Your strategy needs a strategy

Posted on August 30, 2012 ยท Posted in Alternative Strategies

This is a powerful article appearing in the September 2012 issue of the Harvard Business Review.  The authors, Martin Reeves, Clarie Love, and Philipp Tillmanns suggest that there are four strategic processes (classical, adaptive, shaping and visionary) and that the appropriate choice is dependent upon your industry envirionment.  They further define four kinds of industry environments depending upon their predictability and mallebility.

As an aside they note that most companies overestimate the predictability and mallebility of their industries.

So what might they say about the home building industry and the appropriate strategic process?

I'm afraid they would agree with me that homebuilding is both predictable and unmalleable, much as many mature industries such as the automoble industry.  Such environments are best strategized with classical processes.  This is the style familiar to most managers and business school graduates — five forces (Michael Porter), blue ocean and growth-share matrix analysis are all manifestations of it.

Home builders should set a goal targeting the most favorable market position they can attain capitalizing on their particular capabilities and resources, and then try to build and fortify that position through orderly, successive rounds of planning using quantitative predictve methods that allow them to project well into the future.

And should you disagree?  How would your position in homebuilding look?

Should you believe you position is more "unpredictable" the authors would recommend an "adaptive" process.  Specialty retailing is the authors' example.  Ever hear of Zara?  It can design, manufacture and ship garments to their stores in two to three weeks.  How fast can you introduce a new home?

Should you believe your position is more "malleable" the authors would recommend a "visionary" process.  Can you mold your market to your advantage?  Think of UPS which has now snapped up 60% of the e-commerce delivery market.

Should you believe your positon is more "unpredictable" and "malleable" the authors recommend a "shaping" process.  Are you a Facebook overtaking MySpace?  This is a strategy made up of a portfolio of experiments.  How costly is any one "experiment" in our industry.

Read this powerful article.