During the past two decades, Lambros Karavis has merged the practice of strategic management consulting with leading change through executive development. Prior to forming Karavis & Associates in 1997, he was an Associate Partner with Andersen Consulting and Director of Executive MBA Programs at Monash MtEliza Business School.
Karavis is a Certified Management Consultant (CMC) with IMC Australia. He has both an MBA and B.Ec. degree and has completed doctoral coursework in Business Policy in Canada. A passion for olive oil has led to graduate studies in olive growing, processing and marketing.
Is there a connection between the state of academic research in strategy and the drive of strategy practitioners to establish strategy as a profession?
One would be tempted to say a resounding ‘No!’ I’ve recently come to a tentative conclusion that strategy practitioners are in fact concerned that the lack of relevance in academic research may, in fact, be hampering the drive of some groups of practitioners to establish strategy (and I believe we mean ‘strategy management’) as a profession in its own right. The point of connection is in establishing a ‘strategy body of knowledge’, based upon research as well as practice, that most people appear to accept is one of the foundations of establishing a profession of strategy management.
How has strategy changed?
The field of Business Policy originally viewed strategy as one (important and central) component of the job of the General Manager (GM), who was responsible and accountable for the corporate strategy.
Between the late 1950s and mid-1970s there was a subtle but important shift: strategy became an organisational activity. By developing a framework for strategic decision-making it became possible to shift the activity from the GM to the organisation as a whole, initially through the creation of corporate (strategic) planning units, but relatively quickly as an organisation-wide (process) activity. The GM remained responsible and accountable but delegated authority to specialist staff and the organisation.
This subtle shift changed the practice of strategic decision-making within organisations – strategy was previously the GM’s realm and the organisation did not really have understand why, so much as how, the strategy was to be implemented: that view persists with some people, who still see (and occasionally define) strategy as the pattern in a stream of decisions.
The 1970s saw another significant shift in the teaching and research of strategy. During the 1950s strategy was seen predominantly as the means by which a GM resolved cross-functional tensions in a functionally organised business. The whole field of strategy focussed on how the organisation responded to the external (competitive) environment. The research during the 1970s on the strategy-structure-performance of diversified firms brought a whole new level of complexity to the strategic problems being studied and researched in business schools.
The 1980s saw another subtle but very important shift. Michael Porter’s two books – Competitive Strategy and Competitive Advantage – changed the way we formally thought about and analysed rivalry within industries, leading to a large number of research dissertations contributing significantly to our understanding of strategy and ultimately changed the way we taught strategy in business schools. Strategy moved from being taught as part of the ‘integrative, capstone course’ in General Management and Business Policy, to an introductory, first year overview course in Industry and Competitive Analysis.
Strategic planners were no longer ‘high priests’ and the skills required of strategists extended beyond the confines of business administration to the world of the political economy. The flow of ideas was reversed and strategy began to affect the disciplines of economics, sociology and politics.
Sitting at the cusp of the 1990s strategists knew that the world of strategy was fundamentally changing. Technology was changing the world of business. Personal computers were no longer a novelty. The internet was slowly emerging as a force out of universities into the business world. Biotechnology was creating new approaches to medicine and personal health. The global political environment was also changing. What would happen to China and Russia? Would the Uruguay Round of GATT discussions finally bear fruit and open the way for greater globalisation and world trade?
It is no coincidence that during the 1990s a lot of effort went into competitive advantage built on concepts of speed of response, surprise, innovation and flexibility. The means for doing so was in reengineering business processes and in looking for new business models that took advantage of the new technologies. Strategy research transitioned from a very pragmatic emphasis to a more theoretical perspective.
In the last decade, the rise of terrorism in the global economy – not simply Al Qaeda but also the rise of electronic warfare – needs to be incorporated into the way we view strategy in the modern world. It is sobering to think we may be entering a new world of increasing economic instability.
What are the implications for the body of knowledge on strategy and strategic management?
It depends on purpose. The body of knowledge required by strategy practitioners within organisations will be different from that required by strategy academics and different again from that required by strategy professionals:
• Strategy practitioners need a basic body of knowledge based upon pragmatic tools and techniques supplemented by a deep understanding of their industry.
• Strategy academics need the same basic body of knowledge (based upon pragmatic tools and techniques) but need to have a deep understanding of the academic research literature which most likely has a discipline base (for example, economics, politics and sociology).
• Strategy professionals need to same basic body of knowledge (in terms of tools and techniques) but in addition need to have a wealth of (research-based) case studies and specific examples of best practice in their field of expertise, presumably in a specialist area of strategy (such as corporate strategy, global strategy or city strategy) or a stage in strategic planning (such as strategy war-gaming, strategy execution or strategic organisation renewal).
Clearly a lot more thinking needs to be applied to the question of what needs to be known by different sub-groups identified above.
What are the cornerstones of professional certification?
Like Harvard Business School, I have not been afraid to borrow and adapt the approaches used by the US Army’s West Point for officer development and by Harvard Business School for leadership development, which may be summarised as ‘knowing’, ‘doing’ and ‘being’. I have added one more component, ‘contributing’:
• Knowing is related to mastering a body of knowledge about one’s area of professional expertise, relating to what we need to know about strategy and strategic management. I would include topics such as strategic planning models, the practice of strategic management, strategic processes within organisations, strategy lens (planning, learning, enacting), strategy clients (for example, companies, cities, countries, regions, governments), and strategy settings (industry, political systems, stages of development).
• Doing is related to the practice of strategy and requires a set of skills rather than a body of knowledge – knowing how things need to be done. This requires skills in strategic thinking, the strategic leadership of organisations, the administration of strategic planning systems and pragmatic skills like using strategy software, facilitating workshops, interviewing senior executives and preparing presentations.
• Being is related to individual integrity and ethics as a strategy professional. Strategy professionals are likely to have access to sensitive information about the capabilities and intentions of companies, which could be acted upon for personal gain: This could be seen as a form of insider trading. Strategy professionals must be able to build trust with senior executives so need personal integrity. More than being able to recite a professional oath of practice, it must also have ‘teeth’ in the sense that there are legal consequences.
• Contributing is related to the notion that members of the profession need to be seen to be giving something. This may mean taking the knowledge gained from professional practice and converting it into knowledge (action research), working on a pro-bono basis with organisations in the not-for-profit sector, or advancing the professional activities and membership of the profession.
The extent to which business schools (and possibly other third party bodies) should be involved in determining and delivering the body of knowledge to candidates aspiring to be strategy professionals needs to be resolved. Until now, business schools have had a free hand in determining the content of strategy courses.
In the absence of a professional certification requirement (and I do not consider the AACSB or EQUIS requirements in this context) faculty, as often as not, have used textbooks and their own research interests to select the content used.
Determining the competencies that the professional body will require of its members will also be needed. But the real issue will be determining the equivalency of different experience pathways, especially the value of strategy consulting experience compared to that of senior executives in industry and government.
The bottom line is that I don’t see professional certification as being based solely upon presumed mastery of a body of knowledge – important though that must be – but more broadly based on practice, ethical integrity and contributing to the profession.