The Two Schools of Strategy

…the history of strategy as a struggle between two definitions, strategy as positioning and strategy as organizational learning. The positioning school, led by Harvard’s Porter, sees strategy making as the choice of where you want to compete, in what industry and from what spot within that industry, and how—on price, with distinctive products, or by finding a niche. The organizational-learning school, by contrast, maintains that no company that’s already up and running can choose its strategy as if it had a blank slate. Almost gleeful in its derision of the positionists—at least its leading spokesman, McGill’s Henry Mintzberg is—the learning school also argues that virtually no strategy ever works as originally planned. The point, they say, is for the company to set off in one direction, learn from the response it gets from markets and competitors, and then adjust accordingly.

That’s from The Lords of Strategy by Walter Kiechel. Full review forthcoming. Here is Mintzberg’s book The Rise and Fall of Strategic Planning.

6 comments on “The Two Schools of Strategy
  • The “learning school” sounds like Lean Startup ideas from Eric Ries. Looking forward to the review.

  • Check a new recent development in strategic thinking – “ambidextrous organization”
    AO combines the firms exploitation (ie.Mintzberg) of its current and past products while also reminding the managers to explore new ares of markets (ie.Porter). Achieving AO within your business is extremely difficult as for exploitation you need strong control of costs, utilization of resources, lean processing and rigid control whereas for exploration one needs to be more open-minded, creative, experimental…. But exploration drives innovation and new business while exploitation needs to be good enough to fund the exploration activities and experiments. A good example is IBM’s EBO (Emerging Business Organization process) – kind of a venture capital and business incubator within IBM.

  • Strategy has its roots in combat, both physical and psychological. It just means meeting enemy in conditions advantageous to one’s own. Going by that, I don’t think any dichotomy exists between the schools at all. I am convinced that fundamental elements of both Positioning (choices of location, industry, customer segment etc.) and Learning schools (flexibility of continuous adaptation) necessarily mutate and morph constantly, most times co-existing or even overlapping, depending on the relative advantage sought to be gained by the parties involved.

  • Aaaah, the choice of whether to be reactant or not.

    As nature has shown though, it’s always best.

    And if we can learn from companies like Flickr (originally planned to be a gaming site, until they reacted) and Apple, then we might just realize that having everything written down just might be wrong.

    … The business plan killer?

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