Strategy

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.

There’s a great deal of enthusiasm about platform strategies these days. Entrepreneurs pitch their startups as the next Uber, the next Facebook, or the next Airbnb, while executives in established companies are retooling their strategies around platforms to drive growth and compete digitally. But creating a successful platform business is not easy — as economists Richard Schmalensee and David S. Evans explain in this MIT Sloan Management Review interview.

Innovation, much like marketing and human resources, can be made less reliant on artful intuition by using information in new ways. But this requires a change in perspective: We need to view innovation not as the product of luck or extraordinary vision but as the result of a deliberate search process.

As busy as they are, leaders need to find ways to observe fundamental work processes in their organizations. When they do, they usually discover that there are gaps between theory and reality in how works get done. Michael Morales’ experience — in which identifying and addressing such gaps led to his company saving $50,000 in just 60 days — is a case in point.

Accelerating compression of both revenues and profits may rapidly prove fatal to traditional businesses. Consider the accelerating decline of voice calls as a means of communicating via mobile telephone: From 2013 to 2015, average mobile voice revenue per user declined globally by 19%, and a further decline of 26% is expected through 2020. To stave off disaster, incumbents must transform and renew their core operations — while also growing into new businesses and industries.