The speed and scale of change in today’s business environment are forcing businesses to rethink old assumptions as never before. New opportunities and threats arise daily; they can come almost overnight, and from anywhere in the world. Seizing the opportunities and responding to the threats is more likely than ever to require frequent changes in strategy—everything from a review and rethink to a 90-degree turn or even a reversal.
Whether you’re the CEO of a major corporation, a leader of a business unit, or run your own company, you may not be intimately involved with your organization’s strategy. In my experience, many chiefs aren’t; the job is left to the technicians who’ve made careers of strategy, and have matchless expertise in its quantitative details. I’m going to make the case that you should be—must be--a strategist yourself.
That’s what CEOs used to be. Half a century ago, strategy was considered the most important duty of the president—the person with overarching responsibility for setting a company’s course and seeing the journey through. Leaders didn’t have many tools to work with, but that changed during the 1980s and 90s. Michael E. Porter’s groundbreaking work in bringing economics to strategy-making led to a revolution in the practice of strategy. A whole new industry arose, run by specialists armed with ever-more sophisticated concepts, tools, and techniques. But over time the leader’s own role in strategy faded as the specialists took charge. Chasing a new ideal, we lost sight of the value of what we had—the richness of judgment, the continuity of purpose, the will to commit an organization to a particular path. Reduced to a left-brain exercise, strategy lost much of its vitality and connection to the day-to-day life of many companies.
I’ve taught strategy for more than three decades, mostly to MBA students. In recent years, however, I’ve worked in executive education, particularly a five-year stint in Harvard’s flagship program for owner-managers. What I’ve learned working with these dynamic individuals is that the leader of any business must also be a strategist. No one else can see the business as a whole and rise above the mechanical, analytical details; more importantly, no one else can commit a company to a course of action.
The very act of taking on the job of strategist-in-chief can transform your business. You will, of course, rely on others’ technical skills and knowledge of markets and customers. But in setting the strategic direction and tone, you will be guiding the entire organization—from those who work in the C-suite down to the people who face your customers.
So how do you go about being a leader/strategist? A good way to start is by asking yourself a simple but portentous question: Does your business matter? If it weren’t there, how long would it take, and how difficult would it be, for your customers to find another firm that met their needs just as well?
If you can’t answer this question, you’re not alone. I’ve spent the better part of my life working with leaders who struggle with it. It’s a difficult question. In order to answer it, you have to answer the foremost question a strategist faces: What is your business’spurpose? Nothing is more important to the survival and success of a business than why it exists and what needs it intends to fill. Every concept of strategy that has entered the conversation of business managers—sustainable competitive advantage, positioning, differentiation, added value—flows from purpose.
There are few more dramatic examples than Apple. Steve Jobs and Steve Wozniak didn’t start with a clear purpose, but three years into the game they nailed it in Apple’s 1980 annual report: “Bringing technology to individuals is, we believe, the extraordinary business of the decade.” Jobs would later go on to elaborate that the technology had not only to be great, but “insanely great.” It worked for a while, and in the nascent world of personal computers, Apple staked out a difference that mattered. In time, however, the gap between Apple’s premium prices and those of computers that were merely “good enough” grew very large, and the lack of compatibility and software further dimmed its prospects. The company flailed around in search of a viable strategy. Nothing worked; twelve years and three CEOs after Jobs left, the company was on the brink of failure.
When Jobs returned in 1997, he was a wiser manager. More important, he brought an evolved iteration of Apple’s original purpose with him: he would turn the company’s resources to “the next great thing.” And as we all know, Apple became a fountain of “next great things,” bringing technologies and design of groundbreaking appeal to consumers and ultimately transforming the music and telecommunications industries. From near-bankruptcy in 1997, it soared to become the world’s most valuable technology company in 2010—all because Apple had regained a viable purpose, and a new difference that mattered to consumers.
Note that purpose is not the same thing as core competency. If the things you do well are drifting away from your purpose, or that purpose is no longer relevant in your competitive context, you may have to move beyond them. The Holy Grail of strategy is a long-run sustainable advantage, but it has never been more elusive than today. The specifics of translating your purpose into action—the strategies you will choose and the ways you execute them—will change with the changing business environment. The winning game is to keep your strategy dynamic: to reinvent yourself around your purpose.
For most businesses, reinventing yourself means being one thing while becoming something else. And this is something only a leader/strategist can manage. As a strategist, you’re the person who must watch over the organization, guiding its course, making the choices that bring it back to center day after day and year after year even as you choose when the center--the purpose itself--should evolve. You must decide whether to lean into the wind or not, and judge whether your strategy is dynamic or dead.
Leading strategy is a nonstop responsibility; it can’t be outsourced or solved in one great brainstorming session. You won’t just wake up one morning to find that your company has a new advantage or that its purpose changed overnight. Rather, it will change because the industry changes. It will change because tastes change. It will change because your people change and bring new strengths and skills to the enterprise. And ultimately, it will change because someone made the call to do so—you, the strategist.
This article is based on the author’s book: The Strategist: Be the Leader Your Business Needs (New York: HarperBusiness, April 24, 2012).
