Anyone who has studied a theory of strategy known as the Resource Based View will instantly recognize the name Cynthia Montgomery. Her 1995 article with David Collis, “Competing on Resources” is one of the founding texts in this domain.
The Strategist is based on her teachings on the executive education program at Harvard Business School. It is an excellent read that challenges managers to think about their own vision of what they and their organisation contribute to society. From the introduction, she sets out her stance:
“You’re about to get a revisionist view of strategy. It’s not that what you’ve learned is incorrect. It’s that it’s incomplete.”
Management, leadership, strategy, strategic management, corporate strategy, strategic business unit, sustainable competitive advantage, product innovation, market diversification, corporate culture.
“My ultimate goal here is not to ‘teach strategy’”, says Ms. Montgomery, “but to equip and inspire you to be a strategist, a leader whose time at the helm could have a profound effect on the fortunes of your organization.”
Hence the book is far more about the process of being a strategist rather than just setting down a new set of models to be learned and applied. It challenges the reader to ask some fundamental questions about their own strategy in the company and how they go about implementing it. Strategy should not be seen as a one off solution but “a journey” in need of “continuous, not intermittent, leadership.” Montgomery encourages leaders and managers not just to define a strategy but to become “a strategist.”
“Does your company matter? That’s the most important question every business leader must answer. If you closed its doors today, would your customers suffer any real loss?”
Curiously, the first part of her book quotes heavily from Michael Porter. This is interesting because Porter’s positional view of strategy is often juxtaposed against the aforementioned resource based view. In Porter’s strategic world companies have a top down view. They decide how they want to position themselves and then choose the resources to do this. The RBV suggests a bottom up approach; i.e. companies look at what they are good at and the skills and resources they have and then position themselves. It is rarely as clear cut as this. It is not until page 75 that the reader gets any whiff of the aforementioned resource based theory. (All references to this are quite modesty confined to the Endnotes section of the book.) Towards the end of the book she becomes more critical in her analysis.
“Conventional wisdom would say that the goal of strategy is a long-term sustainable competitive advantage. I challenge that view.”
This is one of the fundamental pillars of Porter’s strategic theory.
Strategies at Apple, Gucci, IKEA and Masco
Aside from some very challenging questions, the book also gives an excellent outline of the strategies of a few companies. To begin with there is a very entertaining outline of a case study on Masco and its attempts to move the faucet (tap) industry to furniture. This is followed by two excellent chapters on IKEA. Chapter 3 gives a wonderful outline of the rise and fall and rise again of Gucci.
The final one is Apple. This too is a concise and interesting outline, the only problem being that the Apple Story has been told and retold so many times (and I too am guilty of this) that it seems to have lost its impact a little.
The book is an excellent read designed more for executives than academics (all references are banished to the end of the book) and gives the reader a real vision for developing an ongoing strategic process within the company. In the end, defining the strategy is the easy part; it is executing it that should be seen as the real challenge.
Interesting quotes from the book:
In the 1980s and ‘90s, my colleague Michael E. Porter broke important new ground in the field.… Strategy became more about formulation than implementation, and more about getting the analysis right at the outset than living with a strategy over time.
Having seen hundreds if not thousands of such strategies in their initial form, what is clear to me is this: Many leaders haven’t thought about their own strategies in a very deep way.
In all my classes, I pose one fundamental question: “Are you’re a strategist?” Sometimes it’s spoken, often it’s only implicit, but it’s always there.
No one respects timid, passive managers. Bold, visionary leaders who have the confidence to take their firms in exciting new directions are widely admired. Isn’t that a key part of strategy and leadership?
A manager should produce success in any situation. One writer calls this “the sense of omnipotence that plagues American management, the belief that no event or situation is too complex or too unpredictable to be brought under management control.”
I call this belief, when taken to its extreme, the myth of the super-manager. I see it behind Masco’s leap into furniture manufacturing. Confidence matters. But there’s much more to strategy and leadership than a steadfast belief that a daring vision backed by good management can overcome virtually all obstacles. Without the rest of it, ‘bold’ too often becomes ‘reckless’.
In GE, Jack Welch sold off more than 200 businesses worth more than $11 billion and used that money to make more than 370 acquisitions. Why? He wanted out of industries where conditions were too negative, where he thought it would be too hard for GE to flourish.
A good purpose puts a stake in the ground – It says “We do X, not Y. We will be this, not that.” It’s a commitment.
A good purpose sets you apart; it makes you distinct – Sometimes what matters is not just one innovation, but a cluster of innovations that flow from a new concept, a new way of doing business.
Above all, a good purpose sets the stage for value creation and capture.
Creating value for others is the surest way to capture some yourself.
A great strategy is more than an aspiration, more than a dream: It’s a system of value creation, a set of mutually reinforcing parts. Anchored by a compelling purpose, it tells you where a company will play, how it will play, and what it will accomplish.
Too many leaders, unwilling to give up any possible advantage, take the easy route and dodge or defer the tough decisions.
The resources that are particularly valuable in most strategies are the last two:
1. intangible resources such as brands and corporate reputations, and
2. complex organizational capabilities and routines that are vital to a firm’s distinctiveness yet relatively scarce and difficult to imitate.
Most basic and fundamental questions about what a company does and how it does it:
If you feel your company’s strategy is too complex to summarize in one or two paragraphs, that’s likely a sign that the strategy itself is unclear, or convoluted in some way.
If you’re frustrated with your strategy or with your statement, keep at it. Writing a bad strategy statement is often the necessary prelude to writing a good one.
As we saw with Apple, the strategist’s work is never done. Achieving and maintaining strategic momentum is a challenge that confronts an organization and its leader every day of their entwined existence.
Pablo Picasso put it bluntly: “Success is dangerous. One begins to copy oneself, and to copy oneself is more dangerous than to copy others. It leads to sterility.”
You need to connect with people throughout the business so that you can both inspire them and learn from them. If you don’t fill them in on your thinking, they’re not likely to make strategy part of their agenda.
Duplication – If you had the recipe, you could make Coca-Cola, for instance, but you wouldn’t be able to duplicate its brand recognition, its supply and distribution lines, or its pricing.
Other Book Reviews
Blog Business World: “Cynthia Montgomery recognizes that considerable amounts of new research and empirical data, based on real world results, have emerged from the field of strategy. Through the author’s own experience from working with executives and managers, however, she has concluded that the role of leadership has been downplayed in strategy studies.”
How to Become the Strategist Your Company Needs – Interview with the Author
Forbes: “Over the last twenty-five years thousands of books and articles have been written about strategy, but virtually nothing has been written about the strategist or what this demanding role requires of a leader.”
Thin Difference: “The Strategist is a solid read. It sets the stage for why strategy is an essential leadership responsibility while providing frameworks to use in developing one that is meaningful and adapts with changes. Although I read Good Strategy. Bad Strategy. The Difference and Why It Matters first, The Strategist would have been a great precursor. Together, they are powerful reads for leaders.”
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