The business environment has never been more difficult than today. The increasing complexity and pace of change in markets, technologies, and consumer behavior poses challenges (and opportunities!) to companies across industries and forces them to fundamentally rethink their approach to strategy. What will be the key success factors for strategy work in the future? We would like to examine this question today by quoting some voices from academia, industry, and consulting practice via YouTube video.
Martin Reeves: “Adaptive Strategy“
According to Martin Reeves, Senior Partner & Managing Director of Boston Consulting Group New York, the future of strategy work is what he calls „adaptive strategy,“ that is the ability to quickly anticipate, adapt, and change environments. To enhance their adaptiveness, Reeves recommends businesses to focus on five key things: 1) Interpreting signals and patterns of change, 2) moving away from annual planning cycles to continuous planning, 3) organizational flexibility, 4) orchestration of internal and external ecosystems, and 5) making sure that business models are sustainable with regards to ecological and social sensitivities. This requires the strategic planning function and the organization as a whole to change. Reeves believes that a new corporate culture is needed which is characterized by participation, diversity, external orientation, and the willingness to experiment, take risks, tolerate failure, and learn from mistakes.
Rita McGrath: “The End of Competitive Advantage”
With her recently published book The End of Competitive Advantage – How to Keep Your Strategy Moving as Fast as Your Business, Rita McGrath, Professor at Columbia Business School New York, caused a stir in the strategy community. In this brief video, she summarizes the main thesis of the book that the traditional approach to strategy which is based on gaining a sustainable competitive advantage has become obsolete. In today's uncertain and volatile business environment, it is simply no longer possible for companies to maintain competitive advantages in the long-term. One important aspect that has contributed to this development is that competition takes place not only between rivals within the same industry, but between industries. To stay ahead in the game, McGrath believes that companies “need to constantly start new strategic initiatives, building and exploiting many transient competitive advantages at once. Though individually temporary, these advantages, as a portfolio, can keep companies in the lead over the long run.” To learn more, read McGrath's book or her recently published HBR article The Transient Advantage.
Cynthia Montgomery: “Rebranding Strategy - Why Traditional Strategy Planning Needs a Makeover”
Like Rita McGrath, Harvard Business School Professor Cynthia Montgomery is convinced that strategy needs to be “re-imagined.” However, she looks at the problem from a very different angel: the relationship between strategy and leadership. Over the past few decades, Montgomery argues, strategy has turned into little more than an “analytical exercise” performed by internal strategy departments or external consultants. As a result, it got disconnected from the people and lost lots of its vitality and color. She is convinced that strategy needs to become once again “the animating force, the energy that directs everything a company does.” The CEO plays a key role in this. As the “chief strategists,” it is his job to make the core strategic choices, and to communicate to the employees again and again what the company stands for and why it matters.
IE Insights: “Challenges in Strategy“
During the last Chief Strategy Officer Summit in San Francisco, IE Insights conducted a series of video interviews with strategy professionals asking them what they believed to be the most important issues facing strategists today. Tony Haile, CEO of Chartbeat, for example, identified two major challenges for strategists. Firstly, he believes that operational excellence is no longer sufficient for business success as the differences between companies in this respect have greatly diminished. What matters today is differentiation through innovation. This is very much in line with the increasingly widespread view that “strategy is innovation.” Secondly, Haile states that due to the enormous complexity of the business environment predicting the future based on historical trend data has become less and less useful. Finding ways how to cope with this complexity is one of the main challenges companies need to tackle.
Looks like the experts very much agree: Agility, innovative strength, strong customer orientation, continuous planning, a culture of risk taking and organizational learning, participation, diversity, and leadership will be some of the key success factors for strategy work in the future.