Strategy Innovation and the Quest for Value

This is an MIT Sloan Management Review article. Why has the strategy star begun to dim? Why is strategy no longer a "big idea" in most companies? According to the author, strategy innovation is key to creating new wealth. Only those companies that are constantly able to reinvent themselves will survive in a discontinuous world. Yet, no one seems to know how to develop innovative strategies that create wealth. The author calls for the development of a theory of strategy innovation and offers several propositions: that strategy is emergent, much like life itself; that strategists have been working on the "strategy," rather than on the preconditions that give rise to strategy innovation; that strategy is poised on the border between perfect order and total chaos; and that great strategy is both luck and foresight. The author goes on to offer five preconditions for the emergence of strategy: First, the entire organization, not just top management, should have a voice in creating strategy. Second, conversations about strategy must cut across industries and organizations so that knowledge can be combined in new ways. Third, people will embrace change when they see opportunities for rewards and growth. Fourth, managers must help companies reconceive themselves, customers, competitors, and opportunities. Finally, companies must do some market experimentation to determine which new strategies work.

• Innovation
• Corporate strategy
• Strategy formulation