UABS KNOWLEDGE

INNOVATION

Has your strategy playbook expired?

15 June 2018

In a new book, Suvi Nenonen and Kaj Storbacka explain how firms can design new strategies for innovation, value creation, and growth.

Surprisingly, business strategy has never adequately defined one of capitalism's central institutions: the market. In their latest book, Smash, Associate Professor Suvi Nenonen and Professor Kaj Storbacka of the Business School's Graduate School of Management say old playbooks made do with a confused mix of assertions, assumptions, and approximations.

"The undeniable complexity of modern markets confronts us with the truth that markets are elaborate, evolving ecosystems," write Nenonen and Storbacka.

"Today, strategy must embrace complexity or die."

Recognising markets as complex, adaptive systems has strategic implications, they say. Notably, as markets are partly socially constructed, they can be reconstructed. And while they cannot be predicted or controlled, they can be influenced.

Smash traces three main shifts in strategic thinking:

• from firm focus to context focus, where the relevant context is our definition of the market;

• from competing and winning to value creation and cooperation; and

• from analysis, prediction, and planning, to non-predictive strategising and experimentation.

Nenonen and Storbacka weave these three strands into a cohesive framework – strategies for market-shaping – which acknowledges that much of a firm's performance is explained by the markets in which it operates.

Crucially, strategic choices go beyond market selection, entry, and exit, say Nenonen and Storbacka. Firms should actively seek to adapt the market to the firm instead of the other way round, and open up untapped value in the process.

"Market-shaping itself is not entirely new. Research by Boston Consulting Group and McKinsey suggest that some 9% of firms already engage in it. However, most of them do so intuitively and, therefore, their methods are hard to replicate. What is new is systematising an actionable framework for understanding and shaping markets. "

The good news, they say, is that it does not take market power and resources, or intuitive genius, to shape markets for your own benefit. Drawing on examples ranging from iconic companies such as Nokia and Uber to Les Mills International and elevator maker KONE, Smash offers tangible strategies that organisations of any size can implement.

Enter the draw to win a copy of Smash

 

Suvi Nenonen

Associate Professor Suvi Nenonen is Director of the University of Auckland Business School's Graduate School of Management.

s.nenonen@auckland.ac.nz
Kaj Storbacka

Kaj Storbacka is Professor of Markets and Strategy at the University of Auckland Business School's Graduate School of Management.

k.storbacka@auckland.ac.nz

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