Chapter 3 – Tools, What Tools?
Kim starts this chapter by reminding the reader of something everyone suspects – that almost no-one actually uses any of the methods and tools that are supposed to be useful for developing and implementing strategy. (Most executives think strategy is SWOT analysis – though calling this “analysis” implies there is more substance to the concept than there actually is!) He explains a simple reason why strategy methods are not used – most are neither reliable nor useful for guiding management through the design or management of their strategy.
The chapter reviews the different categories tools on offer to show why they are so weak – check-lists that do little more than remind you of things to think about (no idea how to think about them), option-lists to choose from, often contrived and false alternatives, such as exploiting where you are, or ‘exploring’ opportunities. The chapter describes the dangers of some of the “magic bullets” that are supposed to guarantee success, and the simplistic two-by-two grids that claim to make clear what in reality are complex and subtle issues. Lastly, it takes apart the widespread use of word-and-arrow diagrams, or “frameworks” that imply some known set of causal relationships that lead to some unproven and undefined success, but which in reality have neither firm foundations of principle nor any reliable means for using them.
The chapter ends with a review of some of the very few useful methods that actually do have some underlying rigour and might just be useful, and tips for spotting the difference.
References
Not all references may be available freely to all readers or in all regions.
- See, for example, Richard Rumelt, 2011, Good Strategy Bad Strategy: The Difference and Why It Matters, New York: Crown Business.
- Robert S. Kaplan and David P. Norton, 2001, The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Boston: Harvard Business School Press.
- Darrell Rigby and Barbara Bilodeau, 2011, Management Tools and Trends, 2011, Bain & Company. Retrieved 28-3-12.
- To understand professional scenario-based planning, see the articles by members of Royal Dutch Shell’s strategy team that brought it to widespread attention in the 1980s, including: Pierre Wack, 1985, “Scenarios: Uncharted Waters Ahead“, Harvard Business Review, 63(5), pp. 73–89; Pierre Wack, 1985, “Scenarios: Shooting the Rapids“, Harvard Business Review, 63(6), pp. 139–150; and Arie de Geus, 1988, “Planning as Learning“, Harvard Business Review, 66(2), pp. 70–74.
- Michael Porter, 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: The Free Press; Michael Porter, 1985, Competitive Advantage: Creating and Sustaining Superior Performance, New York: The Free Press.
- Renée Dye and Olivier Sibony, 2007, “How to Improve Strategic Planning“, McKinsey Quarterly, August, pp. 40–49. Retrieved 28-3-2012.
- George Stalker, Jr. and Robert Lachenauer, 2004, “Hardball: Five Killer Strategies for Trouncing the Competition“, Harvard Business Review, 82, pp. 62–71.
- Michael Treacy and Fred Wiersema, 1997, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, New York: Basic Books.
- See, for example, Monica Franco, Robert Wiseman, Bernadine Johnson Dykes, and Roman Weidlich, 2011, “Pursuing a Dual Strategy of Exploitation and Exploration”, Think: Cranfield. Retrieved 20-3-2012.
- A good tool for this kind of investigation is Google Scholar, a search system designed specifically for tracking down academic articles and related books.
- This thesis (Downsizing: Jonathan Lurie) can be found at http://www.reocities.com/WallStreet/exchange/4280/.
- Eric Abrahamson, 2004, Change Without Pain: How Managers Can Overcome Initiative Overload, Organizational Chaos, and Employee Burnout, Boston: Harvard Business School Press.
- Richard Foster and Sarah Kaplan, 2001, Creative Destruction: Why Companies that Are Built to Last Underperform the Market—and How to Successfully Transform Them, New York: Doubleday.
- Bruce Henderson, 1973, “The Experience Curve—Reviewed (Part IV): The Growth Share Matrix or The Product Portfolio”, BCG Perspectives, 175, Boston Consulting Group. Carl Stern and Michael Deimler, 2006, The Boston Consulting Group on Strategy: Classic Concepts and New Perspectives, Hoboken, NJ: John Wiley & Sons, Inc., pp. 12–39.
- David Collis and Cynthia Montgomery, 1998, “Creating Corporate Advantage”, Harvard Business Review, May–June, pp. 71–83.
- http://pimsonline.com/about_pims_db.htm. Retrieved 24-4-2012.
- R. H. Waterman, T. J. Peters, and J. R. Phillips, 1980, “Structure Is Not Organisation”, Business Horizons, 23(3), June, pp. 14–26.
- Robert S. Kaplan and David P. Norton, 1996, The Balanced Scorecard: Translating Strategy into Action, Boston: Harvard Business School Press.
- Strategy maps go beyond just measuring and reporting the four domains of performance covered by balanced scorecards. They enable management to lay out a logical time-phased series of initiatives to be taken in each of these domains so as to improve strategy and performance. See Robert S. Kaplan and David P. Norton, 2004, Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Boston: Harvard Business School Press.
- Bruce Henderson, 1973, “The Experience Curve Reviewed”, in Carl Stern and Michael S. Deimler, Eds., 2006, The Boston Consulting Group on Strategy: Classic Concepts and New Perspectives, Hoboken: John Wiley & Sons, Inc., pp. 12–24, gives a number of examples.
- Patrick Hearps and Dylan McConnell, 2011, Renewable Energy Technology Cost Review, Melbourne Energy Institute. Retrieved 8-4-2012.
- Michael Porter, 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: The Free Press; Michael Porter, 1985, Competitive Advantage: Creating and Sustaining Superior Performance, New York: The Free Press.
- See, for example, Ronald Wilcox, 2011, A Practical Guide to Conjoint Analysis. Kindle Edition.
Cartoon by “Higgins“