Is business strategy relevant today?
The viability of strategy in our dynamic times is a recurring theme among strategists. They've raised important questions. Why develop a business strategy, when technology will quickly render it obsolete? Why not focus on business models instead? They are closer to operations and are first to experience technological disruptions. Strategy in this context is a reactive exercise conducted in hindsight. So - Why do it at all?
My not so simple answer is that strategy is as critical to business success today as it was twenty years ago. The Dot-Com-Bust (late 1999 through 2002) is the best example of what happens during disruptive periods absent strategy. Startups and many established companies spent with little financial or strategic discipline. Other established players remained anchored to the past, like trains on rails. They were stuck in tactical thinking.
Most paid the ultimate price, as reflected in high rates of business failures.
Businesses have long sought new competitive strategies and innovative business models for advantage. Business strategy has been evolving since the days of its iconic pioneer, Bruce Henderson. BCG's cost-centered Experience Curve (1960s), gave way to Michael Porter's Five Forces a decade later. Process reengineering became a rage during the 1990s. In reaction, Tom Peters sought to elevate human contributions as drivers of excellence. W. Chan Kim and Renée Mauborgne introduced Blue Ocean Strategies in 2004.
Digital Strategies are today's answer to recurring waves of technological disruptions. They remain works in progress. Professor David Roger's Digital Transformation Playbook is an excellent contribution to the subject. Columbia's executive class, based on his book, is also a valuable contribution to this emerging field. It helped me appreciate how 'Digital' is globally challenging businesses across industry segments.
Digital paradigms didn't repeal the laws of physics or rendered engineering practices obsolete. They did make it possible for almost anyone to play in virtual sandboxes. It's good to have a larger community of experimenters and innovators. That's not a good reason, however, to repeat the Dot-Com-Boom-and-Bust roller coaster ride. We should know better this time. Do we still need strategy? Yes, we certainly do!