Gary Hamel: the search for a new strategic platform.
Hamel's reputation developed from the early 1990s when, with C. K. Prahalad, he began to communicate his revolutionary views on strategy, in the process creating the concepts of organisational core competences, strategic intent and strategic architecture.
Gastric upset is at least as likely to produce a strategy insight as attendance at another interminable planning meeting.
Strategy innovation and the quest for value, by G. Hamel, Sloan Management Review, Winter 1998, p. 10.
Life and career
Hamel worked as a hospital administrator until 1978, when he began to study for a PhD in international business at the University of Michigan. While there, he met C. K. Prahalad, who later became his mentor, collaborator and colleague in research, writing and business. Hamel first came to prominence through journal articles in the early 1990s, and as the co-author of the 1994 book Competing for the Future, written (like most of the articles) with C. K. Prahalad.
Now at the forefront of thinking on strategy, Hamel is visiting Professor in Strategic and International Management at London Business School, distinguished Research Fellow at Harvard Business School, and chairman of Strategos Inc., the strategy services company he set up with Prahalad in 1995.
Why a new approach to strategy?
At the beginning of the 1980s, Hamel argues, organisational development was no longer driven by strategic forces but by incrementalism. Companies were concerned with getting bigger and better through downsizing, delayering, reengineering and continuous quality improvements, and the goal of companies became to mimic best practice. The result of all these incremental improvements was to squeeze cost efficiencies to the point where there was nothing left to gain.
At the same time, there were various new forces at work that were changing the nature of competition and the base of traditional industries which had enjoyed primacy in the past. These forces included:
* deregulation and privatisation, particularly in the airline, telecommunications and financial services sectors
* blurring, fragmentation and growth of newcomers to the computer and telecommunications industries
* changing customer expectations in terms of price, quality and service
* discontinuous technological growth, particularly with the Internet
* shifting boundaries of control and authority, as workforces become more widely distributed, more empowered and less layered
* changes in traditional loyalties, as people became simultaneously the most valuable, but also the most expendable, asset
* the lowered value of experience, as change undermines its relevance for the future.
Strategic questions to address
Hamel argues that a compelling view of the future is necessary if one is not to be tied to the orthodoxies of the past, and highlights the number of companies that lost money because they stuck too long to the same game instead of trying to get ahead of the game. While no view of the future can be accurate or perfect, a view of some sort is essential, and can be developed through addressing questions about how it would be possible to unleash the corporate imagination; turn technicians into dreamers; turn planners into strategists; and create an organisation that really lives and makes its decisions in the future.
In a 1996 article in the Strategic Management Journal, Hamel agrees that, while we can all recognise a great strategy once it is proven as successful in action, we find it difficult to generate a great strategy in the first place. He argues that strategy generation is not a purely analytical process, but is multi-faceted, and involves risk, gut feel, intuition and emotion, as well as analysis. ('Competing in the new economy: managing out of bounds', with C. K. Prahalad, vol 17, pp 237-242.)
Strategy as core competence
The concept of corporate competencies was highlighted by Hamel and Prahalad in journal articles and in the book Competing for the future. In the latter, they argued that, for too long, the organisational focus had been on the returns from individual business units as opposed to the conditions, processes and competencies which enabled those returns. Hamel and Prahalad define `core competencies' as the collective learning in the organisation and, especially, the co-ordination of diverse production skills and integration of multiple streams of technologies. Hamel and Prahalad ask organisations to look upon themselves as portfolios of core competencies by analysing what it is that they do better than others. Viewing the organisation as systems of activities and building blocks means asking:
* How does activity X significantly improve the end product for the customer?
* Does activity X offer access to a range of applications and markets?
* What would happen to our competitiveness if we lost our strength in activity X?
* How difficult is it for others to imitate activity X and compete with us?
In order to realise the potential that core competencies create, the organisation's people must have the imagination to visualise new markets and have the ability to move into them, ahead of the competition. One of the keys to core competencies and effective competition is, therefore, the process through which an organisation releases corporate imagination. And one of the words that recurs increasingly through Hamel's writing is revolution.
Strategy as revolution
In a seminal Harvard Business Review article, `Strategy as revolution' (Harvard Business Review, Jul/Aug 1996, vol 74 no 4, pp 69-82), Hamel sets out ten principles which strategy generators should bear in mind:
1. Strategic planning is not strategic: rather, it is a calendar-driven ritual, involving plans and sub-plans, instead of something challenging and innovative that might lead to discovery.
2. Strategy making should be subversive: great strategies come from challenging the status quo and doing something different. Anita Roddick, of the highly innovative Body Shop, is quoted as saying; "I watch where the cosmetics industry is going and then walk in the opposite direction".
3. The bottleneck is at the top of the bottle: the most powerful defenders of strategic orthodoxy are senior management, and strategy making needs to be freed from the tyranny of their experience.
4. Revolutionaries exist in every company: let everyone have their voice, so that new and young as well as tried and tested contributors are part of strategy making.
5. Change is not the problem--engagement is: people will support change, and will welcome the responsibility for engendering it, if this gives them some control over their own future.
6. Strategy making must be democratic: the capability for strategic thinking is not limited to senior people, and it is impossible to predict where a good, revolutionary idea may be lurking.
7. Anyone can be a strategy activist: people who care about their organisation do not wait for permission to act.
8. Perspective is worth 50 IQ points: subversive strategy means gaining a new perspective on the world, and looking at potential markets through new eyes, a new lens.
9. Top-down and bottom-up are not alternatives: if top-down can achieve unity of purpose amongst the few involved, bottom-up will bring diversity of perspective. Bring the two together.
10. You can't see the end from the beginning: surprises do not appeal to everyone, but delving into discontinuities and identifying potential competencies will bring about unpredictable outcomes. These will probably not fit the orthodox strategic mould--but strategy making is about letting go.
So how do we begin to put these principles into a framework for creating strategy as a systemic capability?
Strategy innovation is the only way for newcomers to succeed in the face of enormous resource disadvantages, and the only way for incumbents to renew their lease on success.
Strategy innovation and the quest for value, Sloan Management Review, Winter 1998, vol 39, no 2, pp 7-14.
While some strategies result from analysis and others from inspiration and vision, many strategies also evolve and emerge. To achieve strategies that are neither too random nor too ordered or ritualistic, Hamel suggests we look to the roots of strategy creation, which he regards as a relatively simple phenomenon amidst the complexity of organisational life. In `Strategy, innovation and the quest for value' (cited above), Hamel turns his revolutionary principles into action points and urges organisations to adopt a new stance, through:
* New Voices--top management relinquishing its hold on strategy, and introducing newcomers; young people and people from different groups bring richness and diversity to strategy formulation
* New Conversations--the same people talking the same issues over and over again leads to sterility; new opportunities arise from juxtaposing formerly isolated people
* New Passions--people will go for change when they can steer it and benefit from it
* New Perspectives--search for new ways of looking at markets, customers and organisational capabilities; think different, see different
* New Experiments--small, low-risk experiments can accelerate the organisation's learning and will indicate what may work and what may not.
While it is not possible to pigeonhole Hamel, we can place him roughly in the progressive (if sometimes ragged) line of strategic thinking stretching back to Chandler and Ansoff, and including Porter and Mintzberg, as well as Hamel's collaborator and colleague Prahalad. Hamel's curiousity and tendency to challenge the status quo preclude the possibility of certainty about where his future research interests may take him next. He is likely, however, to continue to move in tune with, if not ahead of, the rapidly changing business environment. His recent book, for example, Leading the Revolution is about throwing away the old rule book, imagining a future that others have not seen, and then taking the initiative to act on it.
Leading the revolution Boston, Mass: Harvard Business School Press, 2000
Strategic flexibility: managing in a turbulent environment Chichester: John Wiley, 1998
Alliance advantage: the art of creating value through partnering, with Yves Doz Boston, Mass: Harvard Business School Press, 1998
Competing for the future, with CK Prahalad Boston, Mass: Harvard Business School Press, 1994
Hamel has co-authored or authored many articles. Key examples are mentioned in the text above, and a few more are given below.
Strategy as stretch and leverage, with C. K. Prahalad, Harvard Business Review, Mar/Apr 1993, vol 71 no 2, pp 75-84
The core competence of the corporation, with C. K. Prahalad, Harvard Business Review May/Jun 1990, vol 68 no 3, pp 79-91
Related thinkers: C. K. Prahalad
Related Checklists: Strategic planning
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|Date:||Dec 1, 2000|
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