Professional Documents
Culture Documents
17-20 http://dx.doi.org/10.1108/02580540910921879
David W. Crain, Stan Abraham, (2008),"Using value-chain analysis to discover customers' strategic needs", Strategy & Leadership,
Vol. 36 Iss 4 pp. 29-39 http://dx.doi.org/10.1108/10878570810888759
Stan Abraham, (2005),"Stretching strategic thinking", Strategy & Leadership, Vol. 33 Iss 5 pp. 5-12 http://
dx.doi.org/10.1108/10878570510616834
Access to this document was granted through an Emerald subscription provided by emerald-srm:217287 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please visit
www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than
290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional
customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE)
and also works with Portico and the LOCKSS initiative for digital archive preservation.
Nicolas Kachaner is a ven well-established firms with the resources to analyze the future find that it is
senior partner in the Paris
office of The Boston E increasingly less predictable. As a result, the value of any reliable strategic foresight
executives can wring from their planning systems can be priceless. Strategy
Downloaded by RITSUMEIKAN UNIVERSITY At 05:06 19 October 2015 (PT)
Consulting Group development because it can offer a head start in competitive markets and even define a
(kachaner.nicolas@ new course remains essential to gaining or holding an advantage. Increasingly, leading
bcg.com). companies are changing their strategy-development processes to keep up with the
Michael S. Deimler is a transformations in the global competitive environment. Leading companies have learned to
senior partner in BCGs
focus on developing great strategists teams and individuals who are prepared to spot
Atlanta office and global
shifts early on, and are agile enough to do what it takes to seize or retain market leadership.
leader of the firms Strategy
practice (deimler.mike@ So what are companies doing to get ahead in the race for strategic foresight? On the basis of
bcg.com). our recent study of strategy-development processes, which included interviews with more
than 100 executives from 20 leading companies, we think that the answer is that they are
stretching the strategy process along three mutually reinforcing dimensions.
B Stretching time horizons to give the short, medium, and long term each its due.
B Stretching their thinking with new techniques to boost creativity and insight.
B Stretching the engagement process to foster dialogue, preparedness, and alignment
across the organization.
PAGE 40 j STRATEGY & LEADERSHIP j VOL. 36 NO. 4 2008, pp. 40-43, Q Emerald Group Publishing Limited, ISSN 1087-8572 DOI 10.1108/10878570810888768
Instead of feuding over how to increase resources, a typical
budgetary debate, ask how to operate with significantly fewer
resources, or even without them.
list of critical megatrends, and then winnowed them down through an interactive process.
There were experiential learning journeys to pressure test the hypotheses with real
customers and classic economic analysis to assess their attractiveness. Ultimately this
process enabled the leadership to settle on a manageable number of potentially high-value
investments.
Medium-term business strategy-setting. Here the focus is on defining the path to enhanced
competitive advantage. What are the critical business initiatives that will drive relative
advantage? And what internal rules of the game guidelines, controls, and incentives
will best support the realization of medium-term strategies and position the company to
outperform competitors and to meet or exceed the markets expectations for growth,
profitability, and asset utilization? For example, shortly after A.G. Lafley took the helm as
Downloaded by RITSUMEIKAN UNIVERSITY At 05:06 19 October 2015 (PT)
Procter & Gambles CEO in 2000, he issued a clear new set of strategic guidelines. Attention
and resources should be focused on core brands. Innovation shouldnt all be
internally-generated and intellectual property should be opened to competitors after
two to three years. And a focus on total shareholder return should ensure forward-looking yet
prudent investment decisions.
Annual business reviews. This time horizon has a dual objective. The first is to review the core
assumptions of the long-term vision and medium-term business strategy in light of weak
signals and market developments. And the second is to define the specific activities that
bring inherently-abstract strategies to life in the rough and tumble of day-to-day business
realities. Leading companies are replacing cumbersome template- and budget-driven
strategic planning with constructive strategic dialogue between the center and the
business units guided by well-articulated questions. This dialogue-based approach also
leads to a shorter process in which better and more timely decisions are made. At Nokia, for
example, each annual business-review cycle starts with a business environment outlook
session that challenges current business assumptions. This session seeks to identify major
long-term trends and possible disruptions in Nokias businesses that need to be
incorporated into medium-term strategies. Then with an updated medium-term strategy in
hand, specific short-term initiatives and budgets as well as the long-range financial plan are
refined to realize it.
j j
VOL. 36 NO. 4 2008 STRATEGY & LEADERSHIP PAGE 41
Turn issues upside down. Instead of asking how to grow the business, ask how to kill it. A
well-known example is the destroy-your-business.com initiative led by Jack Welch to
prepare General Electric for the digital world. Instead of feuding over how to increase
resources, a typical budgetary debate, ask how to operate with significantly fewer
resources, or even without them.
Deconstruct your business. Mentally break the business into pieces along the value chain
and determine in which segments the company has a superior competitive position, which
should be outsourced, and which must be defended against capture by external players.
Role play. Put yourself in the shoes of a stakeholder, either internal (a union leader or head of
another business or functional unit) or external (a competitor, supplier, government body, or
the consumer) and evaluate your business and potential strategic moves from their
perspective. While this tool is commonly used by marketing to understand consumer needs,
it is far less often used for strategy development.
Think like an owner. Understand what your owners value in your strategy, what they expect,
and what keeps them invested while recognizing that owners may have a variety of
specific needs and objectives. Also model the key drivers of your share price based on
financial metrics such as Economic Value Added (EVA) and Cash Value Added (CVA) and
assess how operational plans will, or wont, contribute to the desired level of growth in
Downloaded by RITSUMEIKAN UNIVERSITY At 05:06 19 October 2015 (PT)
j j
PAGE 42 STRATEGY & LEADERSHIP VOL. 36 NO. 4 2008
The best strategies result from collaboration across levels between staff and line
managers, for instance, or among line managers, the executive committee, and the strategy
department. To get there, companies need to stretch their engagement model in three ways.
Alter the tone. Replace the tyranny of planning templates with real, no-holds-barred strategic
dialogue. The idea is to focus on the hard questions. To ensure ample time for rich
discussions, some companies are capping the number of slides presenters may use. At
LOreal, over the past decade, there was a place at headquarters called the confrontation
room to which even junior managers were invited to discuss their strategies with the
executive committee. This challenging and dynamic process nurtured strategists. After all,
most great strategists are mentored, not born or book taught. And dialogs in LOreals
confrontation room also brought the executive committee a rich and current perspective on
market signals.
Change the rhythm. Increase the frequency of reviews, but focus on a small number of
issues. While the traditional annual three-day off-site seminar still prevails in many
corporations, we see a trend toward speeding up the organizations body clock with more
frequent, more focused, and shorter business reviews. Major benefits of on-going strategic
discussion are more adaptive strategies, a tighter coupling between strategy and short-term
actions, and more mature decisions. At Nokia, for example, the process is continuous,
enabling frequent reviews of the existing strategy. Corporate strategic themes are followed
Downloaded by RITSUMEIKAN UNIVERSITY At 05:06 19 October 2015 (PT)
by a small group of top executives including the CEO called the strategy panel. This
panel addresses a rolling agenda of two to four topics every month. The panel then can ask
either the business leadership teams, technology, or brand boards to follow up on the topics.
In addition, some companies have reconsidered their one-size-fits-all annual review
processes and have worked to fit the frequency and depth of reviews to the fundamentals of
the business. At Textron, for example, the duration of annual strategic reviews varies based
on the value at stake within each business unit. And regularly scheduled strategic dialogue
throughout the year concentrates on the issues with the highest value at stake across the
enterprise.
Expand the forums. Multiply the opportunities to discuss and debate strategy. Strategic
conversations should occur at different levels throughout the organization, each with its
corresponding format and resources. Involvement of people at multiple levels allows
strategies to be better thought through, internalized, and implemented. The primary
responsibility for fostering a productive environment for this dialogue falls to the executive
committee and the strategy team. Some leading firms set up alternative forums such as
special project teams or standing strategic committees with high-profile staff to discuss
strategic issues. For example, banker ING has chartered teams to explore new growth
opportunities and, indeed, its ING Direct unit was established this way. Other firms have set
up permanent strategic committees staffed with high-potential managers from across the
organization to study critical strategic issues.
Although no single company in our research was at the forefront on all three stretching
dimensions, some leading companies are making good progress on one or more. Stretching
empowers the organization to shape its destiny through shared strategic aspirations, to
enhance preparedness and agility, and, by developing and engaging people, to foster
affiliation and enthusiasm.
Corresponding author
Nicolas Kachaner can be contacted at: kachaner.nicolas@bcg.com
j j
VOL. 36 NO. 4 2008 STRATEGY & LEADERSHIP PAGE 43
This article has been cited by:
1. Tom Sieber, Barbara E. Weienberger, Tatjana Oberdrster, Jrg Baetge. 2014. Lets talk strategy: the impact of voluntary
strategy disclosure on the cost of equity capital. Business Research . [CrossRef]
2. John J. Oliver. 2013. Media Management Tools: UK Broadcast Media Executives Perspective. International Journal on Media
Management 15, 245-257. [CrossRef]
3. 2008. Stretching the strategy process. Strategic Direction 25:1, 17-20. [Abstract] [Full Text] [PDF]
Downloaded by RITSUMEIKAN UNIVERSITY At 05:06 19 October 2015 (PT)