In working with leaders, I also realized how vitally important creativity is in strategy. It takes the whole brain—intuition and analytic skills—to do it well. But creativity isn’t considered very important in the culture that has grown up around strategy. That has to change.
S+B: What does strategy work look like when it is action-oriented?
MONTGOMERY: Let’s say you’re a business leader, and you have an idea for your business. That’s just the beginning. You have to articulate it, choose to invest in it, and create the organizational context where people can bring it [to life]. That means building a system of advantage—a business model tailored to that purpose, where the pieces work in sync, and where the whole is more than the sum of the parts. Done well, it turns a concept into an animating idea: A clear view of what your company will bring to the world, why it will matter, and how you will do it. A lot of those hows will be determined by others throughout the organization, but that can’t happen unless there’s clarity at the core.
Look at a business like Ikea, which I wrote about in The Strategist. The founder, Ingvar Kamprad, stated his animating idea back in the 1940s. They would offer a line of practical, well-designed furnishings at prices so low everyone could afford them. When you walk into an Ikea store, every detail goes back to that idea. It’s not in a document on a desk; it’s the energy that gives life to the company. Ikea’s system of advantage, built around that idea, is one of the company’s most important resources. Anders Dahlvig, former group president, put it this way: “Many competitors could try to copy one or two of these things. The difficulty is when you try to create the totality of what we have.” For instance, copying the low prices would not work without copying their approach to sourcing, their flat-pack distribution concept, the way they design their stores and catalogs, and their Scandinavian furniture design—“which is not easy,” he says, “without a Scandinavian heritage.”
S+B: Ikea has essentially one business. Can a multi-business, diversified company also be built around an animating idea?
MONTGOMERY: Certainly. One of my favorite examples comes from Apple. In 2001, when Steve Jobs had only been back at the company for a couple of years as CEO, he gave a presentation at the Macworld Expo in which he talked about the three ages of the PC. First came the age of productivity, then came the age of the Internet, and now would be the age of the digital hub. He talked about MP3 players, cell phones, and digital cameras, which at the time accounted for only 15 percent of all camera sales, but, “in a couple of years,” he said, “it will be 50 percent.” Going forward, Apple would add value to a host of digital devices, and be the company whose computers would tie them all together.
Some people argue that a strategy is understood only in hindsight, retrospectively trying to make sense of a group of haphazard, reactive moves. But here’s a case where, when the stock price was still very low, Steve Jobs laid out his animating idea in public, in advance. When Apple came out with iTunes, the iPod, and the Apple Store, it all made sense in light of that idea.
S+B: In The Strategist you write that people respond to this story by saying, “Sure, but I’m not a genius like Steve Jobs.” Does a good strategist have to be a genius?
MONTGOMERY: Jobs is widely praised as a genius today, but one of the things I appreciate most about him is his failures—the Lisa computer at Apple and the ego-busting demise at NeXT, the startup Jobs founded when he was ousted from an operating role at Apple. When you dive into that story, you can see that his victories were hard won. I’m trying to get people excited about being strategists and to see why it’s a distinctive way that they as leaders can add value to their businesses. I’m also trying to help them understand that strategy is far more than an idea. There’s a conundrum you sometimes hear in business school: “Would you rather have a brilliant, fully worked-out strategy and poor execution, or a half-baked strategy well executed?” The point is supposed to be that good execution is preferable every time. At least it gets you some results. But, at root, it’s a vacuous question. How can you implement the hell out of something if you don’t know what you’re trying to accomplish?