Thinking strategically amid rapid innovation – Lessons from two of the summer’s top business reads
Business books and summer reading are not usually an advisable combination. But two strategy books that I did enjoy over the summer are Rita McGrath’s “The End of Competitive Advantage” and Julia Sloan’s “Learning to Think Strategically”.
McGrath’s book, already longlisted for the FT business book of the year, promises to become a strategy classic as it puts the term transient advantage into both the boardroom and the classroom. Her basic argument is no surprise—given the speed of change in the environment in which most organisations must operate, strategising to sustain a competitive advantage is often a waste of time and sometimes a fatal trap. Instead she proposes a new set of assumptions and practices including a focus upon arenas as opposed to industries in terms of thinking about where to compete—Apple and Amazon being the classic examples of companies with this mindset.
The difficultly is that, as McGrath notes when a competitive advantage is being eroded, leaders are often too slow to disengage. The challenge is to ensure that senior teams do not fall into the trap of focusing exclusively upon products and services where they perceive success.
Most leaders will not disagree with McGrath but might wonder how they should seek out these new potential arenas. This is where Sloan’s book comes into play. While McGrath’s analysis is at the level of the organisation, Sloan’s book discusses how individuals themselves can master the craft of thinking strategically. Her message is that strategic thinking can be learned but that many managers are given the tools that aid strategic planning without the autonomy to make strategic decisions. Sloan advocates action learning for embedding strategic thinking.
It is less and less possible to hold a senior role in an organisation without understanding these two concepts; the decreasing life cycle of any competitive advantage due to the pace of innovation and the need for skills in strategic thinking that can be implemented as they are being learned.
So what does this mean for those trying to navigate an organisation through a rapidly changing competitive environment?
Leaders need to know when to shift resources and people to other projects – usually before the people themselves see an opportunity. In this new wave success is necessarily uncertain. The ability to assess your organisation’s strategic position so that you can shift the focus and resources while the business is still viable can make the difference between business survival and failure.
IMI’s Diploma in Strategy and Innovation was conceived to equip managers with these skills and capabilities. The action learning approach we employ on programmes engages participants in reflecting on their own organisation’s strategic position and the context in which innovation needs to happen, ultimately leaving them with the skills to design and more importantly to implement strategy themselves.
For anyone interested in understanding the challenges of coping with a rapidly changing business environment both books are worth a read. If you’re interested in developing your skills in strategic thinking and innovation check out the programme or contact us directly to speak about how it might fit with your own objectives.
Rita McGrath will be at the IMI speaking on our on IMI’s Senior Executive Programme next Tuesday 10th of September.
Dr. Jonathan Westrup is the Programme Director of IMI’s Diploma in Strategy and Innovation and of the IMI Diploma in Regulatory Management. His expertise is in the areas of business, organisational and regulatory strategy and corporate governance.