what is strategy

For almost tv^fo decades, managers have been learning to play by a new set of rules. Companies must be flexible to respond rapidly to compet- itive and market changes. They must benchmark continuously to egy. The quest for productivity, quality, and speed has spawned a remarkable number of management tools and techniques: total quality management, benchmarking, time-based competition, outsourc- achieve best prac- tice. They must outsource aggres- sively to gain ef- ficiencies. And they must nur- ture a few core eompetencies in the race to stay ahead of rivals. ing, partnering, rcungineer'ing, change manage- ment. Although the resulting op- erational improve- ments have often
^^^^ dramatic, many companies have
Positioning-once the heart of strategy-is reject- ed as too static for today's dynamic markets and changing technologies. According to the new dog- ma, rivals can quickly copy any market position, and competitive advantage is, at hest, temporary.
But those beliefs are dangerous half-truths, and they are leading more and more companies down the path of mutually destructive competition. True, some barriers to competition are falling as regulation eases and markets become global. True, companies have properly invested energy in beeom- ing leaner and more nimble. In many industries, however, what some call hypcrcompetition is a self-inflicted wound, not the inevitahle outcome of a changing paradigm of competition.
The root of the problem is the failure to distin- guish between operational effeetiveness and strat- been frustrated hy their inability to ! translate those gains into sustainahle profitahility. And hit by bit, almost imperceptibly, management tools have taken the place of strategy. As manag- ers push to improve on all fronts, they move farther away from viable competitive positions.
Operational Effectiveness: Necessary but Not Sufficient
Operational effectiveness and strategy are both essential to superior performance, wbich, after all,