Highly acclaimed author of ‘Exploring Strategy’ Professor Gerry Johnson hosted a thought-provoking masterclass at the 3M BIC on 21 June where he shared his insights into how successful businesses can often fail.
Gerry’s masterclass was designed for CEOs, MDs, business owners and managers within organisations and focused on why successful businesses seem to fail, discussing the downfalls of several well-known brands that no longer exist or have scaled back their operations.
Gerry is Professor of Strategic Management at Huddersfield Business School, and in addition to his academic career, spent many years as a consultant working with senior leadership teams at big companies to support accelerated business growth. His ‘Exploring Strategy’ book first published in 1989, is now in its 12th edition.
Gerry discussed the importance of value creation from competitive advantage and the VRIO (Valuable, Rare, Inimitability, Organisational embeddedness) process, how businesses need to create something that’s different and difficult to imitate in order to succeed. He also explained the difference between Cost Leadership and Differentiators when it comes to reducing or increasing costs or profits to gain a better competitive advantage.
Organisations that keep pace with environmental changes and are more likely to succeed, but if a strategy isn’t adaptable it can also lead to failure. Gerry used real-life examples, such as M&S and Kodak, and stressed that business strategies need to evolve to fit the changing environment and avoid what he called a Strategic Drift, which often leads to the downfall or scale-back of a business. To avoid Strategic Drift, businesses must exploit current capabilities but also explore new ones, having both continuity and anticipation. They must learn from it, understand the reasons for it and how to overcome it.
Gerry also stressed the importance of the cultural web within an organisation, having a culture that is questioning, challenging and listening to avoid a Strategic Drift. Having input from all levels of a business can lead to a prolific future.
Delegates were left to think about what their competitive strategy is and in what future, what capabilities are their past successes built on, what capabilities are needed for future strategy, as well as how to develop and support a questioning culture.
Thank you, Gerry, for a very interesting and insightful evening!