Making Strategy:

Learning by Doing

Christenson, C.M. (1997, November-December). Making strategy: Learning by doing. Harvard Business Review, 141-156.

With practice and the right process, executives can develop a core competence in strategic thinking.

Think of the great corporate strategies of yesteryear: GM’s vertical integration and design of cars, Sears’s reliable, reasonably-price goods sold in stores in growing suburbs…  Sears and GM developed winning strategies for the time, but like countless other companies, once they found a strategy that works, they wanted to use it, not change it.  As a result of this active ineria, most management teams do not develop a competence in strategic thinking.
           
In Making Strategy, Harvard Business School Professor and best-selling author Clayton Christensen makes the case that two particular challenges exist in developing and implementing competitive strategies.  First, managers must ensure that the strategy is not a reflection of the biases of the management team.  Second, manager must ensure that once a company has outlined a viable strategy, it allocates resources in a way that accurately reflects the strategy. 

Echoing a mantra from many of Christensen’s works, strategy (planning and thinking) is not just about best practices and benchmarking, it’s about identifying the driving forces affecting the company’s health.  This article presents a methodology executives can employ to conceive and implement a creative and coherent strategy – and the competency to repeatedly reassess the organization’s direction.  Such a competence can cultivate both managers’ strategic thinking and their understanding of how strategic are associated with the market.

Christensen recommends the following methodology for “making strategy”:

Stage One: Identify the Driving Forces in Your Company’s Competitive Environment
            - Brainstorm the driving forces
            - Map the driving forces
            - This will protect management from misguided distraction from quantitative
           figures tangential to strategy.
Stage Two: Formulate Strategy that Addresses the Driving Forces
            - Brainstorm ideas for what needs to be done and devise initiatives for each
           driving force
           - Create a strategy matrix
           - Map the functional strategies
Stage Three: Create a Plan for the Projects to Implement the Strategy
            - Caveat: Change can only be implemented if management uses a deliberate
            mechanism to guarantee the process used for distributing resources across
            projects mirrors the strategy.

By repeatedly following this methodology, Christensen maintains that management teams will grow a competence in strategic thinking.

Back to Aslan News