Stein just returned from a business school lecture on how corporations develop strategy. We picked his brain on the foundations of corporate strategy.
- What was the gist of your message? “Actually, it was quite similar to the ideas we bring across to boards and management all the time: there is no way you can succeed everywhere. You need to make choices. On the positive side, your people will start believe in the plans and you get consistency all the way from ambitions and product development to your decisions on positioning, resource allocation and action plans. On the less comfortable side – you cannot ignore dilemmas and you cannot pretend to please everyone.”
- What is most difficult to explain? “Nothing is difficult as such, but I realize we have to be quite explicit about the way we work. We hope to create a high level of comfort in the end, but you do not gain comfort from being told what to do. Our job is more frequently to ask good questions, help managers frame decisions, resolve dilemmas and get buy-in from their organization. I also think most people would be surprised to find how much time we spend on trying to prove ourselves wrong and put our ideas to difficult tests. In the end, that is the best way of gaining comfort when you need to make a difficult choice.”
- How do you know it works? “The plans themselves do not change much. Rather, we need to look for actions and transformation. I can share with you some encouraging examples; lately, we have been doing a lot of work in the oil services industry where good strategies seem to work and the ones without a consistent approach loose badly. Knowing where you can make a difference – where to play – and how you can win has proved essential. I also believe we have made a difference in our recent work with public transport, e.g. work on how to segment customers and understand how a commuter differs from a tourist or an urban youth on her way to pick up pizza. A lot of public money is wasted establishing misconceived services – I have been fortunate to work with some exceptions.”