Does strategy work? After over 40 years of academic research and consultant' advice on the subject, many managers remain sceptical. George Yip and Gerry Johnson suggest a new approach.
Why should any manager spend time planning a business strategy?
Most would say that the main reason is to achieve enduring and increasing returns for shareholders. Others would say that the purpose is to achieve competitive advantage in markets. Still others would assert, simply, that the reason for having a strategy is to survive.
Whatever the answer, fundamental to strategic management is the need to change strategies over time. Strategies must be dynamic, not static. A few companies may be fortunate that their environments stay benign for periods of 10 or more years. Such lucky companies may not need to change their strategies, but most companies are not so fortunate. Their business models have a finite life, and they need to strategically transform themselves from time to time. A simple rule of thumb, such as “stick to the knitting”, can be dangerous. Finland’s Nokia did not become the world’s leading producer of mobile telephones by sticking to its original business of making rubber boots.