Emerald Group Publishing Limited
Article Type: Editorial From: Strategy & Leadership, Volume 42, Issue 6
This issue is all about adapting the corporation to cyclonic competitive conditions. The articles, which introduce exciting conceptual ideas and guidance on best practice, offer:
Seven surprising tools for developing market-making innovation in the Creative Economy.
A bold proposal for instituting a dual corporate operating system – a network for market-making innovation alongside a hierarchy that maintains efficiency.
A conversation with innovation guru John Kotter about his innovation network system.
A comprehensive look at world-class value chain integration management at Apple, Inc.
New insights for corporate strategists from successful value investors.
A guide to avoiding counter-productive short cuts to the scenario development process.
In his masterclass, “Identifying the new opportunities and threats in the Creative Economy,” Stephen Denning looks at the success factors in an emerging business environment, an operating arena with unique “physics” that successful practitioners are beginning to be able to describe. To distinguish between real and false innovation opportunities in the Creative Economy, Denning examines the advice of serial entrepreneur Peter Thiel who offers “the seven questions that every market-creating business must answer.”
In his article, “Seizing opportunities and dodging threats with a dual operating system,” John P. Kotter, a Professor of Leadership, Emeritus, at Harvard Business proposes that today’s organizations need a powerful new operating system to address the challenges posed by mounting complexity and rapid change. His solution, which has been adopted successfully by many organizations, is to add a second operating system that is organized as a network that can create agility and speed. He notes that all successful organizations operate with a dual system more or less during the most dynamic growth period in their life cycle.
In his interview of John Kotter, “Boldly leading with a dual operating network – John Kotter addresses some likely practitioner concerns,” Brian Leavy, Professor of Strategic Management at Dublin City University Business School asks how the proposed system would enhance a company’s ability to continuously reconfigure and recombine resources and activities to maintain a dynamic balance between stability and agility, efficiency and adaptability. Kotter’s basic idea is to let the traditional management-driven hierarchy and associated processes and controls focus on “doing today’s job well,” delivering the day-to-day performance demands on the business, while a strategy accelerator network assumes the burden of work that “demands innovation, agility, difficult change and big strategic initiatives.” In effect, the network structure mimics “successful enterprises in their entrepreneurial phase,” where initiatives and sub-initiatives typically “coalesce and disband as needed.” So the intriguing dual operating system solution proposed by Kotter is not totally unfamiliar to veteran executives.
In his case, “Why Apple’s product magic continues to amaze – skills of the world’s #1 value chain integrator,” Will Mitchell, a Professor of Strategy at the Rotman School of Management addresses the question: What underlies the ability of Apple Inc. to bring its designs to commercial stardom and propel shareholder value? His case chronicles how Apple practices two related skills that are critical complements to Apple’s design talents: its ability to combine “build, borrow and buy” strategies and its world-leading abilities as a value chain integrator. The company’s lengthy success record proves it knows when and how to develop products and components internally, when to ally with other firms and when and how to acquire and integrate other companies.
In his masterclass, “New insights for corporate strategists from a renowned value investor,” Joseph Calandro, Jr a Managing Director of a global consulting firm and a Fellow of the Gabelli Center for Global Security Analysis at Fordham University, looks at how new insights by prominent value investors are strategically significant and therefore of particular interest to senior corporate executives. He asks noted value investor Marty Whitman why he recommends that leaders focus on creditworthiness instead of “shareholder value.”
In his article, “Four blind alleys of scenario analysis,” Gerald Harris, President of the Quantum Planning Group and a former strategic planner at Pacific Gas & Electric, warns that some variants of scenario methodology, especially those that profess to take advantage of short cuts, have design flaws that undermine the whole purpose of scenario analysis. By pursuing an attenuated analysis method – such as one that analyses just a few variables, or considers only a “best-case, worst-case, most-likely-case” set of futures – executives may later be surprised when unforeseen events for which the organization is unprepared suddenly emerge.
Brian Leavy, who is AIB Professor of Strategic Management at Dublin City University Business School (http://email@example.com) and a Strategy & Leadership contributing editor, was recently selected as one of his university’s “teaching heroes” by the National Forum for Teaching and Learning in Higher Education (Ireland). The announcement letter noted, “The teaching hero award is the first of its kind in higher education in Ireland. Each higher education institution’s student body has worked with the National Forum to ensure that we identify teachers across the sector who have had a positive and lasting impact on students’ learning experiences. This is a new way […] to thank and recognise those excellent teachers at a national level.”
Professor Brian Leavy
A new contributing editor
Joseph Calandro, Jr is joining our team of contributing editors. Like his article in this issue, his many S&L articles connect value investing with best strategic management practice. They include: “The margin of safety principle and corporate strategy,” V39, N5; “Strategic M&A: insights from Buffett’s MidAmerican acquisition,” V39, N4; “Henry Singleton, Warren Buffet’s corporate leadership model,” V38, N6 and “Disney’s Marvel acquisition: a strategic financial analysis,” V38, N2. He is a Managing Director of the global consulting firm PwC, Fellow of the Gabelli Center for Global Security Analysis at Fordham University and author of Applied Value Investing (NY: McGraw-Hill, 2009).
Robert M. Randall