Performance Through Time
Problems With Existing Strategy Tools
Given that the problem of managing performance through time is universal, it is astonishing that time charts like those in our exhibits are almost completely absent from business books and management literature. Try looking for yourself next time you find yourself in a business bookstore. So what tools do managers actually use to help them decide what to do?
A regular survey by one of the large strategy consulting firms identifies a long list of management tools. However, few of these have won much confidence among managers, with the result that they come and go in popularity like fashions in clothing. The tools fall into several categories:
- simple principles open to wide interpretation, such as vision statements and strategic planning
- substantial changes to business configurations, such as reengineering and outsourcing
- approaches to controlling performance, such as value-based management and the balanced scorecard
- problem-solving methods, such as the five forces, real options, and customer segmentation
A wide-ranging study by another consulting company, McKinsey, found that there were few strategy tools with sound methodological foundations beyond the industry forces and value-chain approaches set out by Michael Porter in the early 1980s. The many qualitative methods available seemed to work well only in the hands of their developers and were limited in their ability to provide robust, fact-based analysis.
To understand the potential value of a sound approach to managing performance through time, it is useful to start by identifying the problems with current approaches to strategy.