Published by:
MIT Sloan School of Management
Length: 3 pages
Data source: Field research
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Abstract
In today''s world, it seems, people want to characterize every utterance and action as strategic, as if the simple addition of the adjective elevates the importance and quality of the thinking. It is rather dismaying, though not surprising, then, that few executives who so frequently use the word have a clear idea of what strategy is or is not.
There is a heavy price to pay for mistaking components of strategy for strategy itself, or misreading the strategic effect of components. The pharmaceutical industry, for example, is going through a process of profound transformation and intense negative reaction to its marketing activities. Part of the reason for that has been the lack of strategic thinking around the deployment of direct-to-consumer advertising. While claims can be made for the business value of DTC at a tactical level, the strategic effect of spending nearly $5 billion a year on consumer promotion of prescription medicine has been to open the industry to scrutiny and sanction. Nearly every major drug company active in the United States is facing multiple federal and state investigations into its business practices. Tactical success does not necessarily yield successful strategic performance. The fundamentals driving transformation in the pharmaceutical industry are the same forces reshaping the music industry, the marketing services industry, military planning and society generally. In all aspects of life and culture, the conventional notions of ''boundaries'' have lost meaning. This has important implications, Google Inc is an example of a company that understands how to work with this dynamic. We can no longer be content with building an ''enterprise-wide'' network that stops within the edges of a company''s assets or sources of information. Stand-alone ''tactical'' strategies are insufficient for this new era. In such a world, it is more important than ever to remember that strategy operates at a systemic level and that the intellectual framework for strategic thinking flows from a holistic perspective that is more art than analysis.
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Abstract
In today''s world, it seems, people want to characterize every utterance and action as strategic, as if the simple addition of the adjective elevates the importance and quality of the thinking. It is rather dismaying, though not surprising, then, that few executives who so frequently use the word have a clear idea of what strategy is or is not.
There is a heavy price to pay for mistaking components of strategy for strategy itself, or misreading the strategic effect of components. The pharmaceutical industry, for example, is going through a process of profound transformation and intense negative reaction to its marketing activities. Part of the reason for that has been the lack of strategic thinking around the deployment of direct-to-consumer advertising. While claims can be made for the business value of DTC at a tactical level, the strategic effect of spending nearly $5 billion a year on consumer promotion of prescription medicine has been to open the industry to scrutiny and sanction. Nearly every major drug company active in the United States is facing multiple federal and state investigations into its business practices. Tactical success does not necessarily yield successful strategic performance. The fundamentals driving transformation in the pharmaceutical industry are the same forces reshaping the music industry, the marketing services industry, military planning and society generally. In all aspects of life and culture, the conventional notions of ''boundaries'' have lost meaning. This has important implications, Google Inc is an example of a company that understands how to work with this dynamic. We can no longer be content with building an ''enterprise-wide'' network that stops within the edges of a company''s assets or sources of information. Stand-alone ''tactical'' strategies are insufficient for this new era. In such a world, it is more important than ever to remember that strategy operates at a systemic level and that the intellectual framework for strategic thinking flows from a holistic perspective that is more art than analysis.