The Trouble with Strategy: Synopsis
This book describes how teaching and practice of strategy lacks any of the features of a respectable profession:
So it is no surprise that management do not use strategy methods – they either don’t work, or aren’t useful. Why? Strategy research has asked the wrong question for 50 years – what drives profitability? Finance has known for about the same time that a business and its strategy is worth the present value of discounted future cash-flows!
We have used a tool that cannot work – statistical correlation studies. Performance depends on things that build up over time, often a long time – customers, people, assets, products – a process that destroys any seeming direct relationship between items we control at one end of the business and the performance coming out the other end. Strategy “answers” emerging from this process are superficial, unreliable and static – performance depends, say, on having a good position, a distinctive business model , or core competences. So strategy departments in business schools are not – as they should be – the pinnacle that integrates everything about how business works and performs. Sorting out this vast problem will not be easy – we need to:
Then establish professional standards, training and examinations that would be normal in any other respected profession, and inject the essentials of the discipline into MBA and executive training in business schools.