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Graphic 1 [Figure omitted. See Article Image.] The Lords of Strategy: The Secret Intellectual History of the New Corporate World (Harvard Business Press. 2010), by Walter Kiechel III, chronicles the rise and stumbles of a number of leading consultancies - primarily Boston Consulting Group, Bain and McKinsey - as they, Professor Michael Porter and a few others "invent" the concept of strategy over the course of about six decades. First as a Fortune writer, then as its editor and finally as editorial director of Harvard Business Publishing, Kiechel has interviewed originators of the core ideas behind strategy and strategic management, and executives at the large companies where it was first practiced. His engrossing book is based on several premises:
- The development of strategic thinking has caused a genuine revolution in the way business is done.
- Strategy is now the dominant framework by which companies understand what they are doing and want to do.
- The intellectual models of innovative consulting firms have played a key role in figuring out competitive advantage.
- The big ideas of a few consultants and several star academics deserve much of the credit for propelling the history of strategy.
- "Greater Taylorism," the application of analytics to virtually every aspect of what a company does, is as important a product of the strategy revolution as strategy itself.
Strategy & Leadership asked Kiechel about his book and the lessons it offered for today's managers. Robert J. Allio is a contributing editor and a founder of this publication. Robert M. Randall is the editor.
Strategy & Leadership: What are some of the lessons that the current generation of business leaders can take from your history of the founding of strategic management?
Walter Kiechel III: Let's start with a handy half dozen, roughly in descending order of importance, though that will vary with a company's circumstances: Managers need a clear fix on costs, customers, and competition, with data unclouded by what a division head or unit manager may be trying to sell them by way of next year's budget. Continuous cost reduction - systematic, predictable, year in year out, everybody knows it's expected of them - should be built in to how business is done. You're probably in too many...