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Leading with Obsession: Prahalad and Hamel on Strategic Intent

Jim Taggart

We have invited Jim Taggart to share some of his thoughts regarding leadership on our site, and - fortunately for us - he has agreed .  This post originally appeared on Jim's blog 'Changing Winds', and appears here in its entirety.

Jim is a leading thinker on the topics of leadership and organizational development. You can visit his website at www.leadershipworldconnect.com and read his e-book, 'Becoming a Holistic Leader'.

- Alcide

 

 

My previous post looked at the groundbreaking 1990 Harvard Business Review article on corporate core competencies by the late C.K. Prahalad and Gary Hamel. As I noted, this article, though written 20 years ago, is perhaps even more important and relevant now because of the rapid growth of emerging economies (eg, China, South Korea, Indonesia, Brazil, Turkey, India).

Well, here’s another keeper, a HBR article co-written by Prahalad and Hamel the previous year, simply entitled Strategic Intent. When they wrote their article, Prahalad and Hamel talked about “new global rivals,” the offshoring of U.S. manufacturing to distant countries in search of cheaper labor, and the creation of strategic alliances to strengthen competitiveness through economies of scale. Here we are in 2010, and what have governments and corporations been fretting over? Precisely these issues, and more.

America, the cradle of modern innovation. As much as this great country gets beaten up in the international media, and despite its rearguard action to tackle such growing problems as corporate espionage (one of China’s core competencies) and new innovative emerging economies such as South Korea and Taiwan, the U.S. is still very much an innovation powerhouse. What it has is a self-esteem problem.51upagwea9l. ss500

Prahalad’s and Hamel’s article contains a wealth of ideas and information; I’ll leave it to you to read it in full and distill what additional gems you can glean from it. This post highlights some of its key ideas, synthesized with my commentary.

“Strategies of Imitation” are dangerous when it comes to senior corporate executives believing that this will solve their competitive problems. Rather than what the authors call the “seemingly endless game of catch-up–regularly surprised by the accomplishments of their rivals,” corporate leaders need to approach strategy looking through a new lens on the world. Incremental change no longer works.

So what is Strategic Intent? Prahalad and Hamel talk about corporate leaders whose ambitions are “all out of proportion to their resources and capabilities.” These are individuals who are obsessed with winning as they worked their way upwards within their organizations and then continued onwards for global leadership in their field. One person who comes to mind is retired CEO of General Electric Jack Welch, who accomplished amazing things for his company during his tenure.

Although Strategic Intent envisions the leadership position for an organization and how it will get there, it’s also more than blind ambition. Some of the examples used by the authors are Canon and Honda; just look at how successful these two companies have been over the past 21 years. Therefore, Strategic Intent includes a management process that energizes and focuses an organization’s employees through clear communication. People see and understand where they fit within the bigger picture, and are enabled to contribute to the organization’s forward momentum. This is all about having a well-defined mission and shared vision among ALL employees.

In the previous post, I talked about Prahalad’s and Hamel’s work on organizational core competencies. When you talk about Strategic Intent and global leadership in your field, core competencies become extremely important.

In a period of discontinuous change, where economic and geo-political events are increasingly unpredictable with global reverberating effects, a core corporate competency is the capacity for an organization–its people–to have the resiliency and adaptability to weather crises. This is easier said than done, and it’s where senior managerial leadership plays a pivotal role. What we’ve witnessed in recent years is an unhealthy attachment by corporate leaders to short-term financial statements, which in the end eviscerates an organization’s soul.

Strategic intent and corporate core competencies, when applied with integrity and meaning, are essential components to the leadership platform from which an organization will thrive and gain growing momentum towards its vision.

Assume responsibility for outcomes as well as for the processes and people you work with. How you achieve results will shape the kind of person you become. 
- C.K. Prahalad

 

Jim Taggart has been a student of leadership for 20 years, devoting over a decade to applied work in leadership development, organizational learning, and team building. Jim is a recognized thought leader, resulting from his extensive work on leadership, teamwork and organizational cultural change, as well as initiating and leading many change management projects.

He is also an economist, and has conducted research on labor market, competitiveness and innovation issues. Of special interest is understanding the interface between competitive global pressures and how leadership and management are practiced at the organization level. He holds Masters in economics and leadership and organizational learning.

Jim and his wife, Sue, have four adult children and two granddaughters. They live in Ottawa, Canada.

Comments

Jim,I just came across the above post and felt I had to respond. I couldn’t agree with you more on the importance of the work of Messrs Hamel and Prahalad.  I have based my consulting practice in part on this work since the articles came out in the HBR.

I do not have much to add to what you have already written except say that I feel their work on Core Competencies really gave impetus to the notion of out-sourcing.  My impression is that most companies who outsource these days use it to absolve themselves of any management responsibility, and to get things done more cheaply. It is ironic that whilst making (mis)use of the Core Competence idea, they have abandoned the Strategic Intent notion.  To be sure, most companies’ mission statement is incomprehensible to the average employee.

By Phil Hawkins on 2011/04/10

Very true, Phil. Some companies seem to have come to their senses by repatriating work to the U.S. (given that country’s stronger propensity to offshore products and serices). Short-term, one-dimensional thinking typically leads to regrets later on.

By Jim Taggart on 2011/04/10

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Posted by Jim Taggart
Posted on July 27, 2010
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Categories: innovation, strategy