Strategy

Effective strategic guidelines get three things right. They link to the corporate vision, identify critical vulnerabilities, and focus on what matters most.

Throughout the 20th century, autos and the auto industry propelled human development, bringing unrivalled utility and flexibility to the way people move. Yet the industry now faces fundamental disruption as vehicle ownership yields to on-demand mobility.

Businesses develop strategies to address complex, multi-layered business environments and challenges — but to execute a strategy in a meaningful way, it must produce a set of specific actions focused on achieving clear goals. Rather than trying to boil the strategy down to a pithy statement, executives will get better results if they develop a small set of actions that everyone gets behind.

Chinese companies are increasingly investing in companies overseas. But to reach advantageous agreements with Chinese direct investors, Western managers need to prepare themselves for differences in negotiating style.

Many executives don’t understand how to craft a compelling vision for change that will gain widespread commitment within their organization. Leaders should start by asking themselves: What will people see, hear, and feel once the changes have been achieved?

Leaders need a new mental model to better understand the complex interplay between companies, economies and societies. To do so, they must shift their focus from their own companies to the broader business and social ecosystems in which they are embedded.

Many companies today are operating several business models at once. But despite the potential that business model diversification has for generating growth and profit, executives need to carefully assess the strategic contributions of each element of their business model portfolio.

Zhang Ruimin, the CEO and chairman of the Qingdao, China, white goods giant Haier Group Corp., has done what most chief executives dare not even dream about. He blew up nearly the entire administrative structure of a global manufacturing enterprise, eliminating the 10,000 management jobs that once held it together. And he has guided the organization to re-form as a network of entrepreneurial ventures run by employees.

Rather than trying to predict the future, organizations need to strengthen their abilities to cope with uncertainty. A new approach to scenario planning can help companies reframe their long-term strategies by developing several plausible scenarios.

The difficulty Western companies have identifying managers with leadership potential in East Asia says more about prevailing Western views of leadership than it does about available talent.