READING 6 - UNIT 9: STRATEGY
READING 1
Activity 1: Discuss these questions
1. Look at the two views about planning. Which do you agree with, and why?
a. ‘Long-term planning is essential for any company. It plots where a company wants to go, and how
it’s going to get there.’
b. ‘Strategic planning is a complete waste of time. In this day and age, you simply cannot foresee exactly
how markets will evolve.’
2. In what ways do you think the four companies below have developed good strategies?
Activity 2: Useful Vocabulary
Part of
Word/Phrase Definition and Example
speech
file away
adversity
downturn
deductive
oversee
hidebound
awareness
resilience
building in some
slack
endure
Activity 3: Reading
Living strategy and death of the-five-year plan
by Stefan Stern
Is strategy dead? Chief strategy officers will deny it. Some strategy consultants may reject the idea, too.
But markets are unpredictable. The economic outlook is uncertain. The world has changed. If old-style
strategy formulation is not exactly dead, then it is hardly in the best of health.
During periods of recession, many leadership teams have only one strategic goal in mind: survival.
Grander visions are filed away or forgotten. In a recent paper, ‘Thriving under adversity’, senior Boston
Consulting Group partners Martin Reeves and Michael Deimler argue that, in recessions, simply cutting
costs has not been enough to ensure a healthy recovery. ‘If survival buys time, it does not guarantee
sustainable competitive advantage,’ they write. The winners in downturns have pursued, and achieved,
increased sales.
So companies need a strategy for growth. But I began by arguing that the traditional approach to
developing strategy – long, internal debate leading to the announcement of three-or five-year plans – seems
to belong to another era. So what does smart, 21st-century strategy development look like? Unsurprisingly,
some sharp minds in the strategy consultancies have been giving this question some thought. At BCG, the
same double act of Reeves and Deimler has produced another paper, ‘New bases of competitive
advantage’, that looks at something they call ‘adaptive advantage’. This is strategy, too, but not as we
know it.
‘Organisations with adaptive advantage recognise the unpredictability of today’s environment and the
limits of deductive analysis,’ they write. New problems are constantly emerging. Well-run businesses
respond effectively to them.
How? First, they process relevant data – ‘signals’ – quickly, and react to them. Google is an obvious
master of this, getting closer than anyone else to understanding how online advertising works. Second, they
see clearly how their business fits into a wider context. Amazon has made sure its Kindle e-book reader is
supported by a network of valuable partners. Third, they are alive to social change and shifting customer
preferences. Toyota managed this with its hybrid Prius car. Fourth, they experiment effectively, as Procter
& Gamble does when trialling products. Lastly, they draw on the talents of the best people they can find –
whether they employ them or not. Software companies such as Red Hat and TopCoder oversee large
networks of programmers, using the best people with great flexibility. Their permanent staff is relatively
small. But they have access to many more.
This vision of a far more free-flowing, less hidebound corporation, ready to change strategic direction fast,
is shared by Lowell Bryan, a director at McKinsey. He may be a 30-year veteran of the firm, but he
discusses these ideas with the enthusiasm of a new hire.
‘You have to give up the pretence that you can predict the future,’ he says. ‘This is about managing much
more dynamically. It is a complex, adaptive world, and leaders have to navigate their way through it. How
can you say today what the economy will be like even six months from now?’
Leaders need to show a bit more humility, while living with all this uncertainty. ‘Strategy is really an
evolving idea which develops over a long period, on a long and winding road,’ he says. ‘And this new
world calls for just-in-time decision making.’
Adapt to survive. The danger for successful companies, Mr Bryan says, is that over time they lose the very
abilities or qualities that earned them their market-leading position in the first place. They no longer have
the same flexibility, awareness and resilience they once did. Building in some slack – unscheduled meeting
time, for instance – might create the no space where some resilience can be re-established, Mr Bryan adds.
Strategy has changed. While the eternal truths – about market position, scale and capabilities – endure, a
more dynamic and adaptive approach is now needed. Leaders need to be ready to make necessary
adjustments and bigger changes.
Activity 4: Replace the words in italic in these sentences with the words or phrases from the article in
the box.
are alive to free-flowing hardly sharp thriving
1. The new shopping mall is very successful, but the local shops are closing down
2. Their legal team is able to think and understand things very quickly.
3. Everyone was relaxed at the meal, and the conversation was continuous and uninterrupted.
4. This is not the best time to make radical changes to our strategy.
5. The shoe manufacturers know about the importance of the threat posed by foreign imports.
Activity 5: Read the article again and complete this summary, using between one and three words in
each gap.
According to the article, old-style strategic planning is a thing of the past. However, beyond trying to
survive, companies do need a strategy for (1) …………., even in periods of (2) …………., in order to
ensure healthy (3) …………. and competitive advantage.
In a paper on strategic development, experts at Boston Consulting Group talk about the concept of (4)
………….. They argue good companies act in five key ways: they respond to (5) ………….very fast; they
try to work with (6) ………….; they perceive changes in (7) ………….; they trial their goods and services
effectively; and they work with the best (8) ………….. Strategy has changed, and companies need to be
more (9) …………..
Activity 6: Discuss the following questions
1. Who do you think is the intended audience of the article?
2. What is the writer’s purpose? Is there more than one, e.g. to explain / persuade?
3. Are there any quotations used in the article? For what purpose are the quotations used?
4. What emphatic techniques are used? Are any repeated?
Activity 7: Discussion
How have businesses (for example: a bank, a supermarket …) you are familiar with adapted to change?
Talk about the challenges they faced and how they responded.
