The New Strategist

Shape your Organization and Stay Ahead of Change

Günter Müller-Stewens

• Publisher: Kogan Page
• Year: 2020
• ISBN:
  9781789661132
• Edition: 1
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

As organizations face an unprecedented rate of change, how should the role of the strategist adapt to address new challenges? Based on original research and consulting projects from the Institute of Management and Strategy, University of St. Gallen, The New Strategist is a practical guide which explains how to execute strategy, not just think about the theory. It examines day-to-day strategy work, explores the competences required by strategic leaders, and maps out the strategist's tools of the trade, including processes, initiatives and discourse. Using a rich and unique data set, this book looks at the roles of different strategists in an organization and emphasizes the importance of managers and strategy consultants as well as Chief Strategy Officers and other leaders. Crucially, The New Strategist focuses on the practice of strategy rather than the theory, answering key questions around how professional strategists should work and which methods and techniques they should draw upon. This timely and authoritative text will support and strengthen managers in fulfilling their strategic leadership responsibilities, allowing them to contribute to the professionalization of the field and ensure their role is suitable for the future of business.

01

Professionalizing strategists

Each executive leader should also be a professional strategist! In the same way you expect an executive to be able to interpret balance sheets, know something about finance, be able to design organizational structures and processes, have at least a basic knowledge of marketing and branding, each executive leader should also be expected to have the ability to develop and implement professional strategies. These general management competencies should complement each other.

It is important to remember though that the term ‘strategic leaders’ should not be limited to the executive level. There should be ‘strategic leaders’ at each level of an organization. Of course, it is the leadership team’s task to create the general conditions to enable this and their responsibility to ensure that this understanding of leadership becomes part of the organizational culture. But leaders must be present from the top to the bottom.1

The proportion of time spent on strategy work can differ significantly between individuals within a company. A CEO has quite a lot to do concerning strategy, but definitely not as much as, for example, a chief strategy officer who leads an internal strategy department full-time. However, the head of a profit centre, a central function or a national subsidiary also has a strategic accountability function from their operational unit to their line managers. All forms of strategy should be undertaken in a professional way.

There are already, naturally, a great number of tried and tested strategic textbooks, providing guidelines for the implementation of this strategy work. But these are mostly written from an abstract, analytical perspective. They introduce methods or processes to strategically plan, which is certainly important in a strategist’s toolset. This book, however, does not take a process-oriented perspective but rather an actor’s perspective, ie the viewpoint of an executive leader with strategic responsibility.

This kind of perspective can be helpful for a number of reasons. First, this perspective can show concrete areas for personal development, right up to a modern strategic leadership competency. Second, it can assist in creating and owning a portfolio of responsibilities. Third, it can show ways to legitimize strategic work and how the resulting added value can be represented systematically. Fourth, it should be helpful for setting one’s own strategic work in the modern context, which is characterized by great changes and technological alterations, demanding a redesign of strategic leadership work. Last, it also addresses social aspects of successful strategic work, which are of particular importance against the background of strategists being increasingly responsible for implementation. This is meant to reconnect the analytic-rational element of leadership, which dominated strategic discussions over the last few years, with the business and social dimensions of integrative strategic work.

A humanitarian philosophy for strategic decision-makers

Before going deeper into the individual aspects of how such a professionalization of strategists can be achieved, we will first build the normative basis for this book: how do we want to view businesses and their role in society in this book? What is our business philosophy, in terms of what ultimately determines the existence and aspiration of businesses, which should also influence their decision-makers accordingly?

This normative basis not only builds on knowledge, but on experiences gained and earned through business practice. We always viewed the many conversations and debates with leaders of all types as exchanges of equal partners. This, to us, seems to be the only viable form of interaction and connectedness in order to arrive at a shared understanding of the applied social practices, on the one hand, and for our observations, conclusions and recommendations to be listened to and understood.2 A third element of this normative basis is ‘belief’, which we recognize means that there is an idealistic element.

Strategic work in the context of a highly dynamic environment

In today’s business environments, strategists are faced with quite significant, often discontinuous, changes. This may concern new technological developments, geopolitical conflicts, moving centres of power, demographic change, new attitudes in society, increasing inequalities, climate change, or the increasing dependency on the internet. Many of these developments influence each other, thereby increasing the environment’s complexity.

One outcome of this is that these changes have led to a redistribution of resources and wealth. This is illustrated by looking at the most profitable companies in the world, shown in Table 1.1. In 2018, Microsoft, Apple and Alphabet (Google), all from the US, are at the top. Their combined overall value is more than eight times as big as that of the top three in 1990. In 2017, only 22 of the top 100 companies on this list came from Europe. Compare this with 2008, the year of the global financial crash, where this was 41. China is increasingly closing the gap with companies such as Tencent and Alibaba in 2018 being placed at six and nine respectively.

Table 1.1 Three most valuable companies of their time worldwide (market capitalization in US$ billion)

Skip table

1990		2000		29 November 2019
Nippon Telegraph & Telephone	113	General Electric	475	Microsoft	1,158
IBM	65	ExxonMobile	300	Apple	1,189
ExxonMobile	65	Pfizer	290	Alphabet (Google)	903
Total	243		1,065		3,250

Table 1.1 details

A table lists the 3 most valuable companies in terms of market capitalization for the years 1990, 2000, and 2019.

1990		2000		29 November 2019
Nippon Telegraph & Telephone	113	General Electric	475	Microsoft	1,158
IBM	65	ExxonMobile	300	Apple	1,189
ExxonMobile	65	Pfizer	290	Alphabet (Google)	903
Total	243		1,065		3,250

Many companies, as well as whole sectors, have got into difficulties with their traditional business models as a result of these changes. Initially, this affected the media and music sectors, but over time this has expanded and currently affects the banking and energy sectors, and others will surely follow. Due to this, a discourse about disruption has emerged. These developments can present opportunities, but there are also downsides to consider:

• The internet offers many opportunities and by now connectivity is almost as commonplace as electricity. However, this brings with it many significant social and economic challenges. The question arises as to whether we are able to control the effects of exploding connectivity with respect to security.
• New forms of automation and robotization, enabled through progress in artificial intelligence, promise large increases in efficiency. But so far the proof of increased productivity is missing, as instead these processes have brought significant additional costs. Moreover, these new technologies also create exclusion, for example, in the job market for those who lost their jobs to robots and for whom an adaptation of training and professional development, in order to ensure their timely re-education, has not been successfully achieved. But which types of training systems can even do this effectively? And what type of expertise will actually be required in future? Social and emotional intelligence? Creativity? The ability to collaborate and communicate in complex environments? The capacity to think in abstracts and concepts?
• Social media has become a social force as well as a source of power in society. These networks allow us to very simply share our knowledge or even act as a new form of social mobilization in order to solve societal issues. But they also make us lazy, naïve and vulnerable because of their convenience. As an example, consider personal, sensitive data on the internet, which is often revealed thoughtlessly without consideration of who owns the information once it is broadcast or who can make use of it. Social media is also used nefariously to knowingly and effectively share falsehoods or ‘fake news’. Social media raises fundamental questions including: what do these developments mean for social solidarity? Just because an increasing number of people are connected to each other, one cannot conclude that there is also more trust, solidarity and helpfulness. In fact, a lot indicates that the opposite is true at the moment.

And so strategic decision-makers find themselves in a very complex environment, confronted with a multitude of conflicting demands and dependencies, and at the same time, highly volatile and unpredictable developments. Society, and thus the economy as part thereof, is at a turning point. New rules in social interaction are emerging at a local and global level. Strategic decisions have to be made for a newly emerging world order. To some extent strategists are driven by mega trends and it is all about meeting the required adjustments. However, they also have to work out to what extent they can be innovative co-creators of the future at the same time.

In this context strategists have to prove themselves anew. They have to fundamentally rethink the role they wish to play and redefine it. This is about asking if the ‘company philosophy’ w...