Page 186 - (DK) The Business Book
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THE ESSENCE OF
STRATEGY IS
CHOOSING WHAT
NOT TO DO
GOOD AND BAD STRATEGY
trategy is a concept with
IN CONTEXT its roots in military history,
S when army generals planned
FOCUS
campaigns of war. Today, it is an
Strategic thinking
overused and often misunderstood
KEY DATES word in business theory. Put
1960s Strategic planning simply, strategy is the way a
grows in popularity, and is business gets from where it is to
enthusiastically adopted in the where it wants to be; it involves
new field of management identifying the choices that must
be made to overcome the obstacles
consultancy.
that lie in the way. Often, choosing
1962 Alfred Chandler’s what not to do is as important as
Strategy and Structure sets out what to do. Strategy guru Michael Kodak failed to recognize that
a model in which a company’s Porter first drew attention to this in film-based photography was effectively
structure matches its strategy, 1985, then specifically explored it in “what not to do.” Choosing to move away
from this area could have made Kodak
not vice versa. his 1996 article “What is Strategy?”
a market leader in digital technology.
For businesses, it is just as
1985 Michael Porter’s
possible to follow bad strategy
Competitive Advantage
as good. Richard Rumelt’s Good and may involve painful decisions.
redefines business thinking
Strategy/Bad Strategy (2012) It should result in a strategy based
on competition, repopularizing
explained that good strategy on clear goals that capitalizes on
the ailing field of strategic
should emerge out of an analysis the company’s strengths and can
thinking in the process.
of the company itself, and its goals. be flexible if external factors change.
1990s/2000s Strategy is SWOT analysis (strengths, Bad strategy often goes hand in
increasingly practiced as a weaknesses, opportunities, and hand with setting a simplistic goal
continuous process by all in a threats) is one of the most popular or vision. Leaders in organizations
business, not just by those at systems for such audits, and to be may use powerful rhetoric about
effective it should be conducted “winning” to motivate staff, but
boardroom level. Nokia says
among middle managers and empty goals are easy to set—
that strategy should be “a daily
people across the organization, not formulating the strategy required to
part of a manager’s activity.”
just those at the top. Good strategy achieve them is much more difficult.
requires analysis of the competition Executives bent on pursuing a bad
and any threats to the organization, strategy will ignore problems and
