Let’s talk strategy. The history of strategic management began when companies had to deal with strategic choices, products and service scope, geographic choices, positioning on the market place, and organization design. It all began in B-schools, and was known as Business Policy when it was first taught at HBS in the 60s, designed to integrate all other courses in the second year. A number of scholars had influenced the topic of strategic management, including the following:
- Taylor’s principles of scientific management
- Robinson and Chamberlin’s economic theories of imperfect competition
- Schumpeter’s creative destruction
- Cyert and March’s behavioral theory of the firm
The birth of strategic management can probably be credited to the following three scholars who collectively shaped generations of CEOs, business professors and strategists:
- Chandler on strategy and structure
- Ansoff on formal strategy planning
- Andrews on linking external opportunities to distinctive competencies
And there are many other management thinkers who contributed heavily to the development of the domain, including Mintzberg, Drucker, Porter, Quinn, and a few others who deserved to be mentioned.
So, where is strategic management today? How is technology shaping the future of strategic management? Digital technologies are shaping the next wave of digital-industrialization, but the impact is yet to be fully felt. Many Fortune 500s will disappear in the future and many new ones will emerge even less managed by people. These multibillion-dollar corporations will run themselves without the constant need for managers, using them only when necessary – in other words, Uber Executives. Who needs strategic management when artificial intelligence is here?
According to Augier and Keiner, at the core of the behavioral theory of the firm is the conceptualization of the firm as an adaptive political coalition. Therein, organizations are seen as goal-oriented and rule-based systems that adapt incrementally to past experience. This basically states that strategies are mostly incremental, and any game changing scenarios are not part of our institution’s memory. Now you understand why innovation so hard.
Even the most long-range forecast is drastically underestimating the power of digital technologies. We will experience 30 years worth of progress within the next 10 years, and suddenly the world will look very different. Companies will have a tri-mandate:
- Finding growth as product lifecycles continue to be compressed or business model expired.
- To reduce cost even for growth-oriented companies.
- The complete re-platforming of enterprises so that they are upgradeable and agile enough to handle the speed of change.
To deliver on all of these mandates may seem impossible for many, but winners will have to do it. Strategic management will have to redefine itself in the world of cognitive computing, virtual reality, robotics with artificial intelligence, and machines that are creative, intelligent, and even empathetic enough to make important corporation decisions – with or without humans.