Innovation on the Strategic Frontier - Book Report/Review Example

 STRATEGIC INTENT Innovation on the Strategic Frontier The journal article written by J. Douglas Bate titled “How to explore for innovation on your organization's strategic frontier” was originally published in Strategy and Leadership journal and discussed the key concepts of both strategic intent and strategic frontiers. Basically, what it entails is how a company can find and fund innovation initiatives through a thorough study of its strategic intents. Crucial to this effort of conceptualizing its strategic intent is to make a careful review of the organization's “passionate core” which the author defined as the nature of a firm that provides its energy and eventually what drives its success (Bate, 2010:33). The key recommendation of the author is for companies to first make a serious effort to find a strategic frontier which is the area or sector of an industry which the firm identifies as a key battleground for competition in the foreseeable future. This defined area of a strategic frontier is the crossroad or intersection of the firm's set of “passionate core” skills and future changes it had envisioned for itself, based in turn from a careful review of present trends in population growth, demographics, globalization, technological developments, politics, legal environment and all the other external factors which impact on the firm. Once the strategic frontier has in a way been defined and identified, the firm can then formulate its strategic intent based on its “passionate core” skills or what other management experts term as its core competencies. Its purpose is to align the competencies of a company (what it is capable of doing) with what the future market (strategic frontier) will require from it in terms of products and services. Essentially, what the author suggests is for corporate strategy to have a focus and alignment; focus in terms of predicting a future environment based on how present trends will turn out or materialize while alignment requires the firm to have a fit between its innovation initiatives to its resources and competencies to have a higher chance of success in implementing initiatives to quickly identify emergent opportunities and beat the competition to it by capturing a future market before anyone else has even seen it yet; in essence, by getting to the future first. Strategic Intent In the seminal article “Strategic Intent” which appeared first in the Harvard Business Review, professors Gary Hamel and C. K. Prahalad talked on the key factors that make some firms more successful than others. Their extensive research on several multinational case studies showed how successful firms were able to leverage their competencies despite limitations in their resources, personnel and materials by trying to achieve the impossible instead of just the usual approach of Western management thought that uses the so-called “strategic fit” which is in essence, self-limiting in the sense that a company formulates its corporate strategy based on what it has on hand. The authors basically stated the Asian competition had achieved more because they do not subscribe to this Western management principle of “strategic fit.” A key recommendation of the professors is to recognize the significant difference in a hostile competitive environment where the emphasis using Western management thought is to limit a company's prospects and ambitions (a more realistic approach) by matching all the available resources with its corporate intent while the more successful Asian model emphasizes that the company is better off by trying to reach seemingly impossible goals by leveraging instead all its available resources to future innovation initiatives (Hamel & Prahalad, 1989:3). Perhaps in layman's language, the phrase “achieve more with less” is an appropriate term to use to help describe this approach of leveraging whatever resources are available to attain results. The authors had used the example of Japanese companies, which way back in the 1970s were relatively small compared to their American counterparts, had a much fewer resources base, smaller manufacturing volumes, or lacked technical prowess in some high-tech industries and yet amazingly achieved imminent success in the highly-competitive international arena. The second (Asian) model is considered more superior because strategic intent is first tried to be envisioned while the second (Western) model tries to achieve consistency but ends in failure. A Narrative Analysis This article written by Nancy E. Landrum entitled “A narrative analysis revealing strategic intent and posture” was published in the journal Qualitative Research in Organizations and Management: An international Journal back in 2008. The purpose of the author in writing this article was to show how two companies within the same industry (sports apparel, in the shoes subcategory) revealed their strategic intents through annual letters to shareholders. For some people, this may not seem much but a careful study of these letters reveal a lot of how these companies intended to pursue their corporate strategies in the near future. A narrative analysis of this type is rarely undertaken by academicians but over the course of several years spanning the period from 1990 to 1999, the two companies showed contrasting styles. A key concept is that strategic intent is revealed through a literary genre such as an ubiquitous letter to shareholders because this type of letter incorporates senior management vision how to proceed onwards. In this regard, Nike had shown a greater variety in the use of different writing styles while Reebok was somewhat restrained in its selection of a literary style. This is indicative of the way how management approaches various challenges and issues facing them, because a wider selection of literary styles presumes a greater flexibility in thinking. In other words, a propensity to use different or varied writing styles is also a substitute or proxy for the way how management thinks in solving its problems and executing its strategies. Put in another way, organizational narrative styles offer an alternative way to study company strategic intent, other than the usual formal and old-school strategy formulation. It is this a bit informal style of writing that is often even more revealing (sort of an unguarded moment, so to speak) that one can learn the strategic direction that management will soon take. It is this epistemological approach that can offer the best insider's view of what happens to a firm as it assesses the competition and how to stay on top by seeing the future (Landrum, 2008:128). Strategic Importance of Crisis Management This article discussed the importance of a crisis plan put in place by management as part of a wider strategic management process so that future crises are handled well and do not escalate into something much worse. The article “Crises, scenarios and the strategic management process” was first published in Management Decision back in 2006. In particular, it had put a greater emphasis on handling the media and other public agencies acting in behalf of the firm. People normally do not envisage a crisis as part and parcel of their management planning but a crisis plan put in place helps a lot during emergency situations when there is chaos. A key concept propounded by the author is to incorporate several probable scenarios in crisis planning in order to be able to deal with any emergency or disaster in an appropriate manner. This will help the company as well as all the important or relevant stakeholders, preventing a crisis situation from spiralling into a public relations fiasco that harms a firm's reputation for good governance, corporate relations and stockholder concerns. Major relevant contingencies can be planned in advance or anticipated by scenario planning, imagining a certain disaster strikes the company and how well it responds to it, in orderly and appropriate manner. It may be impossible to anticipate virtually everything that can probably happen but a crisis plan put in place can mitigate its disastrous effects and helps in the faster recovery of the firm. It will also prevent gossips and rumours from spreading unnecessarily that worsens a situation if the public are not properly informed and wild speculations will start going around. Scenario planning in a crisis situation is very much similar to formulating strategic intent, as it entails the same process of envisioning a future that is yet to happen and what events likely will occur based on certain trends and probabilities. People will not get caught off guard and react in panic because everyone knows what to do, who is to lead, and whom to tell. It is like planning in a strategic context (Pollard & Hotho, 2006:721), planning for a strategic frontier. References Bate, J. D. (2010) “How to explore for innovation on your organization's strategic frontier,” Strategy and Leadership, 38 (1), pp. 32-36. Hamel, G. & Prahalad, C. K. (1989) “Strategic intent,” Harvard Business Review, May, pp. 1-14. Landrum, N. E. (2008) “A narrative analysis revealing strategic intent and posture,” Qualitative Research in Organizations and Management: An International Journal, 3 (2), pp. 127-145. Pollard, D. & Hotho, S. (2006) “Crises, scenarios and the strategic management process,” Management Decision, 44 (6), pp. 721-736. Read More