CORPORATE STRATEGY : Is there a template ?

In 1977, McKinsey director Ron Daniel launched two projects; the first and major one, the Business Strategy project, was allocated to top consultants at McKinsey's New York City corporate HQ and was given significant resources; the project itself culminated in a book called 'In search for Excellence' by Robert H. Waterman Jr. and Tom Peters.

Their perspective was that "...any intelligent approach to organizing had to encompass, and treat as interdependent, at least seven variables: structure, strategy, people, management style, systems and procedures, guiding concepts and shared values (i.e. culture), and the present and hoped-for corporate strengths or skills."

In the book, 8 characteristics of excellence were identified:

1. A bias for action - a preference for doing something - anything - rather than sending a question through cycles and cycles of analyses and committee reports

2. Staying close to the customer - learning customers' preferences and catering to them

3. Autonomy and entrepreneurship - breaking the corporation into small companies and encouraging them to think independently and competitively

4. Productivity through people - creating in all employees the awareness that their best efforts are essential and that they will share in the rewards of the company's success

5. Hands-on, value driven - insisting that executives keep in touch with the firm's essential business

6. Stick to the knitting - remaining with the business; "The company knows best."

7. Simple form, lean staff - few administrative layers, few people at the upper levels

8. Simultaneous loose–tight properties - fostering a climate where there is dedication to central values of the company combined with tolerance for all employees who accept these values

However, in 2017, Chris Bradley, again of Mckinsey & Co, Sydney, critiqued the performance* of 55 companies featuring in 3 books viz. 'In Search for Excellence' (!982), 'Built to Last' (1994) and 'Good to Great' (2001) - for periods ranged up to two decades after these books were published and came up with a surprising result :

8 companies were Stars > 5% over market

13 were Out-performers > 2% over market

18 were Middle Performers

1 was an Under Performer < 2% over market

15 were Failures < 5% over market

*(Measured as per stock prices performance)

Further, 6 were acquired by other companies, 2 filed for bankruptcy & 4 were subsequently acquired or filed for bankruptcy. He came to a startling conclusion that :

1. Great companies were more likely to do really badly than really well. (as stated stock price performance was measured subsequent to the publishing of the books)

2. A few great companies is all it takes for a portfolio to outperform. (hence although the overall portfolio of the 55 companies would appear healthy, it was because overall the successful companies covered up the failures)

3. Greatness itself is no guarantee of survival. (which explains the under-performance & failures shown above)

So, the takeaway from this is appears to be that there is no 'fixed' template for excellence or 'greatness' or even surviving in the market place. Having said that, there is always a need to be objective in assessing any performance. There is absolutely no room for complacence and a need to avoid being blind-sided by current trends only. In the end, we could only conclude that change is the only certainty but in the journey towards excellence, greatness or even survival you can be certain that THE SECOND OPINION will always strive to be a beacon of light in charting the seas of uncertainty for businesses to reach excellence at all levels.