Firms with ill-considered globalization strategies, say Alexander and Korine of London Business School, are poised to become targets for breakup or overhaul by activist shareowners. Yet many businesses (particularly in deregulated, service, and manufacturing industries) have made complacent assumptions about the need to go global and moved full steam ahead toward failure. If they had paused to answer three simple questions, they might well have avoided their missteps. Are there potential benefits for our company? Moves that make sense for some firms won't necessarily work for others. UK-based roof tile maker Redland learned that lesson when it tried leveraging its technical know-how beyond its home market - without realizing that building practices in certain countries provided very little demand for concrete roof tiles. The company was fully able to transfer the relevant technology, but there was no value in doing so in those markets. Do we have the necessary management skills? Even if potential benefits do exist for a company, it may not be in a position to realize them. Although industrial conglomerate BTR had developed a presence in many countries, each business unit was run more or less autonomously. As its customers globalized, they came to expect coordinated supply and support across borders. BTR was well positioned to deliver, but its ingrained culture blocked attempts at global integration. Will the costs outweigh the benefits? Global efforts can be rendered counterproductive through unanticipated collateral damage. TCL, a Chinese maker of electronics and home appliances, has expanded rapidly into the United States and Europe through a series of acquisitions and joint ventures. Along the way, the company's infrastructure has become unwieldy; the cost of managing it has outweighed the benefits of increased scale and resulted in large losses.

Why is it that successful strategies are rarely developed as a result of formal planning processes? What is wrong with strategy or the way most companies go about developing it? Andrew Campbell and Marcus Alexander, seasoned practitioners of the art of strategy, who consult, teach and do research at the Ashridge Strategic Management Centre, offer a "common sense" piece on why the planning frameworks managers use so often yield disappointing results. Strategy, they explain, is not about plans but insights. Strategy development is the process of discovering and understanding insights and should not be confused with planning, which is about turning insights into action. The answer is not new planning processes, better designed plans, or more effort. The answer is for managers to understand two fundamentals--the benefit of having a well-articulated and stable purpose and the importance of discovering, understanding, documenting, and exploiting insights about how to create value.

While the core competence concept appealed powerfully to companies disillusioned with diversification, it did not offer any practical guidelines for developing corporate-level strategy. To fill the gap, the authors propose the parenting framework, with tools for answering two questions: Which business should a company own? What parenting approach will get the best performance from those businesses? To determine the fit between a parent and its businesses, corporate strategists should look at four areas: the critical success factors of the business, the parenting opportunities in the business, the characteristics of the parent, and the financial results. Next, to determine which businesses to keep and which to divest, they should rank them into five categories: those that fit well; those that fit in some ways; those that fit but have little potential; those with a possibility of value destruction; and those that fit in parenting opportunities but not in critical success factors.