SlideShare una empresa de Scribd logo
1 de 10
Descargar para leer sin conexión
strategy+business



issue 70 SPRING 2013




The Thought Leader
Interview:
Cynthia Montgomery
A Harvard Business School strategy professor observes that leaders
become better strategists by engaging in conversations about
the purpose of a company.
by KEN FAVARO AND ART KLEINER




reprint 00163
thought leader



                 The Thought Leader Interview:
                 Cynthia Montgomery
                 A Harvard Business School strategy professor observes that
                 leaders become better strategists by engaging in conversations
                 about the purpose of a company.

                 by Ken Favaro and Art Kleiner




                                                                                                  herself in the middle of a little-
                                                                                                  known but strongly felt debate that
                                                                                                  has gone on since the early 1980s in
                                                                                                  executive education and similar mi-
                                                                                                  lieus. On one side is the “positioning
                                                                                                  school” of business strategy: Success
                                                                                                  depends on analyzing industry dy-
                                                                                                  namics and competitive advantage,
                                                                                                  and staking out a position that is
                                                                                                  most resistant to competition on the
                                                                                                  basis of industry forces. Montgom-
                                                                                                  ery’s credentials on this side include
                                                                                                  numerous articles in leading eco-
                                                                                                  nomics and management journals,
                                                                                                  and co-editorship with Michael Por-
                                                                                                  ter of the influential anthology
                                                                                                  Strategy: Seeking and Securing Com-
                                                                                                  petitive Advantage (Harvard Busi-
                                                                                                  ness School Press, 1991). On the


                 W
                              hen you look at strategy   education programs at Harvard for        other side is a perspective known
                              as a frame of mind to be   leaders of owner-managed compa-          in academia as the “resource-based
thought leader




                              cultivated, rather than    nies. It is also grounded in her work    view of the firm”: Success depends
                 as a plan to be executed, you are far   with large diversified companies.        on cultivating the capabilities and
                 more likely to succeed over the long    For example, she has served on           assets that no one else can match.
                 run. That is the core premise put       the boards of Newell Rubbermaid,         One of the leading developers of this
                 forth by Cynthia Montgomery, the        UnumProvident, and several mu-           field is Montgomery’s husband,
                                                                                                                                           Photograph by Brad DeCecco




                 Timken Professor of Business Ad-        tual funds, as well as on the board of   MIT Sloan School professor Birger
                 ministration and former chair of the    McLean Hospital, a not-for-profit        Wernerfelt. Montgomery and David
                 strategy unit at Harvard Business       organization based near Boston.          Collis built on the resource school’s
                 School, in her book The Strategist:          Throughout her career, Mont-        insights in “Competing on Resourc-
                 Be the Leader Your Business Needs       gomery, who has also taught busi-        es: Strategy in the 1990s” (Harvard
                 (HarperBusiness, 2012). The book        ness strategy at Northwestern Uni-       Business Review, July–August 1995),
                 is based in part on her work over the   versity’s Kellogg School and the         one of the most reprinted articles in
  1              past five years teaching executive      University of Michigan, has found        the history of HBR.
Montgomery’s new book and           But it’s just one of many things that    they’re talking about their own
her ongoing research into strategists’   the CEO is responsible for. So strat-    companies. They revert to the same
attitudes and actions represent an ef-   egy becomes an area for experts.         old generics that could apply to any
fort to move past the dichotomy,         The company draws on specialists to      company: “We will succeed because
and to focus on what it means for a      help with external analysis, to do a     we’re the quality leaders, we’re best
leader to be a strategist. To Mont-      deep dive on competitors, and to         in class, we have the lowest costs,”
gomery, a business strategist is not     look at trends around the world.         and so on.
primarily an analyst of position, or          All of that may indeed provide
of resources; nor is the strategist      incredible added value. It’s certainly   S+B: The same old “blah, blah, blah.”
purely adaptive, responding reac-        helpful in setting the stage. But un-    MONTGOMERY: Exactly. For many
tively to the vagaries of fate. He or    derlying all this activity is a funda-   leaders, there’s an immense gap be-
she is someone who engages in a          mental question that any company’s       tween intellectually understanding
conversation about the purpose of a      leader must ultimately answer:           the theory of strategy and being able
company. The company rises or falls      What will this firm be, and why will     to apply it in their own businesses.
on the quality of that conversation      it matter? This is not a soft, philo-    It’s only by directly engaging in
and the way it is used to make deci-     sophical question. It is a hard-nosed,   strategy themselves that most lead-
sions about the ongoing work of the      economic one. As my former col-          ers internalize the important ques-
enterprise.                              league Adam Brandenburger puts it,       tions and get a clear sense of what’s
     To get a clearer view of that       “Why would the world need this           involved—the trade-offs, choices,
approach, and what it might mean         business? What would be different if     commitments, and actions—in
for senior executives, we sat down       it didn’t exist?”                        bringing a strategy to life. In work-
with Cynthia Montgomery in her                And a leader can’t consider the     ing with these executives in class,
office at Harvard Business School in     question just once and be done with      my goal is to help them confront the
November 2012. (She subsequently         it. That question needs a compelling     gap between the high standards
obtained permission to publish the       answer every day of a firm’s exis-       they’re developing for others’ strate-
anecdotes in which students are          tence, an answer that’s relevant as      gies, and the often considerably less
named.) This interview provides a        the business evolves, and as markets     rich reality of their own.
glimpse of the direction that we         and customers evolve. To enable that
think many business schools will         kind of continuous evolution, strat-     S+B: How do you try to accomplish
take in the years ahead: combining       egy should never be thought of as a      this in the programs you teach?
the positioning and resource views,      problem that’s been solved and set-      MONTGOMERY: I’ve taught some
the entrepreneurship and manage-         tled. There are occasional dramatic      courses with 180 owner–managers
ment roles, and the strategy and         changes, but mostly it’s an evolu-       coming to campus for three, three-
execution imperatives into a single      tionary process, with the CEO at         week sessions, spaced a year apart.
discipline that could be described as    the center.                              When they enter the program’s third
“identifying and realizing the pur-           In some executive courses, I ask    session, they work on their own
                                                                                                                             thought leader
pose of your organization.”              students to describe the strategy for    strategies. First they write up a stra-
                                         their companies. Many of them start      tegic plan on their own, with input
S+B: You’ve written that a leader        out thinking that the goal is to have    from their teams back home, then
who wholeheartedly embraces a            a product, get it all down in writing,   they share their work with one an-
strategic perspective is not the same    and they’re done. But the process        other. That’s when things get really
as a conventional manager. Why not?      doesn’t end there. We bring the          serious.
MONTGOMERY: Think about who              strategies up for critique, and they          We usually divide the group
does strategy in most large compa-       have to defend them. It’s always sur-    into cohorts of eight to 10 people.
nies and where the strategist typi-      prising to see how the same individ-     Each person presents his or her strat-
cally resides in an organization. It’s   uals who are good on their feet and      egy to the cohort, and then each co-
not the CEO; it’s a specialist func-     have brilliant things to say when        hort selects one strategy to present to
tion. Of course, everybody says that     talking about a case study like Nike     the full class. I ask them to select the
strategy is the CEO’s responsibility.    or General Electric falter when          one that makes the most use of the           2
Ken Favaro                       Art Kleiner
                 ken.favaro@booz.com              kleiner_art@
                 is a contributing editor to      strategy-business.com
                 strategy+business and a senior   is editor-in-chief of
                 partner with Booz & Company.     strategy+business.
                 Based in New York, he leads
                 the firm’s work in enterprise
                 strategy and finance.




                 principles we’ve talked about togeth-      you doing that’s really distinctive?”     document, or an occasional exercise.
                 er. We end up with about 20 strate-        Sometimes he’d put it as I did in         It should be a way of looking at the
                 gies presented to the full class, 10       class: “Help me understand why            world, interpreting experience, and
                 each in two long sessions. Each strat-     your business really matters.” And        thinking about what a company is
                 egy is critiqued by another group,         he kept after them until they gave a      and why it matters. The formal stra-
                 and then discussed openly by the           thorough answer. By the end of            tegic planning process is only part of
                 whole class. The sessions go on for        those sessions, everybody had inter-      it; the deeper responsibility is ongo-
                 hours. The people in the room typi-        nalized those questions. I came to        ing and continuous. I often refer to a
                 cally have very helpful things to say,     feel that this process was the heart of   quote from the great 19th-century
                 so much so that we now give an             a strategic conversation. A leader        Prussian military strategist Helmuth
                 award for the best critique, along         builds a strategy through in-depth        von Moltke: “Certainly the com-
                 with an award for the best strategy        conversations with a group of his or      mander in chief will keep his great
                 presentation.                              her peers, testing the ideas against a    objective continuously in mind, un-
                      The tone for the critiques was        variety of situations. Knowing how        disturbed by the vicissitudes of
                 set several years ago by Jack, an ex-      to do that well will serve the gradu-     events. But the path on which he
                 ecutive from Venezuela. Between            ates better as leaders than any par-      hopes to reach it can never be firmly
                 the second and third year of the           ticular plan they develop at Harvard      established in advance. Throughout
                 program, as pressures from Hugo            Business School.                          the campaign he must make a series
                 Chavez’s government increased,                                                       of decisions on the basis of situations
                 Jack’s business suffered; it lacked a      S+B: Are you saying that in a well-       that cannot be foreseen…. Every-
                 clear growth path. He came back for        run company, the CEO should have a        thing depends on penetrating the
thought leader




                 the third year anyway, and as he           group of senior executives who play       uncertainty of veiled situations to
                 dealt with his own challenges, he be-      the same questioning role?                evaluate the facts, to clarify the un-
                 came a major presence in the class.        MONTGOMERY: That’s right. And             known, to make decisions rapidly,
                      Jack was a regular at the pre-        yet that’s not the way it works in        and then to carry them out with
                 class lounge sessions, which often         many companies today; business            strength and constancy.”
                 went on well past midnight. Stu-           heads make presentations, but often             That’s the job of a business
                 dents came there to test out their         they’re choreographed ahead of            strategist, no less than a military
                 strategies with me and whoever else        time, and they often don’t question       commander, and it’s a challenging
                                                                                                                                                strategy+business issue 70




                 was interested, and often 30 or 40         their peers as much as they could.        balancing act—an ongoing, not a
                 people would show up.                      I’d like to see the managers at all       periodic, responsibility. Unfortu-
                      Jack took the seat next to mine,      those meetings raise the game by          nately, that’s not the way strategy is
                 night after night. He asked each pre-      challenging one another.                  generally taught in business schools,
  3              senter the same question: “What are             A strategy shouldn’t be only a       and it hasn’t been for a long time.
The Capstone Course                     change their approach to strategy in       have a course called General Man-
                                        the early 1980s after Michael Porter       agement. Nor do most other busi-
S+B: How has the teaching of strat-     introduced the idea of competitive         ness schools. Many students have
egy changed?                            analysis. His course material on the       come to view entrepreneurial man-
MONTGOMERY: Back when I was an          subject was wildly popular because         agement courses as the capstone ex-
MBA student in the 1970s, strategy      he brought economic rigor to the           perience of the MBA curriculum,
at most schools was taught as part      analysis of strategy. On its own, that     where you learn about defining busi-
of a course called Business Policy      was absolutely good. It transformed        nesses, moving them through
and General Management. It was          the era. My own work followed in           growth, changing course, and doing
thought of as the capstone course; it   that wake. Using large-sample statis-      it again. But entrepreneurship cours-
came last in the sequence, after mar-   tical analysis, I examined the rela-       es don’t teach people how to run a
keting, finance, production, and or-    tionship between the overall profit-       large company; they teach them how
ganizational behavior. Having seen      ability of a corporate enterprise and      to create and finance a startup. If we
                                                                                   care about improving the quality of
                                                                                   large-enterprise strategy, we manage-
“A strategy should be a way of looking                                             ment academics have to avoid hoist-
                                                                                   ing ourselves on our own petard.
at the world, interpreting experience,
and thinking about what a company is                                               S+B: Hasn’t the specialized, analytic
                                                                                   approach to strategy lost some of its
and why it matters.”                                                               value in recent years?
                                                                                   MONTGOMERY: Yes. It started to
                                                                                   level off in the early 2000s. I saw
all the pieces, the student was sup-    the average profitability of the in-       that recently when, as part of my
posed to put them together. The         dustries in which it competed.             work on The Strategist, I talked with
course combined thinking and do-             But over time, the economics          several speakers bureaus, thinking
ing, strategy formulation and strate-   began to distract people from the          the subject of strategy would be hot.
gy execution. The main textbook,        leadership aspect of strategy. Before      But instead, they said they would
Business Policy: Texts and Cases, was   long, strategy at many top business        market me as a speaker on innova-
written by legends in the field: C.     schools was taught by economists           tion or change management. Their
                                                                                                                            thought leader
Roland Christensen, Joseph Bower,       focused on theory and analytics. If        interest in my book came not from
and Kenneth Andrews [Irwin, 1965,       you do this, how will your competi-        the topic of strategy per se, but from
rev’d. 1982]. The very first chapter    tors respond? How do the structural        its focus on what strategy means for
was called “The Presidential Point of   characteristics of an industry shape       business leaders.
View.” Another major section was        competitive behavior? All important              The discussions helped me
called “The Accomplishment of           issues, to be sure, but gradually strat-   come to terms with how much strat-
Purpose.” To this day, I tell the ex-   egy became an exercise in getting          egy had lost its vitality—its edgi-
ecutives I work with, “If someone       the analysis right, providing the an-      ness—and the tremendous opportu-
asks you what you do for a living,      swer, and letting someone else im-         nity we have to embrace it in a new
just look them in the eye and say,      plement it. That reinforced the idea       way. I think other academics are be-
‘I’m an architect of organizational     that strategists were a group with         ginning to see the same potential.
purpose.’”                              specialized training.                      For instance, at a strategy confer-
     Many business schools began to          Today, Harvard doesn’t even           ence in celebration of the Harvard         4
Business School centennial, our           S+B: What does strategy work look          the company. Ikea’s system of ad-
                 theme was “putting leadership back        like when it is action-oriented?           vantage, built around that idea, is
                 into strategy.”                           MONTGOMERY: Let’s say you’re a             one of the company’s most impor-
                                                           business leader, and you have an idea      tant resources. Anders Dahlvig, for-
                 S+B: When did you realize the limits      for your business. That’s just the be-     mer group president, put it this way:
                 of the analytic approach yourself?        ginning. You have to articulate it,        “Many competitors could try to
                 MONTGOMERY: A lot of it came              choose to invest in it, and create the     copy one or two of these things. The
                 through executive education, work-        organizational context where people        difficulty is when you try to create
                 ing with managers who had an op-          can bring it [to life]. That means         the totality of what we have.” For in-
                 portunity to use strategy to make a       building a system of advantage—a           stance, copying the low prices would
                 powerful difference in their compa-       business model tailored to that pur-       not work without copying their ap-
                 nies. In countless late-night conver-     pose, where the pieces work in sync,       proach to sourcing, their flat-pack
                 sations, I learned a lot about the        and where the whole is more than           distribution concept, the way they
                 challenges they faced and their aspi-     the sum of the parts. Done well, it        design their stores and catalogs, and
                 rations, and I saw what happened to
                 companies where no one stepped up.
                 The existentialist philosopher Jean-      “Creativity isn’t considered very
                 Paul Sartre wrote about the “courage
                 to choose,” and understood that           important in the culture that has
                 choosing isn’t just an intellectual
                 thing; it takes guts.
                                                           grown up around strategy. That
                      Strategy books don’t talk about      has to change.”
                 that. They also rarely talk about
                 how to get others involved, or how
                 to serve as a champion of the pro-        turns a concept into an animating          their Scandinavian furniture de-
                 cess. Thomas Saporito, the coauthor       idea: A clear view of what your com-       sign—“which is not easy,” he says,
                 of Inside CEO Succession: The Essen-      pany will bring to the world, why it       “without a Scandinavian heritage.”
                 tial Guide to Leadership Transition       will matter, and how you will do it.
                 [Wiley, 2012], has written about          A lot of those hows will be deter-         S+B: Ikea has essentially one busi-
                 CEOs who fail because they know           mined by others throughout the or-         ness. Can a multi-business, diversi-
thought leader




                 their strategy is correct, and they as-   ganization, but that can’t happen          fied company also be built around an
                 sume that’s enough to overcome any        unless there’s clarity at the core.        animating idea?
                 lack of buy-in. He reminds them                 Look at a business like Ikea,        MONTGOMERY: Certainly. One of
                 that “executives don’t get paid to be     which I wrote about in The Strate-         my favorite examples comes from
                 right. They get paid to be effective.”    gist. The founder, Ingvar Kamprad,         Apple. In 2001, when Steve Jobs had
                      In working with leaders, I also      stated his animating idea back in the      only been back at the company for a
                 realized how vitally important cre-       1940s. They would offer a line of          couple of years as CEO, he gave a
                 ativity is in strategy. It takes the      practical, well-designed furnishings       presentation at the Macworld Expo
                                                                                                                                               strategy+business issue 70




                 whole brain—intuition and analytic        at prices so low everyone could af-        in which he talked about the three
                 skills—to do it well. But creativity      ford them. When you walk into an           ages of the PC. First came the age of
                 isn’t considered very important in        Ikea store, every detail goes back to      productivity, then came the age of
                 the culture that has grown up             that idea. It’s not in a document on a     the Internet, and now would be the
  5              around strategy. That has to change.      desk; it’s the energy that gives life to   age of the digital hub. He talked
about MP3 players, cell phones, and       you dive into that story, you can see      not a matter of immaculate concep-
digital cameras, which at the time        that his victories were hard won. I’m      tion, where you get a single answer
accounted for only 15 percent of all      trying to get people excited about         and forever rule out other options.
camera sales, but, “in a couple of        being strategists and to see why it’s a    As a business, you operate in a com-
years,” he said, “it will be 50 per-      distinctive way that they as leaders       plex system of other companies in
cent.” Going forward, Apple would         can add value to their businesses.         which any advantage is fragile. Even
add value to a host of digital devices,   I’m also trying to help them under-        Steve Jobs embellished and subtract-
and be the company whose comput-          stand that strategy is far more than       ed as time went on. You need to
ers would tie them all together.          an idea. There’s a conundrum you           think about your strategy as an
     Some people argue that a strat-      sometimes hear in business school:         open, living thing. You start out by
egy is understood only in hindsight,      “Would you rather have a brilliant,        defining who you are as a company.
retrospectively trying to make sense      fully worked-out strategy and poor         But then you try it out, and discover
of a group of haphazard, reactive         execution, or a half-baked strategy        that it’s not working so well, so you
moves. But here’s a case where, when      well executed?” The point is sup-          adjust it.
the stock price was still very low,       posed to be that good execution is              For example, we teach David
Steve Jobs laid out his animating         preferable every time. At least it gets    Yoffie’s case on the Gucci Group.
idea in public, in advance. When          you some results. But, at root, it’s a     The company hit the skids in the
Apple came out with iTunes, the           vacuous question. How can you im-          1980s, when counterfeit products
iPod, and the Apple Store, it all         plement the hell out of something if       and an undisciplined licensing strat-
made sense in light of that idea.         you don’t know what you’re trying          egy nearly destroyed the brand.
                                          to accomplish?                             Maurizio Gucci, grandson of the
                                                                                                                             thought leader
                                                                                                                             thought leader
S+B: In The Strategist you write that            I can understand that you           founder, stepped in and tried to re-
people respond to this story by say-      might be tempted to favor execution        position the company, but custom-
ing, “Sure, but I’m not a genius like     because you don’t really know if           ers balked and were slow to come
Steve Jobs.” Does a good strategist       your strategy will succeed. If your        back. A new CEO, Domenico De
have to be a genius?                      strategy says you should take dra-         Sole, was hired in 1993 to pick up
MONTGOMERY: Jobs is widely                matic, disruptive risks, do you really     the pieces. De Sole forged a new
praised as a genius today, but one of     dare to stand with it and keep sup-        purpose built around providing
the things I appreciate most about        porting it? But frankly, a lot of busi-    fashion-forward clothing at good
him is his failures—the Lisa com-         nesses face more pedestrian choices,       value, and rebuilt every activity in
puter at Apple and the ego-busting        with much less risk—and they’re            the company to align with it. Did
demise at NeXT, the startup Jobs          still not living deliberately, and are     Gucci survive? Yes. Did it thrive?
founded when he was ousted from           still flying by the seat of their pants.   Yes. But it was a different company
an operating role at Apple. When                 More importantly, strategy is       than it had been in its former hey-       6
day, a company that mattered for a
                 different reason.
                      Similarly, when Ingvar Kam-
                 prad started out, he was forced to
                 leave Sweden. The existing Swedish
                 retailers didn’t like his low prices
                 and put pressure on local manufac-        what’s being done, but why. He or           develop the search criteria for an in-
                 turers to refuse to supply him. In        she understands that the quality of         coming chief executive, and I always
                 fear that he’d lose the whole busi-       execution begins there. No matter           underscore the need to marry the
                 ness, he went to Poland in search of      how successful an operator or execu-        ability to conceptualize with the
                 new suppliers; their prices proved to     tor you are, no matter how good             ability to translate those concepts
                 make not just a difference in degree,     your product innovation or manu-            into action. Generally, I’d look for
                 but a difference in kind. In other        facturing processes are, if your com-       people who have transformed a busi-
                 words, this wasn’t just an incremen-      pany doesn’t have a meaningful dis-         ness—redefined what it was and
                 tal shift in one factor—it led Ikea       tinction, you won’t be effective; and       why it mattered, rebuilt the business
                 into a completely different business      if you can’t move it forward, your          model, and delivered. To lead, you
                 model. Kamprad’s strategy devel-          company will stagnate.                      need to be able to do more than just
                 oped because he was open to rede-               You learn those skills over time.     clean up operations or coast on an
                 fining the business.                      Robert Katz, who wrote a classic ar-        existing path.
                                                           ticle called “Skills of an Effective             And I’ve worked with enough
                 S+B: So the point of a strategy is        Administrator” [Harvard Business            CEOs to know that they need to be
                 to keep improving your animating          Review, September 1974], said that          able to make meaning for an organi-
                 idea, and to keep building your own       when you start your career, to suc-         zation, to connect the efforts of ev-
                 capacity to develop and execute it.       ceed, you need a functional skill:          eryone in it with a purpose that really
                 MONTGOMERY: Yes, usually that’s           For example, you need to be good at         matters to some set of customers.
                 true. Isn’t that preferable to the di-    accounting, engineering, or HR. At
                 chotomy we’ve been talking about,         the next level up, you need to be           S+B: What is the future of strategy
                 between conception and execution?         good with people. And at the very           education?
                 Isn’t it better than being just the       top, you need conceptual skills.            MONTGOMERY: Thinking about the
                 caretaker of a plan? Isn’t it a much      Years later, someone asked him if he        cultural connections among busi-
                 better insight to pass on to the other    still agreed with that statement, and       ness leaders as an ecosystem, we
                 managers in your company, who             he said he was even more fervent            want to create an atmosphere where
                 could be developing their strategic       about it now. But he thought that           a new type of conversation can be
                 perspective along with you?               people either had those skills by the       held—not just in a university class
                      One must also acknowledge,           time they were teenagers, or they           or in a management consulting firm
                 though, that sometimes the animat-        would never have them.                      engagement, but among leaders in
thought leader




                 ing idea itself has run its course and          I don’t agree with that part of it.   general. We want to set up the kind
                 more radical action is necessary. The     I think those skills can be developed       of conversation that opens the win-
                 question remains the same: Why            later in life. But I do agree that such     dow to new strategic possibilities
                 does the world need this company?         skills are the key to becoming an ar-       and allows people to move a com-
                                                           chitect—or, better yet, a steward—          pany in a new direction.
                 The Education of a Strategist             of organizational purpose. As it hap-            One of our students, Yegs Ra-
                                                           pens, I’ve been at the boardroom            miah, is an executive at Santam, the
                 S+B: If you could spend time with a       table with Bob Katz, and he has in-         largest short-term insurance compa-
                                                                                                                                                 strategy+business issue 70




                 group of prospective chief execu-         credible conceptual skills himself.         ny in South Africa. Santam operates
                 tives, could you tell the strategists     But he also understands that they           in a category where there is little
                 from the caretakers?                      create value only when they’re inti-        differentiation, with high levels of
                 MONTGOMERY: Yes. A leader who is          mately linked to action.                    commoditization, rampant price
  7              a strategist has clarity not only about         I am sometimes asked to help          competition, and a race to the bot-
tom that has been threatening the         series of ads. In one of them, he         nesburg Children’s Home.
profitability of the industry. More-      stands in a restaurant, with a bar-            Santam’s challenge to Nando’s
over, Santam had been in the game         tender behind him mixing drinks,          took South Africa by storm. The ad
for 95 years; it was perceived as old-    moving in and out of the frame. He        got more than 250,000 hits on You-
school, conservative, and expensive,      reminds the audience how easy it is       Tube, and Santam’s name is now
mainly serving the country’s older        to wear blinders and overlook things      everywhere, as an example of a com-
white population. To ensure future        that are right in front of you. If you    pany that is humane, progressive,
success, Santam had to tap into           go for the cheapest home insurance,       contemporary, and accessible to a
                                                                                    growing group of customers. The
                                                                                    campaign reinvented the brand and,
“Nobody could beat Ford at his own                                                  with that, the business.
                                                                                         That’s strategy. It’s not unlike
game, but Sloan reinvented the auto                                                 what Steve Jobs did for Apple, or
company. A really good strategy                                                     what Alfred Sloan did for General
                                                                                    Motors when he first went up against
revitalizes the company.”                                                           Henry Ford. Nobody could beat
                                                                                    Ford at his own game, but Sloan re-
                                                                                    invented the auto company. A really
the growth market—it had to ap-           you might miss an important detail.       good strategy doesn’t happen on the
peal to people of all races and ages      “What if I told you,” he concludes,       margin; it doesn’t simply perpetuate
and extend its reach into the grow-       “that Floyd’s uniform has changed         an industry game that is mature and
ing middle class.                         four times while I’ve been talking?”      may be decaying.
     Yegs led a process to redefine       The ad caught on, and people want-             A really good strategy revitaliz-
the brand positioning and the per-        ed to watch it carefully to see where     es the company, and to do that, you
sonality, refresh the logo and the        the bartender’s outfit changed. It        need to assemble a group of people
visual identity, and develop an           won several accolades, including a        who have the courage to confront
integrated communication and mar-         Silver Clio award as well as a Bronze     business at its roots. You need people
keting campaign. She realized that        Lion in Cannes.                           who can say, in effect, “Strategy is
in order to challenge accepted                  Nando’s, a large South African      dead. But long live strategy.” +
norms, Santam would have to rede-         fast-food chain renowned for their                               Reprint No. 00163

                                                                                                                               thought leader
                                                                                                                               thought leader
fine the short-term insurance cate-       satirical advertising, then parodied
gory. She looked for ways to change       the ad with one of their own, steal-
the conversation about insurance          ing the concept. Instead of ignoring
from its being trivial and dispens-       it, or threatening to sue, Yegs got the
able, cheap, and a little bit nasty, to   same agency to create a response.
its being important and meaningful,       “Under normal circumstances we’d
with enduring value and substance.        be upset, but frankly we’re flattered,”
This meant inspiring South Afri-          said a Kingsley-like narrator in the
cans to take the issues of managing       new ad. Then he made a demand:
risk and preparing for their future       Santam would “overlook the indis-
more seriously.                           cretion” if Nando’s delivered a pack-
     Yegs hired Oscar-winning actor       age of food—a list of dishes from
Sir Ben Kingsley to narrate a new         the Nando’s menu—to the Johan-                                                         8
strategy+business magazine
is published by Booz & Company Inc.
To subscribe, visit strategy-business.com
or call 1-855-869-4862.

For more information about Booz & Company,
visit booz.com



• strategy-business.com
• facebook.com/strategybusiness
• http://twitter.com/stratandbiz
101 Park Ave., 18th Floor, New York, NY 10178




© 2013 Booz & Company Inc.

Más contenido relacionado

La actualidad más candente

Role reward congruence for enhancing marketing executives team efficiency in ...
Role reward congruence for enhancing marketing executives team efficiency in ...Role reward congruence for enhancing marketing executives team efficiency in ...
Role reward congruence for enhancing marketing executives team efficiency in ...Alexander Decker
 
KLB4114
KLB4114 KLB4114
KLB4114 KLIBEL
 
Transformational vs transactional leadership with examples
Transformational vs transactional leadership with examplesTransformational vs transactional leadership with examples
Transformational vs transactional leadership with examplesMoses Kabeyi
 
Chapter12
Chapter12Chapter12
Chapter12abahtab
 
Saving Struggling Quality Teams(2)
Saving Struggling Quality Teams(2)Saving Struggling Quality Teams(2)
Saving Struggling Quality Teams(2)ahmad bassiouny
 
Session 14, Jarventie-Thesleff
Session 14, Jarventie-ThesleffSession 14, Jarventie-Thesleff
Session 14, Jarventie-Thesleffcsrcomm
 
Collaborative management
Collaborative management Collaborative management
Collaborative management Gautam Kumar
 
45182983 lecture-notes-conflict-mgt-2
45182983 lecture-notes-conflict-mgt-245182983 lecture-notes-conflict-mgt-2
45182983 lecture-notes-conflict-mgt-2Ogunsina Olabode
 
Cause of conflict
Cause of conflictCause of conflict
Cause of conflictpascastpt
 
Suggested adaptive leadership principles in marketing environment
Suggested adaptive leadership principles in marketing environmentSuggested adaptive leadership principles in marketing environment
Suggested adaptive leadership principles in marketing environmentAlexander Decker
 
Human Resource Management Vs. Industrial/Employee Relations
Human Resource Management Vs. Industrial/Employee RelationsHuman Resource Management Vs. Industrial/Employee Relations
Human Resource Management Vs. Industrial/Employee RelationsLeah Williams
 
Sales force competence its nature, need, and dimensions in selling contexts f...
Sales force competence its nature, need, and dimensions in selling contexts f...Sales force competence its nature, need, and dimensions in selling contexts f...
Sales force competence its nature, need, and dimensions in selling contexts f...Alexander Decker
 
SM Project Guidelines - Part One
SM Project Guidelines - Part OneSM Project Guidelines - Part One
SM Project Guidelines - Part OneStratMgt Advisor
 

La actualidad más candente (16)

Role reward congruence for enhancing marketing executives team efficiency in ...
Role reward congruence for enhancing marketing executives team efficiency in ...Role reward congruence for enhancing marketing executives team efficiency in ...
Role reward congruence for enhancing marketing executives team efficiency in ...
 
KLB4114
KLB4114 KLB4114
KLB4114
 
Transformational vs transactional leadership with examples
Transformational vs transactional leadership with examplesTransformational vs transactional leadership with examples
Transformational vs transactional leadership with examples
 
Chapter12
Chapter12Chapter12
Chapter12
 
Saving Struggling Quality Teams(2)
Saving Struggling Quality Teams(2)Saving Struggling Quality Teams(2)
Saving Struggling Quality Teams(2)
 
Session 14, Jarventie-Thesleff
Session 14, Jarventie-ThesleffSession 14, Jarventie-Thesleff
Session 14, Jarventie-Thesleff
 
Ch14
Ch14Ch14
Ch14
 
Collaborative management
Collaborative management Collaborative management
Collaborative management
 
45182983 lecture-notes-conflict-mgt-2
45182983 lecture-notes-conflict-mgt-245182983 lecture-notes-conflict-mgt-2
45182983 lecture-notes-conflict-mgt-2
 
Cause of conflict
Cause of conflictCause of conflict
Cause of conflict
 
Suggested adaptive leadership principles in marketing environment
Suggested adaptive leadership principles in marketing environmentSuggested adaptive leadership principles in marketing environment
Suggested adaptive leadership principles in marketing environment
 
Human Resource Management Vs. Industrial/Employee Relations
Human Resource Management Vs. Industrial/Employee RelationsHuman Resource Management Vs. Industrial/Employee Relations
Human Resource Management Vs. Industrial/Employee Relations
 
Sales force competence its nature, need, and dimensions in selling contexts f...
Sales force competence its nature, need, and dimensions in selling contexts f...Sales force competence its nature, need, and dimensions in selling contexts f...
Sales force competence its nature, need, and dimensions in selling contexts f...
 
SM Project Guidelines - Part One
SM Project Guidelines - Part OneSM Project Guidelines - Part One
SM Project Guidelines - Part One
 
Techni~1
Techni~1Techni~1
Techni~1
 
LS 603 Chapter 12 - Conflict
LS 603 Chapter 12 - ConflictLS 603 Chapter 12 - Conflict
LS 603 Chapter 12 - Conflict
 

Similar a The Thought Leader Interview: Cynthia Montgomery

Increasing global competitiveness_hr
Increasing global competitiveness_hrIncreasing global competitiveness_hr
Increasing global competitiveness_hrJuli Bennette
 
Increasing global competitiveness_hr
Increasing global competitiveness_hrIncreasing global competitiveness_hr
Increasing global competitiveness_hrJuli Bennette
 
Institutionalization and change
Institutionalization and changeInstitutionalization and change
Institutionalization and changeRenni Rengganis
 
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docxTHE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docxsarah98765
 
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docxTHE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docxarnoldmeredith47041
 
What is Strategic Management.pdf
What is Strategic Management.pdfWhat is Strategic Management.pdf
What is Strategic Management.pdfValerieBez
 
Chapters 26-27ERM and Risk Mini-Case Studies – Part 1.docx
Chapters 26-27ERM and Risk Mini-Case Studies – Part 1.docxChapters 26-27ERM and Risk Mini-Case Studies – Part 1.docx
Chapters 26-27ERM and Risk Mini-Case Studies – Part 1.docxspoonerneddy
 
Boards that lead
Boards that leadBoards that lead
Boards that leadGMR Group
 
The new economics of organization
The new economics of organizationThe new economics of organization
The new economics of organizationaseidle
 
Strategic Leadership And Management Strategies
Strategic Leadership And Management StrategiesStrategic Leadership And Management Strategies
Strategic Leadership And Management StrategiesDotha Keller
 
Unit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docx
Unit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docxUnit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docx
Unit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docxwillcoxjanay
 
Ethics the-progressive-development-of-corporate-leadership
Ethics the-progressive-development-of-corporate-leadershipEthics the-progressive-development-of-corporate-leadership
Ethics the-progressive-development-of-corporate-leadershipIjcem Journal
 
15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri Chaita15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri ChaitaAnastaciaShadelb
 
15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri Chaita15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri ChaitaKiyokoSlagleis
 
10 Principles of Change Management
10 Principles of Change Management10 Principles of Change Management
10 Principles of Change ManagementBIJ MISHRA
 
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...IJASRD Journal
 
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docxoswald1horne84988
 
Open challenges for the (mutual/cooperative) insurance sector
Open challenges for the (mutual/cooperative) insurance sectorOpen challenges for the (mutual/cooperative) insurance sector
Open challenges for the (mutual/cooperative) insurance sectorJaime Urcelay
 

Similar a The Thought Leader Interview: Cynthia Montgomery (20)

Increasing global competitiveness_hr
Increasing global competitiveness_hrIncreasing global competitiveness_hr
Increasing global competitiveness_hr
 
Increasing global competitiveness_hr
Increasing global competitiveness_hrIncreasing global competitiveness_hr
Increasing global competitiveness_hr
 
Institutionalization and change
Institutionalization and changeInstitutionalization and change
Institutionalization and change
 
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docxTHE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
 
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docxTHE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
THE STRATEGISTBE THE LEADER YOUR BUSINESS NEEDSCynth.docx
 
What is Strategic Management.pdf
What is Strategic Management.pdfWhat is Strategic Management.pdf
What is Strategic Management.pdf
 
Chapters 26-27ERM and Risk Mini-Case Studies – Part 1.docx
Chapters 26-27ERM and Risk Mini-Case Studies – Part 1.docxChapters 26-27ERM and Risk Mini-Case Studies – Part 1.docx
Chapters 26-27ERM and Risk Mini-Case Studies – Part 1.docx
 
Boards that lead
Boards that leadBoards that lead
Boards that lead
 
The new economics of organization
The new economics of organizationThe new economics of organization
The new economics of organization
 
Strategic Leadership And Management Strategies
Strategic Leadership And Management StrategiesStrategic Leadership And Management Strategies
Strategic Leadership And Management Strategies
 
Unit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docx
Unit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docxUnit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docx
Unit 1 Module 1 - Virtues and Drawbacks of Organized Activity.docx
 
Ethics the-progressive-development-of-corporate-leadership
Ethics the-progressive-development-of-corporate-leadershipEthics the-progressive-development-of-corporate-leadership
Ethics the-progressive-development-of-corporate-leadership
 
Article 1
Article 1Article 1
Article 1
 
15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri Chaita15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri Chaita
 
15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri Chaita15Reflection and Discussion Forum Week 3Sri Chaita
15Reflection and Discussion Forum Week 3Sri Chaita
 
A view from the top. Corporate communication from the perspective of senior e...
A view from the top. Corporate communication from the perspective of senior e...A view from the top. Corporate communication from the perspective of senior e...
A view from the top. Corporate communication from the perspective of senior e...
 
10 Principles of Change Management
10 Principles of Change Management10 Principles of Change Management
10 Principles of Change Management
 
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...
Behavioral Approach to Leadership Boundary Spanning Transaction Relationship ...
 
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx
• • Academy ol Managemenf Executive. 2001. Vol 15. NoCreat.docx
 
Open challenges for the (mutual/cooperative) insurance sector
Open challenges for the (mutual/cooperative) insurance sectorOpen challenges for the (mutual/cooperative) insurance sector
Open challenges for the (mutual/cooperative) insurance sector
 

Más de Strategy&, a member of the PwC network

Más de Strategy&, a member of the PwC network (20)

The seven stages of strategic leadership
The seven stages of strategic leadershipThe seven stages of strategic leadership
The seven stages of strategic leadership
 
Organizational effectiveness goes digital
Organizational effectiveness goes digital  Organizational effectiveness goes digital
Organizational effectiveness goes digital
 
Winning with a data-driven strategy
Winning with a data-driven strategyWinning with a data-driven strategy
Winning with a data-driven strategy
 
Automating trust with new technologies
Automating trust with new technologiesAutomating trust with new technologies
Automating trust with new technologies
 
Facing up to the automotive innovation dilemma
Facing up to  the automotive  innovation dilemmaFacing up to  the automotive  innovation dilemma
Facing up to the automotive innovation dilemma
 
The Four X Factors of Exceptional Leaders
The Four X Factors of Exceptional LeadersThe Four X Factors of Exceptional Leaders
The Four X Factors of Exceptional Leaders
 
What is fair when it comes to AI bias?
What is fair when it comes to AI bias?What is fair when it comes to AI bias?
What is fair when it comes to AI bias?
 
Chinese cars go global
Chinese cars go globalChinese cars go global
Chinese cars go global
 
Power strategies
Power strategiesPower strategies
Power strategies
 
Tomorrow's Data Heros
Tomorrow's Data HerosTomorrow's Data Heros
Tomorrow's Data Heros
 
Is AI the Next Frontier for National Competitive Advantage?
Is AI the Next Frontier for National Competitive Advantage?Is AI the Next Frontier for National Competitive Advantage?
Is AI the Next Frontier for National Competitive Advantage?
 
Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?
Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?
Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?
 
Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?
Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?
Memo to the CEO: Is Your Chief Strategy Officer Set Up for Success?
 
HQ 2.0: The Next-Generation Corporate Center
HQ 2.0: The Next-Generation Corporate CenterHQ 2.0: The Next-Generation Corporate Center
HQ 2.0: The Next-Generation Corporate Center
 
Keeping Cool under Pressure
Keeping Cool under PressureKeeping Cool under Pressure
Keeping Cool under Pressure
 
The Flywheel Philosophy
The Flywheel PhilosophyThe Flywheel Philosophy
The Flywheel Philosophy
 
Leading a Bionic Transformation
Leading a Bionic TransformationLeading a Bionic Transformation
Leading a Bionic Transformation
 
Why Is It So Hard to Trust a Blockchain?
Why Is It So Hard to Trust a Blockchain?Why Is It So Hard to Trust a Blockchain?
Why Is It So Hard to Trust a Blockchain?
 
The Future of Artificial Intelligence Depends on Trust
The Future of Artificial Intelligence Depends on TrustThe Future of Artificial Intelligence Depends on Trust
The Future of Artificial Intelligence Depends on Trust
 
Approaching Diversity with the Brain in Mind
Approaching Diversity with the Brain in MindApproaching Diversity with the Brain in Mind
Approaching Diversity with the Brain in Mind
 

Último

8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCRashishs7044
 
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdfNewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdfKhaled Al Awadi
 
PSCC - Capability Statement Presentation
PSCC - Capability Statement PresentationPSCC - Capability Statement Presentation
PSCC - Capability Statement PresentationAnamaria Contreras
 
Flow Your Strategy at Flight Levels Day 2024
Flow Your Strategy at Flight Levels Day 2024Flow Your Strategy at Flight Levels Day 2024
Flow Your Strategy at Flight Levels Day 2024Kirill Klimov
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?Olivia Kresic
 
International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...ssuserf63bd7
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfShashank Mehta
 
PB Project 1: Exploring Your Personal Brand
PB Project 1: Exploring Your Personal BrandPB Project 1: Exploring Your Personal Brand
PB Project 1: Exploring Your Personal BrandSharisaBethune
 
Innovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdfInnovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdfrichard876048
 
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCRashishs7044
 
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City GurgaonCall Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaoncallgirls2057
 
Financial-Statement-Analysis-of-Coca-cola-Company.pptx
Financial-Statement-Analysis-of-Coca-cola-Company.pptxFinancial-Statement-Analysis-of-Coca-cola-Company.pptx
Financial-Statement-Analysis-of-Coca-cola-Company.pptxsaniyaimamuddin
 
Entrepreneurship lessons in Philippines
Entrepreneurship lessons in  PhilippinesEntrepreneurship lessons in  Philippines
Entrepreneurship lessons in PhilippinesDavidSamuel525586
 
Call Girls Contact Number Andheri 9920874524
Call Girls Contact Number Andheri 9920874524Call Girls Contact Number Andheri 9920874524
Call Girls Contact Number Andheri 9920874524najka9823
 
Kenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith PereraKenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith Pereraictsugar
 
Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...Peter Ward
 
Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Seta Wicaksana
 
Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!
Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!
Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!Doge Mining Website
 

Último (20)

8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
8447779800, Low rate Call girls in Shivaji Enclave Delhi NCR
 
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdfNewBase  19 April  2024  Energy News issue - 1717 by Khaled Al Awadi.pdf
NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
 
PSCC - Capability Statement Presentation
PSCC - Capability Statement PresentationPSCC - Capability Statement Presentation
PSCC - Capability Statement Presentation
 
Flow Your Strategy at Flight Levels Day 2024
Flow Your Strategy at Flight Levels Day 2024Flow Your Strategy at Flight Levels Day 2024
Flow Your Strategy at Flight Levels Day 2024
 
MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?MAHA Global and IPR: Do Actions Speak Louder Than Words?
MAHA Global and IPR: Do Actions Speak Louder Than Words?
 
International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...International Business Environments and Operations 16th Global Edition test b...
International Business Environments and Operations 16th Global Edition test b...
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdf
 
PB Project 1: Exploring Your Personal Brand
PB Project 1: Exploring Your Personal BrandPB Project 1: Exploring Your Personal Brand
PB Project 1: Exploring Your Personal Brand
 
Innovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdfInnovation Conference 5th March 2024.pdf
Innovation Conference 5th March 2024.pdf
 
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
 
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City GurgaonCall Us 📲8800102216📞 Call Girls In DLF City Gurgaon
Call Us 📲8800102216📞 Call Girls In DLF City Gurgaon
 
Financial-Statement-Analysis-of-Coca-cola-Company.pptx
Financial-Statement-Analysis-of-Coca-cola-Company.pptxFinancial-Statement-Analysis-of-Coca-cola-Company.pptx
Financial-Statement-Analysis-of-Coca-cola-Company.pptx
 
Entrepreneurship lessons in Philippines
Entrepreneurship lessons in  PhilippinesEntrepreneurship lessons in  Philippines
Entrepreneurship lessons in Philippines
 
Call Girls Contact Number Andheri 9920874524
Call Girls Contact Number Andheri 9920874524Call Girls Contact Number Andheri 9920874524
Call Girls Contact Number Andheri 9920874524
 
Kenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith PereraKenya Coconut Production Presentation by Dr. Lalith Perera
Kenya Coconut Production Presentation by Dr. Lalith Perera
 
Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...Fordham -How effective decision-making is within the IT department - Analysis...
Fordham -How effective decision-making is within the IT department - Analysis...
 
Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...Ten Organizational Design Models to align structure and operations to busines...
Ten Organizational Design Models to align structure and operations to busines...
 
Enjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCR
Enjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCREnjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCR
Enjoy ➥8448380779▻ Call Girls In Sector 18 Noida Escorts Delhi NCR
 
Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!
Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!
Unlocking the Future: Explore Web 3.0 Workshop to Start Earning Today!
 
Japan IT Week 2024 Brochure by 47Billion (English)
Japan IT Week 2024 Brochure by 47Billion (English)Japan IT Week 2024 Brochure by 47Billion (English)
Japan IT Week 2024 Brochure by 47Billion (English)
 

The Thought Leader Interview: Cynthia Montgomery

  • 1. strategy+business issue 70 SPRING 2013 The Thought Leader Interview: Cynthia Montgomery A Harvard Business School strategy professor observes that leaders become better strategists by engaging in conversations about the purpose of a company. by KEN FAVARO AND ART KLEINER reprint 00163
  • 2. thought leader The Thought Leader Interview: Cynthia Montgomery A Harvard Business School strategy professor observes that leaders become better strategists by engaging in conversations about the purpose of a company. by Ken Favaro and Art Kleiner herself in the middle of a little- known but strongly felt debate that has gone on since the early 1980s in executive education and similar mi- lieus. On one side is the “positioning school” of business strategy: Success depends on analyzing industry dy- namics and competitive advantage, and staking out a position that is most resistant to competition on the basis of industry forces. Montgom- ery’s credentials on this side include numerous articles in leading eco- nomics and management journals, and co-editorship with Michael Por- ter of the influential anthology Strategy: Seeking and Securing Com- petitive Advantage (Harvard Busi- ness School Press, 1991). On the W hen you look at strategy education programs at Harvard for other side is a perspective known as a frame of mind to be leaders of owner-managed compa- in academia as the “resource-based thought leader cultivated, rather than nies. It is also grounded in her work view of the firm”: Success depends as a plan to be executed, you are far with large diversified companies. on cultivating the capabilities and more likely to succeed over the long For example, she has served on assets that no one else can match. run. That is the core premise put the boards of Newell Rubbermaid, One of the leading developers of this forth by Cynthia Montgomery, the UnumProvident, and several mu- field is Montgomery’s husband, Photograph by Brad DeCecco Timken Professor of Business Ad- tual funds, as well as on the board of MIT Sloan School professor Birger ministration and former chair of the McLean Hospital, a not-for-profit Wernerfelt. Montgomery and David strategy unit at Harvard Business organization based near Boston. Collis built on the resource school’s School, in her book The Strategist: Throughout her career, Mont- insights in “Competing on Resourc- Be the Leader Your Business Needs gomery, who has also taught busi- es: Strategy in the 1990s” (Harvard (HarperBusiness, 2012). The book ness strategy at Northwestern Uni- Business Review, July–August 1995), is based in part on her work over the versity’s Kellogg School and the one of the most reprinted articles in 1 past five years teaching executive University of Michigan, has found the history of HBR.
  • 3. Montgomery’s new book and But it’s just one of many things that they’re talking about their own her ongoing research into strategists’ the CEO is responsible for. So strat- companies. They revert to the same attitudes and actions represent an ef- egy becomes an area for experts. old generics that could apply to any fort to move past the dichotomy, The company draws on specialists to company: “We will succeed because and to focus on what it means for a help with external analysis, to do a we’re the quality leaders, we’re best leader to be a strategist. To Mont- deep dive on competitors, and to in class, we have the lowest costs,” gomery, a business strategist is not look at trends around the world. and so on. primarily an analyst of position, or All of that may indeed provide of resources; nor is the strategist incredible added value. It’s certainly S+B: The same old “blah, blah, blah.” purely adaptive, responding reac- helpful in setting the stage. But un- MONTGOMERY: Exactly. For many tively to the vagaries of fate. He or derlying all this activity is a funda- leaders, there’s an immense gap be- she is someone who engages in a mental question that any company’s tween intellectually understanding conversation about the purpose of a leader must ultimately answer: the theory of strategy and being able company. The company rises or falls What will this firm be, and why will to apply it in their own businesses. on the quality of that conversation it matter? This is not a soft, philo- It’s only by directly engaging in and the way it is used to make deci- sophical question. It is a hard-nosed, strategy themselves that most lead- sions about the ongoing work of the economic one. As my former col- ers internalize the important ques- enterprise. league Adam Brandenburger puts it, tions and get a clear sense of what’s To get a clearer view of that “Why would the world need this involved—the trade-offs, choices, approach, and what it might mean business? What would be different if commitments, and actions—in for senior executives, we sat down it didn’t exist?” bringing a strategy to life. In work- with Cynthia Montgomery in her And a leader can’t consider the ing with these executives in class, office at Harvard Business School in question just once and be done with my goal is to help them confront the November 2012. (She subsequently it. That question needs a compelling gap between the high standards obtained permission to publish the answer every day of a firm’s exis- they’re developing for others’ strate- anecdotes in which students are tence, an answer that’s relevant as gies, and the often considerably less named.) This interview provides a the business evolves, and as markets rich reality of their own. glimpse of the direction that we and customers evolve. To enable that think many business schools will kind of continuous evolution, strat- S+B: How do you try to accomplish take in the years ahead: combining egy should never be thought of as a this in the programs you teach? the positioning and resource views, problem that’s been solved and set- MONTGOMERY: I’ve taught some the entrepreneurship and manage- tled. There are occasional dramatic courses with 180 owner–managers ment roles, and the strategy and changes, but mostly it’s an evolu- coming to campus for three, three- execution imperatives into a single tionary process, with the CEO at week sessions, spaced a year apart. discipline that could be described as the center. When they enter the program’s third “identifying and realizing the pur- In some executive courses, I ask session, they work on their own thought leader pose of your organization.” students to describe the strategy for strategies. First they write up a stra- their companies. Many of them start tegic plan on their own, with input S+B: You’ve written that a leader out thinking that the goal is to have from their teams back home, then who wholeheartedly embraces a a product, get it all down in writing, they share their work with one an- strategic perspective is not the same and they’re done. But the process other. That’s when things get really as a conventional manager. Why not? doesn’t end there. We bring the serious. MONTGOMERY: Think about who strategies up for critique, and they We usually divide the group does strategy in most large compa- have to defend them. It’s always sur- into cohorts of eight to 10 people. nies and where the strategist typi- prising to see how the same individ- Each person presents his or her strat- cally resides in an organization. It’s uals who are good on their feet and egy to the cohort, and then each co- not the CEO; it’s a specialist func- have brilliant things to say when hort selects one strategy to present to tion. Of course, everybody says that talking about a case study like Nike the full class. I ask them to select the strategy is the CEO’s responsibility. or General Electric falter when one that makes the most use of the 2
  • 4. Ken Favaro Art Kleiner ken.favaro@booz.com kleiner_art@ is a contributing editor to strategy-business.com strategy+business and a senior is editor-in-chief of partner with Booz & Company. strategy+business. Based in New York, he leads the firm’s work in enterprise strategy and finance. principles we’ve talked about togeth- you doing that’s really distinctive?” document, or an occasional exercise. er. We end up with about 20 strate- Sometimes he’d put it as I did in It should be a way of looking at the gies presented to the full class, 10 class: “Help me understand why world, interpreting experience, and each in two long sessions. Each strat- your business really matters.” And thinking about what a company is egy is critiqued by another group, he kept after them until they gave a and why it matters. The formal stra- and then discussed openly by the thorough answer. By the end of tegic planning process is only part of whole class. The sessions go on for those sessions, everybody had inter- it; the deeper responsibility is ongo- hours. The people in the room typi- nalized those questions. I came to ing and continuous. I often refer to a cally have very helpful things to say, feel that this process was the heart of quote from the great 19th-century so much so that we now give an a strategic conversation. A leader Prussian military strategist Helmuth award for the best critique, along builds a strategy through in-depth von Moltke: “Certainly the com- with an award for the best strategy conversations with a group of his or mander in chief will keep his great presentation. her peers, testing the ideas against a objective continuously in mind, un- The tone for the critiques was variety of situations. Knowing how disturbed by the vicissitudes of set several years ago by Jack, an ex- to do that well will serve the gradu- events. But the path on which he ecutive from Venezuela. Between ates better as leaders than any par- hopes to reach it can never be firmly the second and third year of the ticular plan they develop at Harvard established in advance. Throughout program, as pressures from Hugo Business School. the campaign he must make a series Chavez’s government increased, of decisions on the basis of situations Jack’s business suffered; it lacked a S+B: Are you saying that in a well- that cannot be foreseen…. Every- clear growth path. He came back for run company, the CEO should have a thing depends on penetrating the thought leader the third year anyway, and as he group of senior executives who play uncertainty of veiled situations to dealt with his own challenges, he be- the same questioning role? evaluate the facts, to clarify the un- came a major presence in the class. MONTGOMERY: That’s right. And known, to make decisions rapidly, Jack was a regular at the pre- yet that’s not the way it works in and then to carry them out with class lounge sessions, which often many companies today; business strength and constancy.” went on well past midnight. Stu- heads make presentations, but often That’s the job of a business dents came there to test out their they’re choreographed ahead of strategist, no less than a military strategies with me and whoever else time, and they often don’t question commander, and it’s a challenging strategy+business issue 70 was interested, and often 30 or 40 their peers as much as they could. balancing act—an ongoing, not a people would show up. I’d like to see the managers at all periodic, responsibility. Unfortu- Jack took the seat next to mine, those meetings raise the game by nately, that’s not the way strategy is night after night. He asked each pre- challenging one another. generally taught in business schools, 3 senter the same question: “What are A strategy shouldn’t be only a and it hasn’t been for a long time.
  • 5. The Capstone Course change their approach to strategy in have a course called General Man- the early 1980s after Michael Porter agement. Nor do most other busi- S+B: How has the teaching of strat- introduced the idea of competitive ness schools. Many students have egy changed? analysis. His course material on the come to view entrepreneurial man- MONTGOMERY: Back when I was an subject was wildly popular because agement courses as the capstone ex- MBA student in the 1970s, strategy he brought economic rigor to the perience of the MBA curriculum, at most schools was taught as part analysis of strategy. On its own, that where you learn about defining busi- of a course called Business Policy was absolutely good. It transformed nesses, moving them through and General Management. It was the era. My own work followed in growth, changing course, and doing thought of as the capstone course; it that wake. Using large-sample statis- it again. But entrepreneurship cours- came last in the sequence, after mar- tical analysis, I examined the rela- es don’t teach people how to run a keting, finance, production, and or- tionship between the overall profit- large company; they teach them how ganizational behavior. Having seen ability of a corporate enterprise and to create and finance a startup. If we care about improving the quality of large-enterprise strategy, we manage- “A strategy should be a way of looking ment academics have to avoid hoist- ing ourselves on our own petard. at the world, interpreting experience, and thinking about what a company is S+B: Hasn’t the specialized, analytic approach to strategy lost some of its and why it matters.” value in recent years? MONTGOMERY: Yes. It started to level off in the early 2000s. I saw all the pieces, the student was sup- the average profitability of the in- that recently when, as part of my posed to put them together. The dustries in which it competed. work on The Strategist, I talked with course combined thinking and do- But over time, the economics several speakers bureaus, thinking ing, strategy formulation and strate- began to distract people from the the subject of strategy would be hot. gy execution. The main textbook, leadership aspect of strategy. Before But instead, they said they would Business Policy: Texts and Cases, was long, strategy at many top business market me as a speaker on innova- written by legends in the field: C. schools was taught by economists tion or change management. Their thought leader Roland Christensen, Joseph Bower, focused on theory and analytics. If interest in my book came not from and Kenneth Andrews [Irwin, 1965, you do this, how will your competi- the topic of strategy per se, but from rev’d. 1982]. The very first chapter tors respond? How do the structural its focus on what strategy means for was called “The Presidential Point of characteristics of an industry shape business leaders. View.” Another major section was competitive behavior? All important The discussions helped me called “The Accomplishment of issues, to be sure, but gradually strat- come to terms with how much strat- Purpose.” To this day, I tell the ex- egy became an exercise in getting egy had lost its vitality—its edgi- ecutives I work with, “If someone the analysis right, providing the an- ness—and the tremendous opportu- asks you what you do for a living, swer, and letting someone else im- nity we have to embrace it in a new just look them in the eye and say, plement it. That reinforced the idea way. I think other academics are be- ‘I’m an architect of organizational that strategists were a group with ginning to see the same potential. purpose.’” specialized training. For instance, at a strategy confer- Many business schools began to Today, Harvard doesn’t even ence in celebration of the Harvard 4
  • 6. Business School centennial, our S+B: What does strategy work look the company. Ikea’s system of ad- theme was “putting leadership back like when it is action-oriented? vantage, built around that idea, is into strategy.” MONTGOMERY: Let’s say you’re a one of the company’s most impor- business leader, and you have an idea tant resources. Anders Dahlvig, for- S+B: When did you realize the limits for your business. That’s just the be- mer group president, put it this way: of the analytic approach yourself? ginning. You have to articulate it, “Many competitors could try to MONTGOMERY: A lot of it came choose to invest in it, and create the copy one or two of these things. The through executive education, work- organizational context where people difficulty is when you try to create ing with managers who had an op- can bring it [to life]. That means the totality of what we have.” For in- portunity to use strategy to make a building a system of advantage—a stance, copying the low prices would powerful difference in their compa- business model tailored to that pur- not work without copying their ap- nies. In countless late-night conver- pose, where the pieces work in sync, proach to sourcing, their flat-pack sations, I learned a lot about the and where the whole is more than distribution concept, the way they challenges they faced and their aspi- the sum of the parts. Done well, it design their stores and catalogs, and rations, and I saw what happened to companies where no one stepped up. The existentialist philosopher Jean- “Creativity isn’t considered very Paul Sartre wrote about the “courage to choose,” and understood that important in the culture that has choosing isn’t just an intellectual thing; it takes guts. grown up around strategy. That Strategy books don’t talk about has to change.” that. They also rarely talk about how to get others involved, or how to serve as a champion of the pro- turns a concept into an animating their Scandinavian furniture de- cess. Thomas Saporito, the coauthor idea: A clear view of what your com- sign—“which is not easy,” he says, of Inside CEO Succession: The Essen- pany will bring to the world, why it “without a Scandinavian heritage.” tial Guide to Leadership Transition will matter, and how you will do it. [Wiley, 2012], has written about A lot of those hows will be deter- S+B: Ikea has essentially one busi- CEOs who fail because they know mined by others throughout the or- ness. Can a multi-business, diversi- thought leader their strategy is correct, and they as- ganization, but that can’t happen fied company also be built around an sume that’s enough to overcome any unless there’s clarity at the core. animating idea? lack of buy-in. He reminds them Look at a business like Ikea, MONTGOMERY: Certainly. One of that “executives don’t get paid to be which I wrote about in The Strate- my favorite examples comes from right. They get paid to be effective.” gist. The founder, Ingvar Kamprad, Apple. In 2001, when Steve Jobs had In working with leaders, I also stated his animating idea back in the only been back at the company for a realized how vitally important cre- 1940s. They would offer a line of couple of years as CEO, he gave a ativity is in strategy. It takes the practical, well-designed furnishings presentation at the Macworld Expo strategy+business issue 70 whole brain—intuition and analytic at prices so low everyone could af- in which he talked about the three skills—to do it well. But creativity ford them. When you walk into an ages of the PC. First came the age of isn’t considered very important in Ikea store, every detail goes back to productivity, then came the age of the culture that has grown up that idea. It’s not in a document on a the Internet, and now would be the 5 around strategy. That has to change. desk; it’s the energy that gives life to age of the digital hub. He talked
  • 7. about MP3 players, cell phones, and you dive into that story, you can see not a matter of immaculate concep- digital cameras, which at the time that his victories were hard won. I’m tion, where you get a single answer accounted for only 15 percent of all trying to get people excited about and forever rule out other options. camera sales, but, “in a couple of being strategists and to see why it’s a As a business, you operate in a com- years,” he said, “it will be 50 per- distinctive way that they as leaders plex system of other companies in cent.” Going forward, Apple would can add value to their businesses. which any advantage is fragile. Even add value to a host of digital devices, I’m also trying to help them under- Steve Jobs embellished and subtract- and be the company whose comput- stand that strategy is far more than ed as time went on. You need to ers would tie them all together. an idea. There’s a conundrum you think about your strategy as an Some people argue that a strat- sometimes hear in business school: open, living thing. You start out by egy is understood only in hindsight, “Would you rather have a brilliant, defining who you are as a company. retrospectively trying to make sense fully worked-out strategy and poor But then you try it out, and discover of a group of haphazard, reactive execution, or a half-baked strategy that it’s not working so well, so you moves. But here’s a case where, when well executed?” The point is sup- adjust it. the stock price was still very low, posed to be that good execution is For example, we teach David Steve Jobs laid out his animating preferable every time. At least it gets Yoffie’s case on the Gucci Group. idea in public, in advance. When you some results. But, at root, it’s a The company hit the skids in the Apple came out with iTunes, the vacuous question. How can you im- 1980s, when counterfeit products iPod, and the Apple Store, it all plement the hell out of something if and an undisciplined licensing strat- made sense in light of that idea. you don’t know what you’re trying egy nearly destroyed the brand. to accomplish? Maurizio Gucci, grandson of the thought leader thought leader S+B: In The Strategist you write that I can understand that you founder, stepped in and tried to re- people respond to this story by say- might be tempted to favor execution position the company, but custom- ing, “Sure, but I’m not a genius like because you don’t really know if ers balked and were slow to come Steve Jobs.” Does a good strategist your strategy will succeed. If your back. A new CEO, Domenico De have to be a genius? strategy says you should take dra- Sole, was hired in 1993 to pick up MONTGOMERY: Jobs is widely matic, disruptive risks, do you really the pieces. De Sole forged a new praised as a genius today, but one of dare to stand with it and keep sup- purpose built around providing the things I appreciate most about porting it? But frankly, a lot of busi- fashion-forward clothing at good him is his failures—the Lisa com- nesses face more pedestrian choices, value, and rebuilt every activity in puter at Apple and the ego-busting with much less risk—and they’re the company to align with it. Did demise at NeXT, the startup Jobs still not living deliberately, and are Gucci survive? Yes. Did it thrive? founded when he was ousted from still flying by the seat of their pants. Yes. But it was a different company an operating role at Apple. When More importantly, strategy is than it had been in its former hey- 6
  • 8. day, a company that mattered for a different reason. Similarly, when Ingvar Kam- prad started out, he was forced to leave Sweden. The existing Swedish retailers didn’t like his low prices and put pressure on local manufac- what’s being done, but why. He or develop the search criteria for an in- turers to refuse to supply him. In she understands that the quality of coming chief executive, and I always fear that he’d lose the whole busi- execution begins there. No matter underscore the need to marry the ness, he went to Poland in search of how successful an operator or execu- ability to conceptualize with the new suppliers; their prices proved to tor you are, no matter how good ability to translate those concepts make not just a difference in degree, your product innovation or manu- into action. Generally, I’d look for but a difference in kind. In other facturing processes are, if your com- people who have transformed a busi- words, this wasn’t just an incremen- pany doesn’t have a meaningful dis- ness—redefined what it was and tal shift in one factor—it led Ikea tinction, you won’t be effective; and why it mattered, rebuilt the business into a completely different business if you can’t move it forward, your model, and delivered. To lead, you model. Kamprad’s strategy devel- company will stagnate. need to be able to do more than just oped because he was open to rede- You learn those skills over time. clean up operations or coast on an fining the business. Robert Katz, who wrote a classic ar- existing path. ticle called “Skills of an Effective And I’ve worked with enough S+B: So the point of a strategy is Administrator” [Harvard Business CEOs to know that they need to be to keep improving your animating Review, September 1974], said that able to make meaning for an organi- idea, and to keep building your own when you start your career, to suc- zation, to connect the efforts of ev- capacity to develop and execute it. ceed, you need a functional skill: eryone in it with a purpose that really MONTGOMERY: Yes, usually that’s For example, you need to be good at matters to some set of customers. true. Isn’t that preferable to the di- accounting, engineering, or HR. At chotomy we’ve been talking about, the next level up, you need to be S+B: What is the future of strategy between conception and execution? good with people. And at the very education? Isn’t it better than being just the top, you need conceptual skills. MONTGOMERY: Thinking about the caretaker of a plan? Isn’t it a much Years later, someone asked him if he cultural connections among busi- better insight to pass on to the other still agreed with that statement, and ness leaders as an ecosystem, we managers in your company, who he said he was even more fervent want to create an atmosphere where could be developing their strategic about it now. But he thought that a new type of conversation can be perspective along with you? people either had those skills by the held—not just in a university class One must also acknowledge, time they were teenagers, or they or in a management consulting firm though, that sometimes the animat- would never have them. engagement, but among leaders in thought leader ing idea itself has run its course and I don’t agree with that part of it. general. We want to set up the kind more radical action is necessary. The I think those skills can be developed of conversation that opens the win- question remains the same: Why later in life. But I do agree that such dow to new strategic possibilities does the world need this company? skills are the key to becoming an ar- and allows people to move a com- chitect—or, better yet, a steward— pany in a new direction. The Education of a Strategist of organizational purpose. As it hap- One of our students, Yegs Ra- pens, I’ve been at the boardroom miah, is an executive at Santam, the S+B: If you could spend time with a table with Bob Katz, and he has in- largest short-term insurance compa- strategy+business issue 70 group of prospective chief execu- credible conceptual skills himself. ny in South Africa. Santam operates tives, could you tell the strategists But he also understands that they in a category where there is little from the caretakers? create value only when they’re inti- differentiation, with high levels of MONTGOMERY: Yes. A leader who is mately linked to action. commoditization, rampant price 7 a strategist has clarity not only about I am sometimes asked to help competition, and a race to the bot-
  • 9. tom that has been threatening the series of ads. In one of them, he nesburg Children’s Home. profitability of the industry. More- stands in a restaurant, with a bar- Santam’s challenge to Nando’s over, Santam had been in the game tender behind him mixing drinks, took South Africa by storm. The ad for 95 years; it was perceived as old- moving in and out of the frame. He got more than 250,000 hits on You- school, conservative, and expensive, reminds the audience how easy it is Tube, and Santam’s name is now mainly serving the country’s older to wear blinders and overlook things everywhere, as an example of a com- white population. To ensure future that are right in front of you. If you pany that is humane, progressive, success, Santam had to tap into go for the cheapest home insurance, contemporary, and accessible to a growing group of customers. The campaign reinvented the brand and, “Nobody could beat Ford at his own with that, the business. That’s strategy. It’s not unlike game, but Sloan reinvented the auto what Steve Jobs did for Apple, or company. A really good strategy what Alfred Sloan did for General Motors when he first went up against revitalizes the company.” Henry Ford. Nobody could beat Ford at his own game, but Sloan re- invented the auto company. A really the growth market—it had to ap- you might miss an important detail. good strategy doesn’t happen on the peal to people of all races and ages “What if I told you,” he concludes, margin; it doesn’t simply perpetuate and extend its reach into the grow- “that Floyd’s uniform has changed an industry game that is mature and ing middle class. four times while I’ve been talking?” may be decaying. Yegs led a process to redefine The ad caught on, and people want- A really good strategy revitaliz- the brand positioning and the per- ed to watch it carefully to see where es the company, and to do that, you sonality, refresh the logo and the the bartender’s outfit changed. It need to assemble a group of people visual identity, and develop an won several accolades, including a who have the courage to confront integrated communication and mar- Silver Clio award as well as a Bronze business at its roots. You need people keting campaign. She realized that Lion in Cannes. who can say, in effect, “Strategy is in order to challenge accepted Nando’s, a large South African dead. But long live strategy.” + norms, Santam would have to rede- fast-food chain renowned for their Reprint No. 00163 thought leader thought leader fine the short-term insurance cate- satirical advertising, then parodied gory. She looked for ways to change the ad with one of their own, steal- the conversation about insurance ing the concept. Instead of ignoring from its being trivial and dispens- it, or threatening to sue, Yegs got the able, cheap, and a little bit nasty, to same agency to create a response. its being important and meaningful, “Under normal circumstances we’d with enduring value and substance. be upset, but frankly we’re flattered,” This meant inspiring South Afri- said a Kingsley-like narrator in the cans to take the issues of managing new ad. Then he made a demand: risk and preparing for their future Santam would “overlook the indis- more seriously. cretion” if Nando’s delivered a pack- Yegs hired Oscar-winning actor age of food—a list of dishes from Sir Ben Kingsley to narrate a new the Nando’s menu—to the Johan- 8
  • 10. strategy+business magazine is published by Booz & Company Inc. To subscribe, visit strategy-business.com or call 1-855-869-4862. For more information about Booz & Company, visit booz.com • strategy-business.com • facebook.com/strategybusiness • http://twitter.com/stratandbiz 101 Park Ave., 18th Floor, New York, NY 10178 © 2013 Booz & Company Inc.