The Strategist

In my experience, most executives understand that average profitability will differ from industry to industry, but the scale of variation often comes as a surprise. Annual average returns in the most profitable industries are well more than double those in median industries, and more than four or five times those at the bottom of the distribution.

Like most businesspeople, these managers are likely to be familiar with at least a vague definition of strategy. The word itself comes from the ancient Greek for “general”—specifically for the general on campaign in the field.

These competitive forces are beyond the control of most individual companies and their managers. They’re what you inherit, a reality that you have to deal with. It’s not that a firm can never change them, but in most cases it’s very difficult to do. The strategist’s first job is to understand them and how they affect the playing field where competi

came to see that we cannot afford to think of strategy as something fixed, a problem that is solved and settled. Strategy—the system of value creation that underlies a company’s competitive position and uniqueness—has to be embraced as something open, not something closed. It is a system that evolves, moves, and changes.

Does your company matter? That’s the most important question every business leader must answer. If you closed its doors today, would your customers suffer any real loss? 1 How long would it take, and how difficult would it be, for them to find another firm that could meet those needs as well as you did?

In the 1980s and ’90s, my colleague Michael E. Porter broke important new ground in the field. His watershed came in firming up the Opportunities and Threats side of the analysis by bringing much-needed economic theory and empirical evidence to strategy’s underpinnings, providing a far more sophisticated way to assess a firm’s competitive environme

That’s why my ultimate goal here is not to “teach strategy,” but to equip and inspire you to be a strategist, a leader whose time at the helm could have a profound effect on the fortunes of your organization.

Alongside all the conventional questions were ones about what to do when the limits of analysis had been reached and the way forward was still not clear; questions about when to move away from an existing competitive advantage and when to try to stay the course; questions about reinventing a business or identifying a new purpose, a new reason to ma

Some EOPers find it extremely difficult to identify why their companies exist. Accustomed to describing their businesses by the industries they’re in or the products they make, they can’t articulate the specific needs their businesses fill, or the unique points that distinguish them from competitors on anything beyond a superficial level. Nor have

Most notably, strategy became more about formulation than implementation, and more about getting the analysis right at the outset than living with a strategy over time. Equally problematic, the leader’s unique role as arbiter and steward of strategy had been eclipsed. While countless books have been written about strategy in the last thirty years,