“Because strategy is a journey, executives need to study, understand, and internalize the economics, psychology, and laws of their industries, so that context can guide them continually.
For example, being able to think strategically in the high-tech industry involves a nuanced understanding of strategy topics such as network effects, platforms, and standards. In the utilities sector, it involves mastery of the economic implications of (and room for strategic maneuvers afforded by) the regulatory regime. In mining, leaders must understand the strategic implications of cost curves, game theory, and real-options valuation; further, they must know and be sensitive to the stakeholders in their regulatory and societal environment, many of whom can directly influence their opportunities to create value.”
“Moreover, many senior executives are happy to delegate thinking about such technology issues to their company’s chief information officer or chief technology officer. Yet it’s exactly such cross-cutting trends that are most likely to upend value chains, transform industries, and dramatically shift profit pools and competitive advantage.”
“Montgomery maintains that strategy has been narrowed to a competitive game plan, separate from a firm’s larger sense of purpose. This has led to the eclipse of the leader’s unique role as arbiter and steward of strategy. The exaggerated emphasis on sustainable competitive advantage has drawn attention away from the fact that strategy must be a dynamic tool for guiding the development of a company over time.
“Strategy has become more about formulation than implementation, and more about getting the analysis right at the outset than living with a strategy over time,” Montgomery says. “As a consequence, it has less to do with leadership than ever before.”
Montgomery explains that leading strategy requires confronting four questions: What does my organization bring to the world? Does that difference matter? Is something about it scarce and difficult to imitate? Are we doing today what we need to do in order to matter tomorrow? Being a strategist means living these questions, she says.
For a leader, becoming a strategist starts with getting clear on why, whether, and to whom your company matters.”
“As a result, companies need talented executives in the business who can step back and look at what is going on from a holistic, systems point of view. How do you frame strategies so they can be quickly operationalized to meet the time-to-market demands of the business? How can you position what you are able to get done in the near term as phase one of your longer term strategy? As companies struggle to address those questions, CIOs are increasingly being asked to play the role of Chief Systems Officer, someone who understands the strategic requirements of the business and has the tools and the business ability to operationalize the strategy in a timely way.”