The Right to Win. This article was written with Art Kleiner. It’s 8 a. m. in the executive conference room of a large global packaged- foods manufacturer (a real company, its name withheld to preserve confidentiality). For the past two months, a team made up of 1. Each is now summed up in a crisp 2. The first option focuses on innovation. The company would rapidly develop and launch many new types of snacks and foods, packaged in new and interesting ways, offering leading- edge nutrition and convenience. Under the second option, the company would get closer to its customers, producing the food people ask for. It could incorporate ideas gathered online into its offerings and provide busy working families with customizable, convenient, and well- balanced meals. The third option would involve transforming the dynamics of the relevant food sectors by competing more aggressively. The company would become a category leader by investing in new process technology, rightsizing operations to push costs down, and completing key acquisitions. After the screen goes blank, the CEO leans forward and asks a simple question: “Which strategy would give us the greatest right to win?” His tone, calm and direct, makes everyone sit up a little straighter. Sunbelt Midwest, with 4 offices in Minneapolis, Chicago and Milwaukee, has a trusted team of business brokers to help you buy or sell your business at the highest. Call 612.455.0880 for more information. Download the Innography Overview. Innography Advanced Analysis allows you to answer the most important IP and patent search related business questions. Download Now. THE STRATEGY+BUSINESS COLLECTION: THE EXECUTIVE GUIDE TO STRATEGY. This article is featured in the strategy+business compendium “The Executive Guide to Strategy,” designed exclusively for smartphones and tablets. The. 2nd Business Edition Landscape Strategy PageAnd they probably should, for this is the core question underlying every business strategy, although it isn’t always phrased that way. A right to win is the ability to engage in any competitive market with a better- than- even chance of success — not just in the short term, but consistently. Imagine a coach, observing a player entering a sports competition, saying, “That kid has the right to win out there.” Or a teacher, watching a student about to take a test, saying, “That student deserves to excel.” What they are really saying is, “That contestant is the right player, in the right type of contest, with the precise capabilities needed to meet this particular challenge.” Of course, the contestant will lose at times, but over the years, a consistent innate advantage will establish itself, giving this contestant the ability to pull off seeming miracles while making it all look easy. This essential advantage is particularly rare in business — a more free- form and unpredictable game than sports or academia. But it is increasingly important at a time of unprecedented competitiveness. The phrase right to win may strike some observers as arrogant. After all, no company has this kind of assurance handed to it. But that’s precisely the point. The right to win cannot be taken for granted. 2nd Business Edition Landscape Strategy ImplementationIt must be earned. You earn it by making a series of pragmatic choices that align your most distinctive and important capabilities with the way you approach your chosen customers, and with the discipline to offer only the products and services that fit. At Booz & Company, where we call this approach a capabilities- driven strategy, research and experience have led us to conclude that only high levels of coherence — among market strategy, capabilities systems, and a company’s portfolio of offerings — can give any firm the right to win. All corporate strategies are at heart theories about the right to win. That is why, for those trying to understand the nature of business success, the history of strategy is both helpful and fascinating. One valuable recent source is The Lords of Strategy: The Secret Intellectual History of the New Corporate World (Harvard Business Press, 2. Fortune managing editor Walter Kiechel recounts the prevailing theories of business strategy over the past 5. Drawing on Kiechel’s history and those of others, such as Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel in Strategy Safari: The Complete Guide through the Wilds of Strategic Management (2nd ed., FT Prentice Hall, 2. See Exhibit 1.) The map depicts four broad schools of strategy; each represents a hypothesis about the nature of long- term success in a competitive world. The Basic Tension in Strategy. Business strategy, as we know it today, has a relatively short history. The word strategy was first applied in print to mainstream business in 1. Alfred Chandler’s book Strategy and Structure: Chapters in the History of the Industrial Enterprise (MIT Press). Since then, at least a dozen major trends and ideas have appeared under the rubric of business strategy, often in great conflict with one another, often drawing companies in very different directions. Despite their differences, all four schools of strategy represent attempts to resolve the same basic underlying problem: the tension between two conflicting business realities. The first reality is that advantage is transient. Even the most formidable market position can be vulnerable to technological disruptions, upstart competition, shifting capital flows, new regulatory regimes, political changes, and other facets of a chaotic and unpredictable business environment. As William P. Barnett showed in The Red Queen among Organizations: How Competitiveness Evolves (Princeton University Press, 2. Chairman; Chief executive officer (CEO) Chief financial officer (CFO) Chief information officer (CIO) Chief human resources officer (CHRO) Chief business officer (CBO) Chief technology officer (CTO). Think and act strategically every time In today's business environment, strategic planning stresses the importance of making decisions that will ensure an organization's ability. Rapid economic growth in emerging markets has made advantage even more transient, bringing billions of people into the global economy, along with hundreds of energetic new business competitors. One might assume that the answer is to become completely resilient, morphing to match the changing demands of the market. But companies can’t, because of the second reality: Corporate identity is slow to change. The innate qualities of an organization that distinguish it from all others — its operational processes, culture, relationships, and distinctive capabilities — are built up gradually, decision by decision, and continually reinforced through organizational practices and conversations. Very few companies have thoroughly reinvented themselves, and those that have managed it have typically had to force many people out, including top executives, and to replace them with new recruits chosen for a different set of attitudes and skills. Even when leaders recognize the need for change or know that the company’s survival is at stake, this identity is difficult to shift; if no deliberate effort is made to refresh it, it can stagnate to the point where it erodes advantage from within. As writers such as Jim Collins, Clayton Christensen, and Donald Sull have noted, it’s all too easy for established companies to fall prey to complacency and hubris (Collins), entrenched customer relationships and disruptive technologies (Christensen), or inertia (Sull). Yet although the “stickiness” of a company’s identity is typically regarded as a weakness, it’s also a great source of strength. No company can survive long, let alone distinguish itself, without a rich body of capabilities and a resonant corporate culture. Indeed, the fundamental enabler of strategy — the source of competitive advantage — is a distinctive, coherent corporate identity. This is the quality that attracts customers, investors, employees, and suppliers. It is grounded in internal capabilities (that is, the things your company can do with distinction) and in market realities (that is, the games in which your company chooses to play). The yin and yang of strategic fad and fashion — the movement of business leadership from one trend to another over the past 5. The answer is not to keep adopting new theories in hopes of finding the right answer, but to develop your own capabilities- driven strategy: your own theory of coherence for your business. How do you capture value, now and in the future, for your chosen customers? What are your most important capabilities, and how do they fit together? How do you align them with your portfolio of products and services? The more clearly and strongly you make these choices, the better your chances of creating a corporate identity that gives you the right to win in the long run. Not surprisingly, each of the four basic schools of thought in Exhibit 1 (position, execution, adaptation, and concentration) has something significant to offer business strategists, so long as they are adopted in an appropriately balanced way. The Value of Position. According to Walter Kiechel, strategy became relatively formal in the 1. The first was an increasing amount of available data on business costs, prices, and operational performance. The second reason was uncertainty, and the anxiety that went with it. The economic stability of the early 1. No company could ever be sure it would remain on top (even in established industries such as steel and automobiles), global economies were highly interconnected (although it wasn’t always quite clear how they might interact), and corporate decision making was increasingly constrained by fiercer capital markets and upstart technologies. When intuitively obvious decisions fail, people yearn for better guidance. Thus, starting in the mid- 1. Napoleon, Carl von Clausewitz, and Sun Tzu, evolved into an irresistible business management fashion. In its pure form — as delineated by Kenneth Andrews and Igor Ansoff, the premier authorities on business strategy at that time — a strategy was an overarching plan for growth, usually written up in a formal document and endorsed by the CEO, aimed at creating an unassailable position for the company in the marketplace. These early efforts by the position (or positioning) school assumed that the right to win would be held by companies that comprehensively analyzed all critical factors: external markets, internal capabilities, and the needs of society. Although Andrews said the goal should be a simple “informing idea” about the direction of the business, it inevitably became a complex checklist of strengths, weaknesses, opportunities, and threats (the origin of the SWOT analysis still prevalent today). This was long before the invention of the spreadsheet program, so big companies hired armies of planning staffers to compile all this data into elaborate documents, which were debated in annual strategy sessions that became exercises in bureaucratic complexity.
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