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Some projects have become so important that companies are looking for new ways to measure their return on investment--or are dispensing with ROI studies completely

Success depends on 'internal fit' - the integration of strategy, org structure & other internal systems; A Wharton prof suggests that 'external fit' - how well these systems integrate w/ the environment - is equally important

Traditional strategic-planning, decision-making, and financial planning approaches can work well in stable, predictable environments. These approaches assume that a good analysis will allow the future to be forecast with enough accuracy to point to the best strategy.

In 1994, a group of McKinsey partners met to discuss the prevailing strategy development approaches then taught and used. They concluded that those methods had fallen behind the times, which were now characterized by rapid economic and technological change, and worked poorly for most business situations.

Following the 1994 meeting, the group launched McKinsey's Strategy Theory Initiative (STI), a research effort to develop an approach to strategy that could handle uncertainty and tackle both the threats and opportunities that it gave rise to. In several articles and in his book, 20/20 Foresight: Crafting Strategy in an Uncertain World, Hugh Courtney sets out the procedure that resulted from this research effort. In that book, as we describe in this article, Courtney looks at the limitations of traditional strategy and decision-making tools, details four levels of "residual uncertainty"-the core of the framework, describes tools and processes for each level of uncertainty, and explains the importance of answering three questions: Shape or adapt? Now or later? Focus or diversify?

The Balanced Scorecard is a Performance Management system that can be used in any size organization to align vision and mission with customer requirements and day-to-day work, manage and evaluate business strategy, monitor operation efficiency improvements, build organizational capacity, and communicate progress to all employees. The scorecard allows us to measure financial and customer results, operations, and organizational capacity. This paper discusses how to develop a Balanced Scorecard performance system, explores issues that organizations face in building and implementing scorecard systems, and shares lessons learned from organizations that have taken the Balanced Scorecard journey. [BNET Annotation]

article discusses four models tied to risk profile that determine strategies for doing business in today's 'e-conomy'

For companies that want to approach entrepreneurial opportunities on the Internet seriously-and with a view to turning profits-a new research paper by Sendil Ethiraj, Isin Guler and Harbir Singh offers useful insights. The researchers provide a conceptual framework to analyze Internet strategies, and they also look at business models and examine their components. In addition, Ethiraj, Guler and Singh explore what makes some business models more effective than others. Follow link at bottom for complete .pdf format research paper.

As businesses strive to implement innovative web-based initiatives, they increasingly will have to pay attention to e-commerce business models. What exactly is a business model, how does it differ from a revenue model, and why is it so important? Raffi Amit and Christoph Zott answer these questions and more in a new paper called "Value Drivers of E-Commerce Business Models." They also develop a framework to analyze how effectively e-commerce business models help create value.

Strategy in digital business has become an increasingly significant component of Digital Business Service Provider (DBSP) offerings. Pure plays have and are becoming more experienced, and are serious competitors to the more traditional strategists. DBSP strategists take over where the traditional consultancy process lets go. They serve largely in the operational strategic role by taking the business idea to the step of design and architect to achieve deliverable capabilities. But they also do more.

Those of us who have been thwarted in our efforts to find a copy of a just-released video at our local video store will be interested in research conducted by Wharton professor Gerard Cachon and Martin A. Lariviere from the Kellogg Graduate School of Management. Their studies suggest that using a revenue-sharing model can be a smarter way to do business - and provide enough copies of new releases to meet demand - and relying on the traditional wholesale price-only contracts. While Cachon and Lariviere use the video cassette rental industry to make their case, their research shows that the performance of any supply chain can improve under this type of contract.

There are three "waves" of e-business, according to Gartner analyst and former Sun Microsystems CIO Dennis Wayson. And if you want to successfully implement e-business, you need to know which wave you're in and what steps you should be taking to reach the next level.

How do you set long-term strategy in an economy that moves at the speed of the Net? Is there a difference between a "business strategy" and an "Internet strategy"? And who makes strategy these days? John D. Noble, vice president of corporate Internet strategy at Putnam Investments, is wrestling with those and other questions.

Who should companies put in charge of their e-business operations? The answer, according to this special report by the EIU ebusiness forum, depends on where e-business sits in the corporate structure. Diplomacy is key if the company is attempting to integrate e-business into all operations; autocracy is feasible if the organisation has created a separate unit for e-business. Whatever the powers of the position, however, steady and explicit backing from the CEO and the board of directors is crucial for any e-business boss.

This interesting article (written before the dot.com shakeout) shows some interesting fallacies of thought but also makes some interesting and useful observations and analyses. Discusses three types of coprorations: Godzillas, Titans and Bystanders. Lists the following as features critical to Godzilla companies: Clarity of Focus; The Primacy of the Customer; Zero-Based Organization; Location Irrelevance; Value Chain Shortcuts; Pointcast vs. Broadcast; The CEO as CIO; Web-shaped Organizations; Global Reach; Growth Through Acquisition; and Reacting to Customers not Financial Markets.

The world's most famous business-school professor is fed up with CEOs who claim that the world changes too fast for their companies to have a long-term strategy. If you want to make a difference as a leader, you've got to make time for strategy.

Some time ago the new economy appropriated a term that summed up its irrational exuberance - "first-mover advantage." E-business first movers, it was thought, could gain valuable advantages over the competition by pioneering technologies, being first-to-market, and building brand loyalty. Hindsight may be 20/20, but it's still not clear what hindsight will say about the first movers in e-business. Gathered here are several views from executives, professors, and journalists who have covered the phenomenon full-cycle.

Strategic planning is more than playing golf at an exotic resort. Taken seriously, strategic planning and execution can make the difference between being a mediocre "me-too" company and a trailblazing category-killer. Talk about these items:
1. The corporate vision
2. Personal vision
3. Shared vision
4. Mapping current reality
5. Strategic priorities
6. Choice and execution
7. Celebrate your successes

Start with the people who are closest to the customer, then alphabetize, organize, summarize, save time and tempers, finalize, publish, sign and celebrate.

The idea that new businesses prosper best when separated from their corporate parents has now become conventional wisdom. Although new ventures do need space to develop, strict separation can prevent them from obtaining invaluable resources and rob their parents of the vitality they can generate. The solution? A balance of partitioning and integration.

Corporate venturing has increased dramatically in recent years as companies seek to grab ever more profitable growth. This has raised two important questions. First, is it a management fad or lasting trend? And second, is it for everyone - or are some companies better positioned to create shareholder value through corporate venturing? Bain's findings show corporate venturing to be far from a panacea. It's just one tool among many that can be used to achieve profitable growth, if and when applied appropriately. Here's how.

Article looks at the questions of how and why alliances are formed and the ingredients for their success or failure.

Are e-alliances a fad of the past? Speed and scale remain important in the post-New-Economy world, and alliances are often a faster and less capital-intensive way of gaining access to products, customers, and business capabilities than building them from scratch. But the stakes are now much higher, and the market is less forgiving. How can you raise the odds an alliance will succeed? To answer that question, the authors considered more than 700 deals announced from January 1997 to May 2000.

Drawing on military wargames to simulate battlefield conditions, commercial wargaming simulates a set of business conditions and challenges executives to design successful strategies that are able to evolve with the changing nature of the environment. In a corporate war game, senior managers play their own company, a select group of their competitors and the marketplace. A control team plays all other entities that affect the industry. The game begins with a prepared set of business conditions and, when the whistle blows, anything goes - that is, anything that can happen in the real world, including mergers & acquisitions and natural disasters. When the dust has settled, the authors say, managers look back on these simulations as one of the most challenging and stimulating exercises of their careers. The sessions actually last several days.

To be most effective, war games should include certain specific real world conditions. These include a strongly competitive market, so that players must react to each other's actions. Another is unpredictability, illustrated by changing technologies and shifts in market demand. A long-term perspective is also required, to show how decisions made now will affect profits later on. One important result that makes wargames supremely worthwhile: managers learn the importance of being absolutely clear in their communications with the market.

The proper care and feeding of customers is a hot topic these days. Whether the discussion goes under the name customer satisfaction, zero defections, loyalty or intimacy, the customer issue has pushed its way to the top of the agenda for a growing number of C.E.O.'s.Yet despite all that attention, surprisingly little is said about a core problem many a chief executive faces: how do I insure that my end customers receive the right service at the right price? Indeed, although at least half of all goods and a significant portion of services flow through distribution channels, most of the extensive body of writing about customer care either addresses services provided directly to customers -- by airlines, banks, hotels -- or simply skirts the complication of dealing through intermediaries. This article addresses head-on the unique challenges faced by suppliers of goods and services that flow through distribution channels.

Though a little dated (1997), this article offers some good insight into the business opportunities emerging countries represent. Focused on Latin America (with some interesting associated facts and figures) some analysis is also somewhat generalizable, specifically looking at:
a) The "multidomestic player" that must move to a regional footprint and management model.
b) The multinational player that is starting to expand in the region.
c) The multinational player that is entering, or considering entering, the region.

What does it take to grow shareholder value at world-class rates? For many years companies have successfully focused their efforts on cost reduction through increased labor and asset productivity and have achieved short-term increases in shareholder value as a reward. Today, with their businesses re-engineered and running efficiently, these companies have refocused their energies into developing long-term growth strategies. Aggressive revenue-oriented strategies are the most common approach to creating long-term value for shareholders. These strategies typically include acquisitions, new products that extend the line and marketing programs to improve customer loyalty and retention. Unfortunately, our research indicates that these strategies can cause more harm than good because superior long-term value for shareholders results only from a specific type of revenue growth: growth that results when a company delivers an order-of- magnitude increase in value to its customers (what we call "10X value").

Many purchasing organizations are being challenged to increase the level of "global sourcing" to tap into promising opportunities and to fend off competition. Unfortunately, many companies are ill equipped for the challenge: though global sourcing employs the same set of activities as domestic sourcing, there is also greater complexity. Based on our experience, most companies need to enhance the skills of their purchasing organizations to pursue global sourcing effectively. Although our research in this area is still under way, this article explores some issues in global sourcing encountered by our clients. The article is part of a series in Strategy & Business expounding upon the skills required in the business model that Booz-Allen describes as "balanced purchasing."

"Let's peel away the business academic interpretations and get at the root of thinking strategically."

The ways of thinking that underlie strategy formulation are seldom addressed in business textbooks. But principles, or at least guides, can be reverse engineered by careful review of business case studies. The author has assembled some of these and presents them in a skeletal form in hopes they offer a useful checklist and
food for thought as to how leaders think.

The Art of War, compiled over two thousand years ago has been a valuable source of insight for leaders and strategists. The ‘nine grounds' examines the ‘tactical' issues of a group in relation to its terrain or territory, useful in its application to competitive and market analysis and to the social, political, and more abstract senses.

Rather than propose rules for the entire economy, Professors Vijay Mahajan (McCombs) and Jerry Wind (Wharton) focus their proposals on marketing. As contributing editors of the forthcoming book, Digital Marketing: Global Strategies from the World's Leading Experts, Mahajan and Wind are out to reshape their discipline. What follows are key points paraphrased from Mahajan's and Wind's new rules for digital marketing, with selected excerpts from their essay.

A Quick Look at the 10 Rules:
1. Target segments of one and create virtual communities
2. Design for customer-led positioning
3. Expand the role of branding in the global portfolio
4. Leverage consumers as co-producers through customization
5. Use creative pricing in the priceline.com world
6. Create anytime-anyplace distribution and integrated supply chain
7. Redesign advertising as interactive and integrated marketing communication, education and entertainment
8. Reinvent marketing research and modeling as knowledge creation and dissemination engine
9. Use adaptive experimentation
10. Redesign the strategy process and supporting organizational architecture

Editor's Note: this same basic material is covered again in the EBF article, "Digital marketing" at:
http://www.ebfonline.com/main_feat/in_depth/in_depth.asp?id=57