The place for Kim’s views

Strategy and leadership

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I see the latest Harvard Business Review (Jan 08) includes a nice piece from Cynthia Montgomery on ‘Putting leadership back into strategy‘. It makes important points  … that strategy is about creating value [a.k.a. growing future cash flows], rather than sustaining high profitability … that strategy is a continuous process of improvement rather than an occasional event … and that strategy is the CEO’s job.

Not so sure about the implication that this ‘leadership’ is a semi-mystical ...

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Profitability or growth?

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Much of what we know about strategy comes from research into why some firms are more profitable than others – but investors value growth in cash flows [see chapter 1 of Strategic Management Dynamics]. An article in McKinsey Quarterly ‘How to choose between growth and ROIC‘ [return on invested capital] confirms the importance of this issue and shows how investors benefit from growth, depending on companies’ profitability.

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Crisis in Strategy?

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The Academy of Management conference each summer brings together large numbers of faculty from business schools, mostly from the United States but also from other countries. Amongst the sessions on strategy at this year’s event in Philadelphia, discussions expressed disquiet about the state of the subject and its status in departments and teaching in business school. Observations and feelings reported include:

  • ratings for strategy courses are falling, and students are dropping strategy classes
  • other subjects [Economics, Marketing, OB, Operations, Entrepreneurship] are stealing ...
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