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The Strategist
Book Review of Cynthia A. Montgomery's The Strategist by Hazel Jackson

I was curious to learn from this book as Montgomery is an acclaimed professor at Harvard Business School who changed her perspective from the more traditional teaching of strategy to what she describes as a radical approach to the leaders role – ultimately that the leader must be a strategist.

Interestingly, I didn't find what she shared to be very radical at all. Montgomery references show that few authors before her have identified the need to focus on the leader rather than the strategy tools. As Jim Collins has been focusing on Level 5 leadership for over 10 years I thought this was a bit misguided.

Apart from disagreeing with Montgomery’s position that this was the bright shining new approach, I agreed with much of what she wrote about. She discovered what she shares when she started teaching a group of business men and women rather than Harvard graduates. It was a management boot camp for Entrepreneurs, Owners and Presidents (EOP). This shift meant, she needed to share practical tools that could be used in real businesses, and it moved her from the heavy theory based thinking to more leadership principles. Montgomery states “What’s been forgotten is that strategy is not a destination or a solution. It’s not a problem to be solved and settled. It’s a journey. It needs continuous, not intermittent, leadership. It needs a strategist”. She challenges that a lot of companies have created strategy departments and these now drive the strategy whilst leaders take a back seat or superficial role.

“No matter how hard you and your people work, no matter how wonderful your culture, no matter how good your products, or how noble your motives, if you don’t get strategy right, everything else you do is at risk.”

The key question that links all the chapters is “Are you a strategist?” Intriguing, this spurs you on as a leader to check out your capability and thinking against what she covers in 148 pages and 8 chapters.

So what does it take according to the author and what key lessons were insightful for me.

1. Understand your Industry
  • Understand the competitive forces in your industry. How you respond to them is your strategy. That means if you don’t understand them, your strategy is based on luck and hope
  • Find a way to deal with your industry forces. It may mean skillful positioning, deliberate efforts to counter negative forces or exploit favorable ones, or even a timely exit. Don’t be trapped into believing your superior management will carry you to success
  • Don’t underestimate the power of these forces; their impact on your destiny may well be as great as your own
Key Learning

Understand your industries forces. She shares a relative industry profitability chart that shows how different industries operate. No matter how good your business idea, you need to factor in the relative industry advantages and disadvantages, and unless you can find a way to fundamentally change one of these you will play within those normal boundaries. There are 5 elements you can map against your business in the following continuum table:

             Unattractive…                                                                                 …Attractive
High. Many homogeneous competitors and homogeneous products. Innovations quickly copied. Slow growth. Excess capacity. Price competition Rivalry among firms Low. One or a few dominant, differentiated players. Unique products. Strong brand identities. Rapid industry growth. Shortage of capacity
High. Industry is dependent on a few, concentrated suppliers producing unique products, and industry is not important source of profitability to suppliers Power of Suppliers Low. Many suppliers producing homogeneous products. Price competition and plentiful supply make it easy to procure supplies at a reasonable cost.
High. Customers have lots of choice among similar products. Low levels of brand awareness. Low switching costs. Low levels for emotional involvement with purchase Power of Customers Low. Products are scarce, highly differentiated, and important to customers’ well-being. Customers have limited choice. Brands are strong
Low. Industry is easy to enter and sometime difficult to exit, creating excess capacity. Strategies of existing competitors can be easily replicated or surpassed. Entry requires low levels of capital, modest scale, and no scarce or specialised resources Barriers to entry and exit High. It is difficult or not economical for new firms to enter your industry. Entry requires economy of scale, product differentiation, high capital investment, regulatory approval, or accumulation of special expertise or experience.
High. Wide variety of compelling substitute products are available that meet customers’ needs at attractive prices Availability of substitute products Low. Customers have few or no choices of alternative products that could meet their needs at comparable prices

Where is your industry along each of these continuums?

1. Begin with Purpose and Turn your Purpose into Reality

Defining your purpose takes time and thought. A good one can make all the difference to the success of your business. It sets the stage for value creation and capture.

There are some interesting perspectives on how you expand value creation – but creating a greater differentiation between What Customers are ‘Willing to Pay’ and what your suppliers are ‘Willing to Charge’. Plus a nice thought provoking question is to challenge whether you have the right purpose:

“If your company disappeared today, would the world be different tomorrow?”

The big case study in the first half of the book is all about the furniture business. How many companies had failed in this highly competitive, low yield business, and how IKEA had changed the game with their approach.

She then delves into Gucci’s history and how they grew, stumbled and turned the business around. The story is written in a very engaging and interesting manor. She takes the message of purpose and shows first how a purpose that worked from the 1920-1970s, was no longer viable and how after many false starts and errors, changing the purpose and positioning of Gucci saved the company and the brand.

I found the Strategy Wheel an interesting approach to connecting all facets of a business and all departments back to the purpose. It would be an easy tool for any leader to orchestrate and would help every employee visualise their contribution to success.

The final element of this chapter is the importance of Execution and the realisation that the strategy is worth nothing if you don’t drive execution. Also that execution is not one big event, but rather a series of lots of little things, prioritised and aggressively action.

2. Own your Strategy

I have to say I was going through the motions reading this book by now. There are a few gems of learning but you have to dig hard for them.

When writing your strategy, don’t under estimate the power of language. Getting the words developed correctly so you can communicate to others in a clear way.

This whole chapter repeats much of what she covered before, remphasising the importance of owning your purpose. She then recommends people to write a strategy statement, I have to say I disagree with some of the examples provided, they seem wordy and generic. I’d have liked some more punchy short statements that embellish a one word purpose - this was the start of the end of the book for me.

3. Keep it Vibrant

This chapter was a mini book on Apple and Steve Jobs – I kept hoping for a new insight or revelation as to why she had written 23 pages about their history. There wasn't one.
I got a couple of intriguing strategic questions from the chapter though – some great ones to ask at your next strategy meeting:
  • “If you had to cut half of your products, what would you do?”
  • “If money was no object, what would you do?”
This chapter underneath the long Apple story, was keep your strategy iterative, it is not solved in one brainstorm meeting or once a year. You need to constantly evaluate and update your thinking.

Zeroing in on one competitive advantage and expecting it to be sustainable misrepresents the strategist’s challenge. It encourages managers to see their strategies as set in concrete and, when spotting trouble, to go into defensive mode, hunkering down to protect the status quo instead of rising to meet the needs of a new reality.

4. The Essential Strategist

This chapter was vague and repetitive – it was about taking control, staying agile and getting your team onboard.

The whole concept of the book is for the leader to take ownership of the strategy. I did buy into this principle and realised how important it was for me as a business owner to stimulate and drive the strategy.

Also to ask – “What kind of company do you want yours to be?”

Montgomery’s final words on the topic:

Articulating and tending to a living strategy is a human endeavor in the deepest sense of the term. Keeping all parts of a company in balance, while moving an enterprise forward, is extraordinarily difficult. Even when they have substantial talent and a deep appreciation for the job, some leaders ultimately don’t get it right. Their legacies serve as sobering reminders of the complexities and responsibilities of stewardship. On the other hand, it is exactly these challenges that make the triumphs so rewarding.

“Are you a strategist”?

- Hazel Jackson, CEO of biz-group
Listen to the podcast of Hazel Jackson on The Library, Dubai Eye 103.8 reviewing Cynthia A. Montgomery's book The Strategist
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