Strategy is like cultivating a garden – it requires careful planning, nurturing, and regular pruning to yield a bountiful harvest. As a seasoned business strategist with 35 years of experience, I’ve witnessed the evolution of the field and the challenges of balancing the drive for newness and complexity with the fundamentals. In this blog post, I’ll share my insights on the history of strategy, the impact it has had on the real world, and how business leaders can approach strategy to improve their performance and cultivate a thriving business ecosystem.
From my early days learning about Michael Porter’s Five Forces framework, i liked the academic rigor of the thinking but this tended to draw me away from the usefulness of these strategies as tools to use. Another influential figure in modern strategy after Porter and competitive advantage was Gary Hamel, who argued that businesses need to continually innovate and disrupt themselves in order to stay ahead. He also emphasized the importance of empowering employees and fostering a culture of innovation.
More recently, Rita McGrath has introduced the concept of “transient advantage,” arguing that businesses need to be agile and able to quickly adapt to changing circumstances the exact opposite of Porter. She stresses the importance of innovation and experimentation in achieving sustainable competitive advantage.
Other notable strategists in recent history include Clayton Christensen, who introduced the concept of disruptive innovation, and W. Chan Kim and Renée Mauborgne, who introduced the concept of “blue ocean strategy” – finding uncontested markets where businesses can create new demand and differentiate themselves from competitors to the present day where buzzwords like “disruption” and “digital transformation” dominate strategic conversations. Even to the situation where authors Janmejaya Sinha, Knut Haanaes, and Martin Reeves believe that “Your Strategy Needs a Strategy”. The field of strategy has undergone a significant transformation. and not necessarily easier to do or to use.
One of the biggest changes I’ve noticed is the increasing focus on newness and complexity from academic strategists driven by the need to publish or perish. While academic research can certainly provide valuable insights, I’ve seen a worrying trend towards esoteric models and frameworks that are difficult to apply in practice. This focus on newness and complexity has led to the crowding out of more effective, simpler classical strategy models that have stood the test of time, and more important than that have actually been understood and delivered on their promises. Strategy should deliver outcomes, and while conversations over bottles of red wine late at night about strategy are on occasion a dalliance – it butters no parsnips.
Despite this trend in academia, I’ve found that the most effective strategies in the real world are often those that are simple and straightforward. Overcomplicating things can lead to confusion and lack of focus, or over-focus on perfecting the process while ignoring the outcome, which can be fatal in a fast-moving business environment.
In my experience, the most effective strategies are those that are based on a deep understanding of the company’s unique advantages and constraints, as well as a clear understanding of client needs and other alternatives to solve their problems. This requires a rigorous and ongoing analysis of both internal and external factors, and a willingness to adapt and pivot as necessary.
At its core strategy is simply a tool for creating value and achieving an advantage in doing so, and that its success ultimately depends on the organisation’s ability to execute and adapt to changing circumstances.
It’s important for business leaders to approach strategy with a clear understanding of their goals and priorities. This means focusing on the core capabilities that differentiate their company from alternatives, and developing a clear and compelling value proposition that resonates with customers. More than this leaders need to look beyond competition to existence within an evolving ecosystem where todays competition are tomorrows collaborators.
At the same time, business leaders need to be open to new ideas and innovations, and willing to embrace change when it is necessary. This requires a mindset that is both strategic and flexible, able to balance the need for stability with the need for innovation and growth. This is highlighted by the necessity of leaders to be both hyperaware of their business environment and curious about the spaces surrounding them.
Looking forward, I’d like to stop the military and game playing metaphors that abound within strategy. In business you don’t defeat your enemy, you co-exist and even co-operate with alternate options for your clients. You don’t try to win or play; this is something more serious. Strategy is like tending a garden.
In the future, I foresee the most successful business leaders will view strategy as a holistic approach to cultivating a thriving ecosystem, much like a farmer or gardener tending to a diverse array of crops. Just as a farmer understands the interdependent relationships between soil, weather, and various crops, successful business leaders will need to understand the complex interplay between internal and external factors that shape their business environment. They will need to carefully select and nurture their company’s unique strengths, while also being open to new ideas and innovations that can help them adapt and thrive in an ever-changing landscape. And just as a good farmer knows when to prune and when to let a crop flourish, successful business leaders will need to be strategic in their decision-making, constantly evaluating and adjusting their approach to maximize growth and profitability. With this approach, they will be able to cultivate a flourishing business ecosystem that yields a bountiful harvest for years to come.
Ultimately, the key to success in business strategy is to remain focused on the fundamentals, while remaining open to new ideas and innovations. By developing a deep understanding of the company’s advantages and constraints, and by remaining flexible and adaptable in the face of change, business leaders can position their companies for long-term success in an increasingly complex and competitive marketplace.