Books Read: “Strategic Management in the Innovation Economy”, Davenport, Leibold, Voelpel   Leave a comment

It can be argued that we have moved on from a knowledge economy to a creative/innovation economy. If this holds true, then a new approach to strategic management is required.

Thus the concept of “poised strategic management” as opposed to the traditional analytical and mechanistic approaches to strategic management.

This book is a refreshingly new look at strategic management and squarely demonstrates its timeliness.

To give you a sense of what the book covers, here are the parts of the book:
– The innovation economy and strategy
– The changing nature of business and challenges to strategic management
– A new strategy mindset for the innovation economy
– Strategy, business models and organisational energy
– New strategic management processes and tools
– Strategy leadership and management in the innovation economy

Here’s some quotes from the book:
– “strategic management in the innovation economy requires a new mindset, rooted in a systemic (networked, interactive) view & not a traditional (mechanistic) value-chain, industry-bound, or an existing (physical, internal) resource capability orientation”
– “companies have felt that workers needed them more than they needed workers. This is changing in ways that most companies still do not seem to grasp” (Drucker)
– “a firm’s real competitive advantage is both its contribution to the ecosystem & systemic enterprise, & acting as an essential ‘attractor’ shaping & influencing ecosystem patterns of behaviour”

Further, here’s their 4 key requirements for management in the innovation economy:
– foresight and insight
– co-creating mentality
– broad innovation
– ability to effect cultural change & unleash energy in organisations

And the 4 challenges to the conventional strategic management wisdom:
– the shift from visible assets & invisible customers to invisible assets & visible customers
– the displacement of horizontal & vertical organisations with networks of intrafirm, extrafirm & interfirm relationships
– change of focus from analytic deconstruction of competition & markets to holistic construction & collaboration for innovative value
– descriptive & reactive mindsets shifting to creative & proactive mindsets

So, what is “poised strategic management”? It is: “the management of multiple business models for sustaining and disruptive value innovation in collaborative business networks”.

Comparing the two models of strategy development:
Traditional Strategy Process
– situation analysis
– strategic analysis & strategy pointers
– strategy formulation
– strategy implementation and change
Holistic (poised) Strategy Process
– sense-making of business ecosystems
– business model re-invention: processes & tools
– business model & strategy options
– strategy thrusts
– enabling continuous business model & strategy fitness: capabilities & methods

The approach, while new to me, of “Organisational Fitness Profiling” seems to be the right one for ascertaining the organisations potential performance using poised strategic management. It comprises of organisational levers and capabilities:
– organisational levers
  – leadership team
  – work system
  – management processes
  – human resources system
  – principles & culture
  – corporate context
– capabilities
  – co-ordination
  – competence
  – committment
  – communication
  – conflict management
  – creativity
  – capacity management

So, at its heart this poised strategy management approach is about undertaking both incremental innovation and disruptive innovation. Its the ability to handle convergent thinking (the assumption of continuity) and divergent thinking (broadening the context of decision making).

So, how does this apply to me? Its both looking to maintain the status quo & keeping a watch, with the option to embrace, disruptive technology.

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