So who is your Guru? - the Sequel

Article by Malcolm Anderson

Those of you who found the recent articles on organisational change gurus interesting will likely find this one useful too. Here we examine those brilliant strategic minds who have considered organisations from a more strategic perspective.

Some ask the value of such thinking, so it is important to ensure we appreciate where this high level thinking fits. It is one thing to know that what you do within your organisation is conducted efficiently and effectively and that your people enjoy working there. It is quite another to be sure that what your organisation does for your customers and stakeholders is the right thing to be doing.

There are many examples of great organisations that suddenly discovered time, technology and customers had passed them by. Looking around us today we see Ford greatly downsizing and restructuring while Toyota and Honda thrive. Ford was just bringing out a new and even bigger SUV when the oil price went sky-high.

Kodak are in the throws of a huge turnaround to survive in a digital age because only relatively recently they realised that the mass market for photography had deserted film and was fast moving to phones and digital cameras.

And finally in these examples I present you with Sydney's cross-city tunnel. Here is an engineering masterpiece delivered fully functional early and under budget. But the assumptions made in developing the concept were clearly very flawed, resulting in usage and hence income for the tunnel company being way below that required to repay the loans to fund its building. Result - one bankrupt tunnel company and the New South Wales RTA wondering how they got the strategy so wrong.

So here is a brief tour through the key strategic thinkers of our time.

Igor Ansoff (1918 - 2002)

Ansoff was an applied mathematician who created the Product-Market Growth matrix and is known as the father of strategic management. His matrix enables you to consider ways to grow a business covering four possible product and market combinations and outlining four possible strategies: market penetration (existing markets, existing products); product development (existing markets, new products); market development (new markets, existing products); and diversification (new markets, new products).

The matrix demonstrates how the element of risk increases, the further the strategy moves away from known quantities. Hence product development and market extension involve more risk than penetration. Diversification generally carries the greatest risk of all.

Warren Bennis

Warren Bennis has written several best-selling books on leadership, organisational development and change. His books 'Learning to Lead', 'Beyond Leadership', and 'On Becoming a Leader' concentrate on the traits that help individuals excel in their work. He then examined teamwork with his book, 'Organizing Genius', co-authored with Patricia Biederman. This used case studies from Xerox's PARC labs and the 1992 Clinton campaign to consider collaborative advantage. Professor Bennis is University professor and Distinguished Professor of Business Administration at the University of Southern California and the founding chairman of USC's Leadership Institute.

Robert Buzzell (1933 - 2004) and Bradley Gale

Buzzell and Gale's book, published in 1987, summarises and explains the PIMS (Profit Impact of Marketing Strategy) methodology which uses the data to provide businesses with empirical evidence of which strategies in an industry lead to increased profitability.

The project was started in the 1960s by senior managers at General Electric, who wanted to know why some of their business units were more profitable than others. In the 1970s, this was expanded to external companies to give information on the market in which it operated, the products and the success of the strategies they had implemented.

Peter Drucker (1909 - 2005)

Peter Drucker was passionately interested in the concept of people who worked with their minds rather than their hands. He analysed the concept now known as 'the knowledge worker' and explained how it challenged the common thinking about how organisations should be run.

He was born in Austria, worked in banking and journalism, and gained a doctorate in International Law, before moving to the United States in 1937. He was Professor of Management at New York University from 1950 to 1971 and from 1971 until his death in 2005, he was the Clarke Professor of Social Science and Management at Claremont Graduate University.

Gary Hamel and C K Prahalad

Gary Hamel and Coimbatore Krishnarao (CK) Prahalad co-authored the international best-seller "Competing for the Future" in 1994 based on their thinking concerning the concept of core competencies. They considered that a core competency could be a business process or business culture, technical or subject matter know-how or even good relationships with customers or suppliers. In their view a core competency had to meet three key conditions:

It provides customer benefits
It is hard for competitors to imitate
It can be leveraged widely to many products and markets

In recent years, many business thinkers have advanced the notion that non-core competency activities should be outsourced and the thinking provides a smart and simple set of tests to determine whether a function should be owned, centrally provided or bought in.

Henry Mintzberg

Professor Henry Mintzberg is best known for his book 'The Rise and Fall of Strategic Planning', which criticised aspects of strategic planning and is required reading for anyone taking on a strategic role.

Mintzberg is the Cleghorn Professor of Management Studies at the Desautels Faculty of Management of McGill University of Montreal, Canada. He is a prolific writer, with more than 140 articles and 13 books on management and business strategy to his name.

Kenichi Ohmae

Kenichi Ohmae is most recognised for developing the 3Cs model. This shows how, in constructing a business strategy, there are three main players that must be taken into account: the Corporation; the Customer; and the Competitors. Only by integrating these three Cs in a 'Strategic Triangle' can competitive advantage be understood.

He has a reputation as an advisor on global strategy to foreign governments and many multinational corporations.

Tom Peters and Robert H Waterman

Although Tom Peters better known, the two together co-authored the well-known management book, In Search of Excellence, published in 1982. Its key theme was the idea of solving business problems with as little business process overhead as possible, and of empowering decision-makers at multiple levels in an organisation.

They identified eight themes that they argued were responsible for the success of the companies featured in the book:

Managing ambiguity
Bias for action
Close to the customer
Autonomy and entrepreneurship
Productivity through people
Hands-on, value-driven
Stick to the knitting
Simple form, lean staff

You will see in these a number of phrases that have become catchphrases in management language and are still considered key dimensions in assessing effectiveness in any organisation.

Michael Porter

Michael Porter is the Bishop William Lawrence University Professor based at Harvard Business School and it was his 'Value Chain Analysis' thinking that I endeavoured to test in my MBA thesis in the early nineties. The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities in an organisation that create and build outputs of value to customers.

He may be best known for his Five Forces analysis in which four forces:

The bargaining power of customers
The bargaining power of suppliers
The threat of new entrants
The threat of substitute products

combine with other variables to influence a fifth force:

The level of competition in an industry.

Well, I trust in this third tour of gurus that you have found further interest and the odd book to read to broaden you mind and clarify your thinking.

My thanks to David Murphy and 'The Marketer' magazine for inspiration and ideas.