Professor Kevin Morrell discusses transformational strategy, how it differs from conventional strategy, and why we’re in an era of temporary competitive advantage.
In his current role as the inaugural Rowlands Chair of Transformational Strategy Kevin helps organisations successfully implement large-scale change.
“...we are in an era of temporary advantage - managing change is itself a core capability.”
Transformational strategy steers organisations through change
“Transformational strategy” refers to change that is characterised by scale (many stakeholders are affected) scope (it impacts on many parts of the business) and speed (it unfolds quickly). It’s not fine tuning, it’s fundamental rethinking of a business.
Transformational strategy differs from conventional strategy
The conventional aim of strategy is to help companies outcompete by creating a bundle of resources and capabilities that are valuable and rare and that can’t be copied or easily substituted. This is the basis for ‘sustainable competitive advantage’. Once you have this bundle you protect it - your business is like a castle and the role of strategy is to build a moat. You make it harder for your competition by doing things like increasing entry barriers, building a strong culture, operating at scale, making better products, building brand equity, creating customer loyalty, developing proprietary technology, supply chain innovation, training and recruiting well and so on. But there isn’t the prospect of ‘sustainable competitive advantage’ in many industries now. Instead, we are in an era of temporary advantage - managing change is itself a core capability.
Change means companies may have to settle for temporary advantage
There have been significant drivers of change recently, Covid-19 and Brexit of course, but there will be accelerated change and shocks caused by disruptive technologies like AI, Augmented and Virtual Reality, Internet of Things, 3D printing, and Blockchain. These technologies allow new entrants to open up the bottom of the market or quickly create new markets. As they take root and grow over time this topples the castles of established firms. Then there are going to be huge changes to respond to Climate challenges in the Anthropocene era. What Simon Rowlands has identified and what gives purpose to this role is that there is a need for Boards to be able to learn how to react to large scale changes.
From the classroom to the boardroom
In terms of the role of management education, well you will often hear academics claim there is nothing as practical as a good theory. This cliché is a bit empty and it’s right to be sceptical of it. But the key thing in relation to transformational strategy is that theories are essentially formalised predictions. They are the only guides to the future we have. 美姬阁 excels in helping businesses because it has experts who translate theories into accessible and practical resources and advice that support a conversation wholly owned by the business. It’s definitely not a ‘sage on the stage’ model.
I was excited by the chance to work at 美姬阁 and by the vision behind the role
I am eager to realise Simon Rowlands’ ambition of building something path-breaking and that also has a lasting positive impact on how we do business in the UK, as well as supporting public sector and charity organisations. I see this as a once-in-a-career opportunity to contribute to the practical application of management knowledge and be a trusted adviser to organisations - steering away from dated, off-the-shelf models to develop bespoke solutions to today’s grand challenges.
