Is strategy dead? Chief strategy officers will deny it. Some strategy consultants may reject the idea, too. But, right now, markets are unpredictable. The economic outlook is uncertain. The world has changed. If old-style strategy formulation is not exactly dead, then it is hardly in the best of health.

For months, many leadership teams have had only one strategic goal in mind: survival. Grander visions have been filed away or forgotten. This hedgehog-style approach – roll up into a ball and wait until things are less scary – may keep a company alive temporarily, but does little to prepare it for the future.

Analysis by Boston Consulting Group suggests that corporate hibernation only works if recessions are short, if the outside world goes back to the way it was before, and if all your competitors are equally inactive, tucked up for the economic winter. In 2009, not one of these conditions applies.

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David Rubenstein, co-founder of Carlyle Group, the private equity firm, said last week that his industry ought to consider adopting a new name to describe what it does more accurately. How about “change capital”, he suggested. I am not sure that this is a good idea. If Mr Rubenstein thinks the word change will be less provocative than private equity, then he is likely to be disappointed.

Change is everywhere in business, and people tend not to be very happy about it. But it is not just nostalgia, or laziness, that causes the negative reaction. Change is rarely managed well.

What do managers get wrong about change? There is quite a long list. They underestimate how long it will take to get people to accept change. They fail to recognise how difficult it is to spread the message that change may be necessary or unavoidable. They do not understand what change feels like beyond the boardroom or the top management table. And, having finally got the organisation to accept the need for change, they forget to explain that the new direction or mission may change again, and possibly quite soon.

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The other night, I asked my youngest child what he thought about his new secondary school. He considered the matter and then said: “It’s not very chilled.”

Continue reading "Why ‘chillaxing’ isn’t cool"

Like the rain, recessions fall on the just and the unjust, and on people of all ages. But not every age group will face the same problems or react to them in a similar way.

Some pundits are predicting that, in the coming age of austerity, the workplace will be the setting for intergenerational conflict. Tensions over unequal pension arrangements or varying attitudes to work may cause trouble.

Others argue that now is the time to invest in youth. My colleague Luke Johnson last week recommended hiring “as many bright young things as you can afford”, in the hope that “their dynamism will counteract the inevitable conservatism of an existing institution”.

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• Cabinet to slims down for Sarkozy - Lucy Kellaway wrote about the balance between private health and employers earlier this week, but I’m not sure how many managers can get away with this. I especially liked his apparent suggestions he “told at least one would-be appointee to drop some weight and change his hair style if he wanted the job”
• Google paid a $1bn premium for YouTube - an interesting admission from Eric Schmidt, CEO of Google, that the company paid $1bn more for YouTube than it was worth simply to make sure no one else could outbid it (Hat tip: The Browser)
• Success stories in bad times - Ok, so the headline writer employed a bit of hyperbole (do Twinkies qualify as a success?) and it’s a bit US focused but chocolate chip cookies are certainly a silver lining to any recession

An issue that has troubled me for some time is the clash of generations under way at the top of so many organisations. It is not just the usual strife between ambitious youngsters and older incumbents waging a rearguard action to maintain their grip on power. Rather, this conflict reminds me of the battles between young and old in the 1960s over the Vietnam war, and the gulf of misunderstanding between them.

Continue reading "Generation game redefines business"

Do we need to think again about globalisation in the wake of the financial crisis? Almost certainly yes. One of the few good things about the crisis is that it should have made fresh thinking possible.

Continue reading "How to compete in an upside down world"

Today sees the publication of CK Prahalad’s update of  The Fortune at the Bottom of the Pyramid, his book originally published in 2004 that argued that businesses could eradicate poverty and earn profits at the same time.

Stefan Stern will be writing his column on some of Prof Prahalad’s key ideas next week. Until then, you might want to check out the ‘bonus section’ on the website above.