic strategy in dynamic
markets. I recommend his Made in
China, "Strategy as Active Waiting,"
HBR (September 2005), and The
Logic of Opportunity (forthcoming
2009).
Strategy execution has always
been one of the more difficult problems
in business. Creating a brilliant
strategy is nothing compared
to executing it successfully. It has
always been much easier to create a strategy document than to get employees
to abide by it. Many employees
don't even know the details
of strategies. Plans by senior management
are neither attended to nor
executed. Performance expectations
aren't met. How do you think the
companies should get everyone rallying
around the grand vision/strategy?
I do not want to diminish the
difficulty of creating a brilliant
strategy. It calls for resources of
character, passion, sensitivity to the
resources of the company and to
anomalies in the company and
industry, broad and deep industry
experience, analytical intelligence,
and leadership. It is rare to bring all
these traits together. Lorenzo
Zambrano of CEMEX and Anita
Roddick of the Body Shop are two
leaders whose brilliant strategies
demonstrate all the characteristics I
have just described in addition to
the ability to transform themselves
in the process of developing the
strategy. At the very least, genuine
strategy making even the
opportunistic strategy making I have
just described requires numerous
cases of passionately believing
something about the nature of the
industry or your company or your
customers and then pushing
yourself to discover that you are
profoundly wrong. That is the
experience that undergirds a
brilliant strategy. Strategies are not
brilliant because they are
conceptually hard to develop. They
are brilliant because they overturn
the common sense of both the
industry and of the formulators
themselves.
That said, strategy execution fails
approximately two-thirds of the time
and fails because it focuses on the
implementation of new practices,
new processes, new value
propositions, new reporting and
measuring, new profiles to recruit,
and finally new incentives. In short,
it is commonly thought that a new
strategy requires a change in the
recipe or template a company
follows. Most who implement
strategies actually know that
companies are not just big rule
following processes. They know
that they are social organisms, but
they leave it to the communications
program to manage the social part of
change.
