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Strategies for a discontinuous future.










Thursday, July 13, 2006
 
Bombings

To all those affected by the latest round of atrocities in India - my heart goes out to you.

-- umair // 3:04 PM //


 
Laws of the Post-Network Economy: Strategy is a Commodity

Not much time to write, so I will try and be concise.

I'm working on a longer piece about the laws of the (new) new economy. One of the laws is the title of this post - strategy is a commodity. What does that mean?

30 years ago, thinking strategically about business was revolutionary. It allowed visionaries to shape value creation in entirely new ways. The result was the death of conglomerates and the birth of the modern transnational.

Today, the average corporation is packed to the gills with strategists. It's up to it's ears in strategy consultants. The language, vocabulary, and ideas of strategic thinking permeate it.

And that's no surprise - strategy is a very useful way to think about commerce (art, life, etc).

But that also means that everyone and their grandmother knows how to pick profitable markets, segment them, price goods and services, analyze competitors, understand industry economics, etc, etc.

Strategy itself, in a very real sense, is becoming a commodity.

But our fascination with it persists - especially in America, where we (mis)apply the rules of strategy to everything, from relationships to culture. But that's a different question.

The bigger question the commoditization of strategy begs is this: what is the next great shift in value creation? What is the next great paradigm that will shape how the people that own resources - corporations, entrepreneurs, capitalists - think about how to create value from them?

I think it is going to have to do with creativity. In a world where strategy is a commodity, creativity becomes the vital factor from which value flows. When everyone can think strategically about everything, the locus of value creation shifts from out-thinking everyone to out-creating them. The prime mover of value creation becomes putting the ability to create (goods, services, processes - even strategies) at the heart and soul of the firm.

Now, we see the hints of the revolution everywhere - from the death of mass culture/blockbusters, to the rise of free culture, to the exploding investment in innovation and design, to the flight of capital away from the US. I think it is going to create enormous challenges for firms - challenges which can't be answered by thinking strategically; but can only be faced by thinking creatively.

All of which requires a sea change in the ways we manage; the ways we coordinate; in the primordial, deep DNA that every firm shares. It requires a new way of thinking about value - onw with roots in creativity, not strategy.

-- umair // 2:50 PM //


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