Switching Strategies - Part 1 of 4

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• Today good strategy is more important than ever to sustain success in the marketplace.
• The strategic givens and fundamental questions—and their answers—shape good
strategy.
• The givens and answers, revisited regularly, also provide early signs whether to stay with
or to change strategy.

INTRODUCTION
A five-year-old software company sells for more money than Ford paid to acquire Volvo. Slow-to-change American Express announces the creation of a new senior level vice president of customer listening. In a matter of a few weeks a loan information company moves from no-com to dot-com to hot-com to no-com. What do all three of these cases have in common? They all have lessons to teach us about the nature of strategy-—the pathways or direction to productivity and profitability. As such, strategy is more macro than micro, more compass than map. We live in a business world taken over by ironies and oxymoron, a world of walking contradictions in which the line between conventional and unconventional wisdom is drawn with disposable pens filled with invisible ink. The rules that once seemed so useful, even profound, now ebb and flow like a hyperactive harvest moon. With the advent of ecommerce,
Internet access, and mobile phones, today’s economy evolves and changes before our eyes, and we dare not blink for fear we will miss something.

In the face of such exponential change we have witnessed a commensurate rise in the importance of strategy for the growth and profitability of any enterprise. Sony, for example,
took an exponential leap, strategically speaking, when it realized that it was in the miniaturization business as well as the electronics and entertainment business. In fact, the traditional planning process has often been bolstered with a strong commitment to well-conceived strategic planning and research. This said, the rise of the importance of strategy did not come easily, since conventional wisdom is replete with axioms that lobby for the status quo. If it ain’t broke, don’t fix it. Never change horses in midstream. The inherent problem with these supposedly tried-and-true concepts is that

EXECUTIVE SUMMARY
• Today good strategy is more important than ever to sustain success in the marketplace.
• The strategic givens and fundamental questions—and their answers—shape good
strategy.
• The givens and answers, revisited regularly, also provide early signs whether to stay with
or to change strategy. they have indeed been tried, but they are often no longer true. Would you want to fly with an airline with the motto, ‘‘If it ain’t broke, don’t fix it?’’ Would you want to be on an aging horse in a rising stream of rapids and white water?
The real challenge today is to develop strategies that are both viable and flexible, implementable yet nimble. The growing tendency of companies to change their strategic plan, core products, and organizational culture with alacrity typically leaves shareholders bewildered, customers underwhelmed, and employees confused. Further, the challenge of developing good strategy is exacerbated by the growing tendency of companies worldwide to
change direction far too often, thereby confusing flexibility with sloppy thinking and
the relative absence of due diligence.
Against this backdrop let’s look then at three practical topics affecting strategy formation and change in more detail. First, what are the assumptions that underlie modern strategic thinking? Second, how do you know when it’s time to change strategy? And third, what is ‘‘good’’ strategy?