Montgomery’s Lecture-Based Business Strategy

Introduction

The book titled “The strategist: Be the leader your business needs” was written by Cynthia A. Montgomery – a renowned professor in the field of business administration at Harvard Business School. It was published in 2012, by Harper Collins Publishers. The book is largely based on course materials that Montgomery uses in her business class and borrows heavily from works of famous theorists such as Michael Porter, and his article that connects strategy to the Five Forces (Montgomery, 2012). The book is not written academically, as the author purposefully moves all references to the back of the book, to prevent them from cluttering reading and freeing up space. Thus, it is not written strictly for academic purposes, but with practicing businesspersons as the primary audience in mind.

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Central Theme

So, who is a strategist? A strategist is a leader within a company or an organization, who ensures its survival by coming up with measures and strategies that help a company adapt and maintain its leading positions and competitive edge. The author combines both strategy and execution to mold them into a combined process, rather than two separate ones. Long-term organizational success is based on the presence of both, rather than on the focus of one.

The author identifies the central theme of her book in the opening introduction section. In it, she describes the current situation in business planning and strategic departments, which were heavily influenced by Porter ever since his conception of the Five Forces and the top-down model of decision-making. Theory and practice of strategic planning have moved far from what they used to be, gaining from multiple theories and conceptions that were invented during the past few decades. However, as the author states, strategy and planning became detached from reality and became mental exercises rather than legitimate practices. This is not Porter’s fault, as he never suggested strategic management becoming a detached formality. His ideas, however, inexplicably lead to such a warped understanding. In other words, many modern companies are just playing strategy, completing countless SWOT analyses, and holding meetings, the conclusions of which never got beyond the door. The key chain link between theory and practice is the person – the strategist. The book focuses on the role of a strategist in business.

The strategy is a constant, ever-changing process. The author stresses out that change within an organization must be maintained if they wish to remain competitive – otherwise, their competitors will quickly outclass them. The strategist has a paramount role in this process – he or she must identify the purpose for change, plan it out, and lead the organization through it. To maintain ongoing relevancy, the strategist has to align the company’s purposes with the goals of planned change. To quote the author on this subject, “whether there is a purpose and whether that purpose is viable is a leader’s first responsibility” (Montgomery, 2012, p. 43).

Main Arguments of the Book

The book offers several main arguments to support its views. These arguments are:

  • Formulation and implementation of effective purposes. This is a very important argument, and the author stresses it out at the beginning of the book. A good purpose is a commitment to a course of action. From here, it can go two ways – either it will succeed or fail. However, with a company purpose never becoming a reality and moving beyond being a simple and worthless theoretical concept, the company is bound to fail sooner or later. A good and effective purpose distinguishes a company from its competitors and allows for multiple innovations.
  • Strategy as a system of value creation. This is one of the core principles of highly-efficient companies. A sense of purpose is a key factor in employee motivation. Employees must have a sense that they are a part of something bigger. It helps create value for the company. A motivated employee is an efficient employee, which greatly increases both the speed and the quality of their labor.
  • Avoiding stagnancy the trap of success. Montgomery quotes Picasso on this one, stating that “success is dangerous. One begins to copy oneself, and to copy oneself is more dangerous than to copy others. It leads to sterility” (Montgomery, 2012, p. 126). She states that continuous change and growth is important, as it allows a company to maintain its competitive edge. Companies that refuse to adapt and evolve will die, even if they were very successful in the past. This message is reflected in many other books and lectures, and was demonstrated in reality. The fate of Smith Corona is a textbook example of a successful and prosperous company falling into the trap of success. They used to be a company that produced the best typewriters in the world. Before the age of computers, they had a position of power over the market – any competing or innovative concept they were able to either squash or buy off. They failed to adapt to the changes in the market and acknowledge the rising digital computer industry and went bankrupt in 1995.

To demonstrate all these points, Montgomery uses several large successful companies as case studies. These companies are Apple, Masco, Gucci, and IKEA. All four companies have their differences and their similarities. The case with Gucci is important as it is a story of a company’s rise and fall, IKEA represents how inventing a new product to cater to an undiscovered market segment can make a company into a giant, and Apple is a classic story of success that was retold time and time again. When talking about company purpose, value creation, and stagnancy avoidance, Apple is used as an example in every textbook that relates to management. Perhaps, that is why the argument built around Apple as an example lost its impact a little because it is so overused.

The strengths of the book lie in the relative simplicity of word use and terminology, as well as in strong theoretical backup. The beginning of the book could be considered a beginning course in Michael Porter’s theory of Five Forces, the points are well-illustrated, using successful international companies as examples and demonstrating the thought process behind the strategies that lead them to success or failure. Cynthia Montgomery is a well-accredited and internationally-acknowledged professor and theorist, which only adds to the credibility of her writing.

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Weaknesses of the Book

There are stronger weaknesses to the book than just that, of course. In this critical analysis, let us start with the beginning. Although Mongomery eventually shifts her book into a critique of Porter-based positional management view of strategy, the first 75 pages or so cite him on every turn. It is probably done to give the reader a good perspective of what system is currently in place, but it takes just too long. This would not have been that much or a problem, had there been no quote at the beginning, saying that “you’re about to get a revisionist view of strategy. It is not that what you’ve learned is incorrect, it is incomplete” (Montgomery, 2012, p.4) It sets up the mood for groundbreaking and exciting knowledge, which the reader does not get until much further into the book. At first, I felt that the title and the premise are misleading, until later pages.

Another weakness of the book is that, despite its initial claims at focusing on the strategist, it does not go in-depth about the role of strategy within a company. It focuses much on the case studies and shows the events from perspectives of high-tier managers, such as CEOs, managers of the business, and so on. They do not show a strategist being a manager, but rather a manager being a strategist at the same time.

Lastly, in my research, I found out that the topic of Montgomery’s book is not as ground-breaking as it initially seems and how the author makes us believe. Similar points were brought up in other books, such as “Start with Why” by Simon Sinek, which too focused on finding your company’s identity and using it as a foundation to build a business. The book was published in 2009. While this is not a direct “weakness,” as many books build upon one another’s ideas, I expected a reference, but there was none.

Main Takeaways

The book is not written as a “How-to” manual, and Montgomery does not spoon-feed any conclusions more than she should. Doing so would undermine the entire purpose of the book. As a strategist, the reader is supposed to analyze facts and helpful examples and adjust them to his or her situation. Providing the user with a “cheat sheet” containing a generic list of instructions to follow. There is a problem with such a format – the instructions would be either too specific to fit a different kind of scenario, or too general to be of any use as they would be interpreted in many ways.

Instead, Montgomery, through examples of four companies, illustrates the thought process and the role of a manager as a strategist. By understanding this process, the reader would be able to apply it to his or her situations, and make adjustments, if necessary. The book also provides a good, if a bit lengthy, theoretical base, getting the readers acquainted with both the positional model of Michael Porter and her resource model, which is suggested in the book.

To summarize, the book answers why strategy is important, why different types of strategies are specific to their industries, and why should it be dynamic. The book gives a basic course on business strategy, which could be useful for people who never read any theoretical material on strategy before. As it was said, the book is based on Montgomery’s lectures, which is why it is best suited for readers with plenty of practical knowledge but not enough theory to back it up.

Reference

Montgomery, C.A. (2012). The strategist: Be the leader of your business needs. New York, NY: Harper Collins Publishers.

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