Intelligent Enterprise

Better Insight for Business Decisions

RSS
Webcasts
Whitepapers
Subscribe
Home

October 30, 2003

Destination Known: An Interview with Robert A. Burgelman

Strengthened by BI and performance management, businesses are focused on improving their strategy development. In an interview, Stanford University Graduate School of Business Professor Robert A. Burgelman discusses how strategy is made and analyzes the impact of technology

by David Stodder

"Destiny is an archaic idea of a fixed and inevitable future. Strategy, in contrast, is a modern idea of an open-ended future to be determined by it." Especially in today's turbulent economy, few businesses would dare cast their fortunes with some fatalstic notion of destiny. But how many companies truly excel at developing what Professor Robert A. Burgelman cites as destiny's opposite: strategy?

Burgelman, author of Strategy Is Destiny: How Strategy-Making Shapes a Company's Future (The Free Press, 2002), was recently a keynote speaker at Intelligent Enterprise's IntelligentBPM Conference & Expo (San Francisco, Sept. 28-30), which focused on business performance management (BPM). His book offers a fascinating and influential analysis (based on 12 years of close, inside observation) of how Intel Corp. developed strategy and found business success during the wild growth of high technology in the 1980s and 1990s.

Today, the concept of "strategic IT" — in which organizations leverage information resources to, among other things, sharpen the decision-making underlying strategy development — dominates the frontal lobes of many CIOs and other chief executives. BPM is an emerging strategic IT solution area focused on helping organizations understand, optimize, and align their businesses with strategic objectives.

Just before the September conference, Intelligent Enterprise talked with Professor Burgelman about strategic development and the influence of emerging BPM technology on that process. Burgelman is the Edmund W. Littlefield Professor of Management and Director of the Stanford Executive Program of the Stanford University Graduate School of Business. Along with the book, he is author of numerous articles on strategy development.

IE: You have been teaching courses focused on the strategy-making processes for many years. What is your overall impression of how this process is playing out in organizations today? What role has weak strategy-making played in the economic downturn of recent times? How will strength in this area help companies seek competitive advantage and profitability?

Burgelman: Many companies struggle with developing an effective strategy-making process because it is actually quite difficult to articulate a clear strategy, align action with strategy, and then make sure that the company's distinctive competencies are consistent with the basis of industry competition. Maintaining alignment between strategy and action and between competence and basis of competition — what I call the "rubber band" model — is especially difficult in very dynamic industries. So, it is perhaps not so surprising that entrepreneurial start-ups struggle with this. They seem to find it difficult, or are perhaps even somewhat reluctant, to define a clear strategy — what I like to call the "minimum winning game."

Defining a clear strategy is somewhat scary because then progress can be objectively measured against it. This helps explain, in part, the demise of many companies in the economic downturn. Events simply overwhelmed these companies, which is precisely what a clear strategy helps guard against. Established companies with reasonably clear strategies, such as Electronic Arts, BEA Systems, and Intel, among others, have weathered the storm and are positioned to take advantage of the opportunities that will accompany an economic upturn.

IE: A major goal of BPM is to align strategic decision-making with action. As you describe in your book, "strategy-making becomes increasingly distributed over differentiated groups and multiple levels of management, all of which take strategic action simultaneously." Your book discusses Intel's response to this challenge in detail. But what would you describe as the key challenge companies today face in executing a unified strategic objective?