Strategic Management

C.K. Prahalad’s death last month has inspired a plethora of literature on the strategic thinking of the man who coined the concepts of “strategic intent” and “core competence.” Strategic management – the process of getting from the current state to the future state that ensures competitive advantage – has never been more relevant. In a hypercompetitive global market, more companies are feeling the effects of Prahalad’s “strategic decay” – the idea that strategy starts to decay the moment it is created. Strategic management can help managers think smarter and act faster.

Organizations that used strategic planning during the economic crisis were more successful in their pursuit of growth opportunities and more confident about short-term growth prospects, according to a 2009 study of 190 US firms sponsored by the Association of Strategic Planning. As a brief review of the current research shows, strategic management is rising to the challenge in a time of economic uncertainty.

Failing fast

By driving strategic management further into the organization, companies are finding new growth opportunities. At the University of St. Gallen, Switzerland, strategic management experts Drs. Christoph Lechner and Markus Kreutzer identified four modes of coordination across multi-unit firms that lead to corporate growth, based on the analysis of 51 corporations in Asia, Europe and North America. In the context-setting mode, for example, international food producer Hügli equipped middle managers across Europe with strategic management training and tools – business and financial planning, risk analysis, project flow charts – to identify and execute growth initiatives. Creating friction

Another way in which to eke out growth is by optimizing friction, according to research by Wharton management professor Olivier Chatain and INSEAD strategy professor Peter Zemsky in a review of How a Little Friction Can Change a Competitive Landscape. Sustainability and growth

Sustainability is a hotbed of research and the focus of leading global management thinker CK Prahalad before his death last month. From product development to processes and business models, companies now have to think strategically about sustainability.

CK Prahalad et al

Sustainability is the key driver of innovation, says Prahalad. It’s a brave new world for strategic management but one populated with fresh ideas and tools that are raising the discipline to a new level.