Opening Strategy! In their work, Chesbrough
& Appleyard (2007) discussed emerging anomalies that are challenging the
traditional business strategy process. The conventional business strategy
approach was based on Porter's forces whereby firms create barriers and closure
against new entrants to maintain competitiveness.However, recent events concerning
modern businesses show no sustainable competitive advantages in industries but
a continuous need for proficient business innovation and strategy (McGrath, 2013).
As technology, competitors, and customers’ needs changes, the competitive
advantage erodes and disappears. However, to maintain or sustain
competitiveness, organizations must innovate with agility and a dynamic
approach to the strategy processes to meet varying market demands (Doz &
Kosonen, 2008).To this end, firms are beginning
to pattern their business strategy and innovation using the open strategy
approach in value creation with some success (Teece, 2010; Luedicke et al.,
2017).Opening strategy and
CompetitivenessThe effect of this pattern is
readily seen in the way technology-based firms are disrupting traditional
businesses in gaining market and customer satisfaction in multiple sectors
through input from internal and external stakeholders.
Image
by Braden Collum For instance, TikTok,
an Internet company, draws its business strategy from its user’s
feedback and engagement. By maximizing data analytics, the company understood
what features to add to their product to meet their customers’ needs by allowing
an external environment in which they do not have control
over interacting with their product offering and balancing this with the
company's internal stakeholders' engagement and strategic foresight. The firm
now commands market share in communications, marketing, and media.
An organization with a
traditional strategy approach will become obsolete, like a video cassette
player, if the organization does not innovate!
Nokia corporation's failure is an
example of strategy failure. According to Vuori & Huy’s (2016) Investigation, Nokia's failure was
due to closure in the strategy process; their investigation revealed
internal politics and fear culture between the top-level executives and middle
managers that stalls quick reaction to strategic decision-making and implementation.
They concluded that the “middle managers’ internally focused fear reduced their
tendency to share negative information with top managers, leading top managers
to develop an overly optimistic perception of their organization’s
technological capabilities and neglect long-term investments in developing
innovation.” Nokia's failure might not have occurred if the company had
followed an open strategy process with internal and external transparency in
strategy formation, especially in allowing other mobile phone makers to use
their Symbian OS.
By using an ‘open strategy’
approach to Innovation, organizations are beginning to be pragmatic in their
business and corporate strategy against the traditional defensive system based
on the porters' Forces.
The open Strategy approach is not
a finite process and also, and it is against the mainstream traditional belief
that strategy is traditionally exclusive, i.e., it is the job of the chief
executives (Andrews, 1971; Montgomery,2008). Also, that strategy should be a trade
secret! (Whittington et al., 2011). well, NOT ANYMORE.
I founded trackboardapp.
Trackboard is a strategy development platform that helps businesses and
institutions create and implement their organizational and business strategic
goals at scale and transparently.
References
Andrews, K. R. (1971). The
Concept of Corporate Strategy. Homewood, IL: Irwin.
Chesbrough, H.W. and Appleyard,
M.M., 2007. Open innovation and strategy. California management
review, 50(1), pp.57-76.
Doz, Y.L. and Kosonen, M.,
2008. Fast strategy: How strategic agility will help you stay ahead of the
game. Pearson Education.
Luedicke, Marius K., Katharina C.
Husemann, Santi Furnari, and Florian Ladstaetter. "Radically open
strategizing: how the premium cola collective takes open strategy to the
extreme." Long Range Planning 50, no. 3 (2017): 371-384.
McGrath, R.G., 2013. The end
of competitive advantage: How to keep your strategy moving as fast as your
business. Harvard Business Review Press.
Montgomery, C. (2008). ‘Putting
leadership back into strategy’, Harvard Business Review, 86, pp. 54–60.
Teece, D.J., 2010. Business
models, business strategy, and innovation. Long range
planning, 43(2-3), pp.172-194.
Vuori, T.O. and Huy, Q.N., 2016.
Distributed attention and shared emotions in the innovation process: How Nokia
lost the smartphone battle. Administrative Science Quarterly, 61(1),
pp.9-51.
Whittington, R., Cailluet, L. and
Yakis‐Douglas, B., 2011. Opening strategy: Evolution of a precarious
profession. British Journal of Management, 22(3), pp.531-544.
For instance, TikTok,
an Internet company, draws its business strategy from its user’s
feedback and engagement. By maximizing data analytics, the company understood
what features to add to their product to meet their customers’ needs by allowing
an external environment in which they do not have control
over interacting with their product offering and balancing this with the
company's internal stakeholders' engagement and strategic foresight. The firm
now commands market share in communications, marketing, and media.
An organization with a
traditional strategy approach will become obsolete, like a video cassette
player, if the organization does not innovate!
Nokia corporation's failure is an
example of strategy failure. According to Vuori & Huy’s (2016) Investigation, Nokia's failure was
due to closure in the strategy process; their investigation revealed
internal politics and fear culture between the top-level executives and middle
managers that stalls quick reaction to strategic decision-making and implementation.
They concluded that the “middle managers’ internally focused fear reduced their
tendency to share negative information with top managers, leading top managers
to develop an overly optimistic perception of their organization’s
technological capabilities and neglect long-term investments in developing
innovation.” Nokia's failure might not have occurred if the company had
followed an open strategy process with internal and external transparency in
strategy formation, especially in allowing other mobile phone makers to use
their Symbian OS.
By using an ‘open strategy’
approach to Innovation, organizations are beginning to be pragmatic in their
business and corporate strategy against the traditional defensive system based
on the porters' Forces.
The open Strategy approach is not
a finite process and also, and it is against the mainstream traditional belief
that strategy is traditionally exclusive, i.e., it is the job of the chief
executives (Andrews, 1971; Montgomery,2008). Also, that strategy should be a trade
secret! (Whittington et al., 2011). well, NOT ANYMORE.
I founded trackboardapp.
Trackboard is a strategy development platform that helps businesses and
institutions create and implement their organizational and business strategic
goals at scale and transparently.
References
Andrews, K. R. (1971). The
Concept of Corporate Strategy. Homewood, IL: Irwin.
Chesbrough, H.W. and Appleyard,
M.M., 2007. Open innovation and strategy. California management
review, 50(1), pp.57-76.
Doz, Y.L. and Kosonen, M.,
2008. Fast strategy: How strategic agility will help you stay ahead of the
game. Pearson Education.
Luedicke, Marius K., Katharina C.
Husemann, Santi Furnari, and Florian Ladstaetter. "Radically open
strategizing: how the premium cola collective takes open strategy to the
extreme." Long Range Planning 50, no. 3 (2017): 371-384.
McGrath, R.G., 2013. The end
of competitive advantage: How to keep your strategy moving as fast as your
business. Harvard Business Review Press.
Montgomery, C. (2008). ‘Putting
leadership back into strategy’, Harvard Business Review, 86, pp. 54–60.
Teece, D.J., 2010. Business
models, business strategy, and innovation. Long range
planning, 43(2-3), pp.172-194.
Vuori, T.O. and Huy, Q.N., 2016.
Distributed attention and shared emotions in the innovation process: How Nokia
lost the smartphone battle. Administrative Science Quarterly, 61(1),
pp.9-51.
Whittington, R., Cailluet, L. and
Yakis‐Douglas, B., 2011. Opening strategy: Evolution of a precarious
profession. British Journal of Management, 22(3), pp.531-544.