This year I created a new, week-long, all-day course at Columbia University on Strategy and Analytics. The course focuses on how to think about strategy both for the organization as a whole as well as the analytics team. It also shows the ways that analytics can help determine the best strategy and assess how well that strategy is succeeding.
In designing the course, it was apparent that much of the established literature in strategy is based on ideas developed decades ago. Michael Porter, for example, is still the source of much thinking and teaching about strategy and competition.
Perhaps a dollop of Christensen’s disruptive innovation might be added into the mix, although that idea is not any longer new. Worse, the concept has become so popularly diluted that too often every change is mistakenly treated as disruptive.
Even the somewhat alternative perspective described in the book “Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant” is now more than ten years old.
Of the well-established business “gurus”, perhaps only Gary Hamel has adjusted his perspective in this century – see, for example, this presentation.
But the world has changed. Certainly, the growth of huge Internet-based companies has highlighted strategies that do not necessarily come out of the older ideas.
So, who are the new strategists worthy of inclusion in a graduate course in 2018?
The students were exposed to the work of fellow faculty at Columbia University, especially Leonard Sherman’s “If You’re in a Dogfight, Become a Cat! – Strategies for Long-Term Growth” and Rita Gunther McGrath’s “The End Of Competitive Advantage: How To Keep Your Strategy Moving As Fast As Your Business”.
But in this post, the emphasis in on strategic lessons drawn from this century’s business experience with the Internet, including multi-sided platforms and digital content traps. For that there is “Matchmakers – the new economics of multisided platforms” by David S Evans and Richard Schmalensee. And also Bharat Anand’s “The Content Trap: A Strategist’s Guide to Digital Change”.
For Porter and other earlier thinkers, the focus was mostly on the other players that they were competing against (or decided not to compete against). For Anand, the role of the customer and the network of customers becomes more central in determining strategy. For Evans and Schmalensee, getting a network of customers to succeed is not simple and requires a different kind of strategic framework than industrial competition.
Why emphasize these two books? It might seem that these books only focus on digital businesses, not the traditional manufacturers, retailers and service companies that previous strategists worked at.
But many now argue that all businesses are digital, just to varying degrees. For the last few year we’ve seen the repeated headline that “every business is now a digital business” (or some minor variation) from Forbes, Accenture, the Wharton School of the University of Pennsylvania, among others you may not have heard of. And about a year ago, we read that “Ford abruptly replaces CEO to target digital transformation”.
Consider then the case of GE, one of the USA’s great industrial giants, which offers a good illustration of the situation facing many companies. A couple of years ago, it expressed its desire to “Become a Digital Industrial Company”. Last week, Steve Lohr of the New York Times reported that “G.E. Makes a Sharp ‘Pivot’ on Digital” because of its difficulty making the transition to digital and especially making the transition a marketing success.
At least in part, the company’s lack of success could be blamed on its failure to fully embrace the intellectual shift from older strategic frameworks to the more digital 21st century strategy that thinkers like Anand, Evans and Schmalensee describe.
© 2018 Norman Jacknis, All Rights Reserved