Bringing Strategy Back: How Strategic Shock Absorbers Make Planning Relevant in a World of Constant Change

227 Pages·2014·2.01 MB·English

by  Jeffrey L. Sampler

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Bringing
Strategy Back
HOW STRATEGIC SHOCK ABSORBERS MAKE
PLANNING RELEVANT IN A WORLD OF
CONSTANT CHANGE
Jeffrey Sampler
Foreword by Vijay Govindarajan
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LibraryofCongressCataloging-in-PublicationData
Sampler,JeffreyL.
Bringingstrategyback:howstrategicshockabsorbersmakeplanningrelevantina
worldofconstantchange/JeffreyL.Sampler.
pagescm.–(TheJossey-Bassbusiness&managementseries)
Includesindex.
ISBN978-1-118-83009-3(hardback)ISBN978-1-118-83008-6(pdf)–
ISBN978-1-118-83007-9(epub)
1.Strategicplanning.2.Organizationalchange.I.Title.
HD30.28.S2542015
658.4’092–dc23
2014024323
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FIRSTEDITION
HBPrinting10 9 8 7 6 5 4 3 2 1
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Contents
ForewordbyVijayGovindarajan v
Introduction 1
1 StrategicShockAbsorbers 13
2 Accuracy 23
3 Agility 47
4 Momentum 77
5 Foresight 109
6 Execution 131
7 DrivenbyValues 145
8 ManagementInnovationfromFast-MovingMarkets 171
Notes 193
TheAuthor 203
Index 205
iii
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TheJossey-BassBusiness&ManagementSeries
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Foreword
H
istorically, innovations have originated in rich developed
countries in the West and later flowed downhill to the popu-
lous developing world. But it is also possible for innovations
to originate in poor countries and trickle up to the wealthier
world.ThisiswhatI’vetermedreverseinnovation.
Iinitiallybecameinterestedinreverseinnovationduringa
two-yearstintasProfessorinResidenceandChiefInnovation
Consultant at General Electric. At the time, GE CEO Jeff
Immelt had put a stake in the ground to grow the company
organically by meeting the needs and budgets of customers
in heavily populated developing markets. As part of that
plan, GE went on to introduce revolutionary new product
adaptations—a $1,000 handheld electrocardiogram device
and a portable, PC-based ultrasound machine that sells for
as little as $15,000—created to serve rural India and China.
By developing lower-cost end-user solutions,GE has been
able to cultivate an entirely new market.Just as notably, these
innovations have since been adapted and sold in the United
StatesandEurope.
v
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vi Foreword
It’sclearthatifrichnationsandestablishedmultinationals
aretocontinuetothrive,thecurrentgenerationofinnovators
must look beyond their own backyard and consider the needs
andopportunitiesinthevastdevelopingworld.Andtheideaof
reverse innovation extends well beyond just product creation.
Forstarters,weseepocketsofreverseprocessinnovationspring-
ingupaswell.HospitalsinIndia,forexample,aretransforming
healthcarebyperformingopen-heartsurgeryfor$3,000rather
thanthe$150,000weseeintheUnitedStates—andnotsimply
becauseoflowerlaborcosts,butalsobecausetheyhaveadapted
standardized processes from assembly-line manufacturing to
maketheprocedurefarmorecosteffective.Thistypeofinno-
vation would be possible anywhere, but it’s more probable in
poorcountriesbecauseitmeetstheirneedsandrequirements.
The reality is that the future of growth and innovation
is far from home—in places like Asia, the Middle East, and
elsewhere.
Reverse innovation is any innovation that is adopted first
in the developing world. This includes management innova-
tion,asubjectthatJeffreySamplerknowsextremelywell.What
he’s done in this excellent book is bring my work on reverse
innovation together with Gary Hamel’s idea of management
innovationtocreateanewmodelforunderstandingandusing
the latest and greatest management innovations from places
as far away as India and Dubai. Economies such as these are
radically different from mature Western economies, and they
haveradicallydifferentneeds.Therefore,theirsolutionsmust
be radically different. Based on the author’s vast research and
experience working with executives at companies across these
markets,the“StrategicShockAbsorbers”introducedhereform
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Foreword vii
atoolkitofmanagementinnovationthatwasdevelopedbecause
thepaceofgrowthandchangeinIndiaandDubaiwassointense
thattheWesternmanagementideassimplydidnotapply.
The tools and advice here present an opportunity, and a
solution, for Western multinationals that are not only strug-
glingwiththeever-increasingpaceofchangeathomebutalso
looking for ways to compete with incumbents in developing
markets.Thecompaniesfeatured,suchasArvindMills,Dabur,
FutureGroup,DLF,orNetwork18,maybeunfamiliarbutthey
have succeeded because of, not despite, the seismic shifts that
have occurred in the Indian economy over the past decade.
TheyhavemadethemostofchangeandJeffSamplermakesa
compelling case that they set the standard in terms of innova-
tivemanagementpracticesthatservenotonlytohedgeagainst
risksandbutalsoridetheongoingwaveofchangeanddisrup-
tionthatiscommonindevelopingeconomies.
The stakes are enormous for adopting the type of reverse
innovations of management ideas described here. Today, rich
countriesandpoorcountriesaccountforroughlyequalshares
oftheglobaleconomy.Butforyears,growthhasbeenfarmore
robust in poor countries. Increasingly, understanding how
success happens there is a prerequisite to continued vitality
at home. In the transformed economic landscape, reverse
innovation—including the management innovations featured
inthisbook—isnotoptionalinanymarket.
VijayGovindarajan
CoxeDistinguishedProfessor
TuckSchoolofBusiness
DartmouthCollege
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