Dubai strategy disaster

Strategy is not solely of concern to firms of course, but to public services, voluntary organisations and others [though you would hardly know it to read the strategy textbooks and journals, which largely ignore these vast sections of the modern economy]. The collapse of Dubai is a spectacular case of strategic incompetence, but also throws up an issue of wider importance.

Dubai followed recommendations by Michael Porter to design its strategy, building on ideas from his Competitive Advantage of Nations, See Innovation, Clusters and Knowledge-Sharing: A Brief Look at Dubai for a still-hopeful note on the brilliance of developing ‘clusters’ of sector-specific business districts. Clusters are supposed to attract critical resources – especially knowledge-workers – to form hot-beds for creating leading-edge businesses. Unfortunately, apart from its grandiose construction projects, Dubai’s strategic management of this concept seems to have overlooked how actually to build all the other resources needed.

Whilst this episode has been a disaster for many people caught up in it, the rest of us have a right to be very angry about it too. In common with other dumb ‘strategies’, it sucked in, burned up, and wasted scarce resources that would have been better used elsewhere – not to mention the vast environmental damage it has caused and will continue to cause. 

The error we would all do well to note is thinking that choice of ‘position’ is all that strategy requires. Military analogies are popular in strategy, but this is like arguing that ‘strategy’ simply means deciding where to put your cavalry and archers before the fight, then completely ignoring both how to get them, and what to do with them once the battle actually gets going.

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