I was invited to speak about strategy and innovation at NLD’s event for the international students at the Norwegian Business School BI. I really enjoy speaking to students about our approach to strategy because it is so different from what they learn at business school. Also, it’s not long ago since I graduated from BI myself, and I remember how eye-opening it was to learn new strategy tools and a more innovative approach to strategy. Compared to the analytical, logical and liner view on strategy we learned in school, it was amazing.
We at Engage // Innovate are huge fans of Rita McGrath, who we are also happy to have in our global advisory board. Her book “The end of competitive advantage” is one of my absolute favorite books on strategy, so she was a big inspiration when I made this presentation.
In her book, she states that one of the core issues with strategy today is that it is based on old assumptions. It is based the one dominant idea, that the purpose of strategy is to achieve a sustainable competitive advantage. But when we look at the very big picture of strategy today, we see four game-changers:
- Business models are broken faster
- The lifetime of big companies are getting shorter and shorter
- We need to look at strategy as a portfolio of competing business models
- Disruption as happening faster and faster, and is becoming the new normal
So, while most companies look at strategy as a liner plan – like a strategy for the next three, five or six years, we should learn how to cycle trough business models. That means that not only should executives create new business models, but they have to learn how to get rid of a business model they see wont be competitive in the future. So what we are witnessing is that the willingness to accept the idea that a once successful business model needs to change, is critical to leadership.
Rita states that the reason why the “old” purpose of strategy, to achieve a sustainable competitive advantage, no longer applies to more and more companies is because we live in a fast moving competitive environment. To win in unstable and uncertain environments, executives need to learn how to exploit short-lived opportunities with speed and decisiveness.
During my presentation I also did a quick survey among the about 80 attendees. I asked them the question:
“How many in this room look at themselves as innovative and creative person?”
Less then 10 people raised their hand. No wonder companies protect their analytical and logical approach to strategy. The ability to come up with those innovative ideas are not a magical talent that some people are borne with and some lack. It’s a skill that needs to be build up over years.
“One’s ability to generate innovative ideas is not merely a function of the mind, but also a function of behavior”
The Innovators DNA, Jeffrey Dyer, Hal Gregersen, and Clayton