My favourite bon mot from Richard Rumelt, the UCLA strategy expert whose interview fuelled my column this week, was his comment that in any boardroom discussion of strategic options, acquisitions should be “guilty until proven innocent”.
Prof Rumelt’s new book Good Strategy/Bad Strategy makes clear he is no fan of M&A. “The problem with engineering growth by acquisition,” he writes, “is that when you buy a company, especially a public company, you usually pay too much.”
J.C. Penney, the department store chain, has pulled a fast one by nabbing Ron Johnson, head of Apple’s retail stores as its next chief executive.
The runaway success of Apple’s stores, despite early predictions that they would go the way of other capital-intensive efforts by product manufacturers to reach consumers, have prompted many imitations but none have worked as well.
Few terms of corporate art are more abused than “strategy” and its cousins. Put “strategic” ahead of simple decisions (strategic acquisition, strategic initiative, strategic hiring) and the people carrying them out can feel more important, while those advising can charge a higher fee.