Strategic Leadership: Governance & Renewal is advanced reading for students of strategy. The book is particularly strong in the explanation of the resource based view of strategy, innovation and the problems of aligning strategy between the differing business units and the corporation at large.
Management, leadership, strategy, strategic management, corporate governance, project management, corporate strategy, strategic business unit, sustainable competitive advantage, product innovation, market diversification, corporate culture.
It gives a very useful analysis of the working between business level and corporate level strategy. The book takes examples from many different industries and has many useful quotes from well-known CEOs.
The book also looks closely at how corporations such as 3M, Honda and Canon adopt a resource based view of strategy. They have identified a set a key competencies and will go into any market when they can gain a competitive advantage. Honda’s skill is in making devices that use an engine and a chain mechanism. It will therefore make any product that can help them exploit this advantage.
Similarly, 3M makes some 60 000 products all based around the use of adhesives, substrates & advanced materials.
Procter & Gamble’s strategy for encouraging innovation is explained in detail. The corporation was confronted with the difficulty of centralizing certain operations while still needing innovations that are generated by smaller organizations. It achived this through a process of “open innovation” and “by early 2006, the company had already reached a level of 35 % of innovations fully or partly based on externally sourced ideas, up from 15 % at the beginning of new strategy. R&D productivity had increased by 60%.”
Interesting quotes from the book:
The central challenge for corporate management is how to create more value overall than the businesses could generate as stand-alone entities with direct access to the capital markets in their own right.
Much initial enthusiasm for the concepts of corporate strategy matrices and SBUs, they were rarely straightforward to operate in practice.
In Theodore Levitt article Marketing Myopia…railroads. The reason they defined their industry wrong was because they were railroad-oriented instead of transportation-oriented; they were product-oriented instead of customer oriented..
Jack Welch: “There is no single plan for a company with as many businesses and markets as GE”.
Honda’s ability to transfer its know-how on dealer relations from motorcycles to lawnmowers will only be significant in corporate strategy terms if dealer-relations are also a strategic asset or key success factor in the lawnmower market.
Each management team at any given point in time has an in-built limit to the extent of diversity that it can manage” and relatedness “may be as much a cognitive concept as it is an economic or technical one”.
Distinctive organisational capabilities provide a more durable basis on which to build sustainable competitive advantage than relying too heavily on defensible market positions alone.
As Fukuyama (1996:7) has argued, a nation’s welfare ability to compete are “conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society”.
So also was the maxim, enshrined by Robert Woodruff and Paul Austin into the culture at Coca Cola: “The world belongs to the discontented”.
Kao, Canon and 3M, well known for their capacities for learning, innovation and self-renewal, tend to view themselves in living systems terms.
Bower and Christensen (1995:53) to argue that “for the corporation to live it must be willing to see business to die”.
“Take our 20 best people away, and I will tell you that Microsoft will become an unimportant company”. Bill Gates
Google has emerged to rival 3M as the most cited exemample of how to nurture and preserve a culture of innovation with scale.
Thomas Watson Sr. of IBM once put it: “The fastest way to succeed is to double your failure rate.”
As Andy Grove (1996:160) once put it, when a leader is “able to alternatively let chaos reign then rein in chaos”
Most successful innovations tend to emerge “not at the centre of a company’s field of focus but its periphery”.
Intel and McDonald’s invest countless millions in their own new venture efforts with mixed results at best.
Companies tend to do better when their efforts to diversify are into areas closely related to their core businesses.
Mats Lederhausen, the senior executive responsible for new growth initiatives at McDonald’s in the late 1990s, is revealing: “All we know is that we have to try to keep growing. We know that the misery of uncertainty is far better than the certainty of misery. If we don’t try to grow we will fail, and at least if we try we have a chance of sustained growth.”
History shows that in the vast majority of cases, the initial strategy and business model developed for new ventures are rarely the same as those that ultimately bring success.
New ventures are typically undertaken “with a high ratio of assumption to knowledge”…by systematically converting assumptions into knowledge. Traditional planning and control systems are not the most suited to this task because they are “designed to implement a proven strategy”.
Strategic leadership Brian Leavy Business School Grenoble EM International Affairs Higher Education ESC Grenoble Strategy Blog Global Ed Graduate Business School ark Thomas
Education and Empowerment: “I reflect on the foundations of what it means to be a great leader quite often. How do I inspire? How do I appreciate and congratulate? How do I hold people accountable in ways in which their personal worth is still recognized? This question of leadership is one of the questions with which I am consistently grabbling.”
“Richard Rumelt’s Web Journal on Good and Bad Strategy in Business, Politics, and Economics”
“Blog of Professor Dr. Peter Lorange , one of the world’s foremost business school academics.”
Theinnerwildkat: “Remember the Titans – the movie shows the beginnings of acceptance and teamwork that were beginning to take root during a very tough time in our history. As I thought about the this movie, I saw a lot of pertinent things to today in both acceptance and leadership.”
Higher Education Management: “Unlike disruptive innovations, the OESP model does not seek to displace the traditional model of higher education. It’s not a direct challenge, but an extension of the existing model through the addition of services, skills and capital that are otherwise unavailable to the client university.”
Higher Education Management: “I think universities can move in new directions; they can identify new opportunities and shift resources accordingly. But they don’t have much practice. For last several decades, universities have had the luxury of not needing to make especially tough decisions.”
Booz & Company: “Oded Shenkar, author of Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge, introduces an excerpt on the wisdom of entering markets after first movers from The Art of Being Unreasonable: Lessons in Unconventional Thinking, by Eli Broad.”
|Defines what constitutes a luxury product and how companies develop their strategies to profit from this status.||Wonderful essay that lays out the benefits of international trade.||Classic book that gives the ins and outs of creating new markets.|