Developing a Strategy for Your Business? Challenge Tradition
When you're developing a strategy for your business today, tested theories and frameworks still form the foundation. But recent research suggests that conventional wisdom does not always apply in our twenty-first-century business environments. Rapidly changing marketplaces, fluid industry dynamics, technology, and robust analytical tools challenge us to rethink how we run our businesses and make decisions.
Here are three research findings that challenge traditional thinking about developing a strategy.
1. Growth Opportunities Just Might Be Local
If your growth strategy is focused on international markets, consider whether resources would be better concentrated on exploring opportunities in the home-country market.
In the presentation Actually, the World Isn’t Flat, Pankaj Ghemewat provides evidence to suggest that we are actually not as globalized as most of us believe.
2. Outsiders Have Little Impact on Corporate Governance
Highly publicized corporate scandals, increased focus on regulations, and greater demands from stakeholders for disclosure and transparency have placed corporate governance and oversight back at the fore.
Board decisions are sometimes considered more objective if an independent chairman is in place, or if most board members are from outside the organization. But the authors of Seven Myths of Corporate Governance find that such factors actually have little bearing on the quality of governance within the firm. So what does? Less studied attributes like boardroom dynamics and individual director engagement.
3. Profiting from Emerging Market Innovation
Traditionally, firms entered emerging markets with products developed in the home country and adapted for the new market. Managers from headquarters were deployed to provide expertise, communicate corporate best practices, or ensure consistency between local and home country operations.
A study of successful multinational firms, however, suggests that seasoned local managers, adept in bridging the gap between local customer needs and corporate product and market strategies, can often transfer tested innovations from emerging markets to the home country, which then become part of the company offerings globally.
In the Harvard Business Review Finding Great Ideas in Emerging Markets (available to subscribers or for a fee), the authors discuss how successful bridgers share a common set of characteristics. They offer recommendations for cultivating new ideas and integrating them into home-country structures.
Challenge Your Assumptions
The dynamic nature of new market opportunities demands that companies question traditional methods for evaluating strategic alternatives. Given these findings, would you change the way you approach developing a strategy for your organization?
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Program on Strategy
In the program Strategic Business Management, you can learn how proven strategic frameworks can be applied to business challenges, and how firms embrace new approaches to succeed in competitive twenty-first century environments.