Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).
This article presents is a critical analysis of the article “Strategy as Revolution” published by Gary Hamel (1996) in Harvard Business Review. The article clarifies the position of the article within the wider debate about the processes of strategy and highlights the main strengths and weaknesses associated with the article.
The Placement “Strategy as Revolution” within Processes of Strategy Debates
The traditional strategic planning process as informed by NetMBA (2011, online) occurs from top to down and consists of mission, objectives, situation analysis, strategy formulation, implementation and control. However, Hamel’s (1996) “Strategy as Revolution” challenges this viewpoint by stating that strategies have to reflect the viewpoints of employees at all levels in general, and employees from tactical and operational levels in particular.
Azar and Brock (2010) specify change to be an integral part of effective strategic management. In other words, authors argue that effective strategic management has to introduce necessary changes into various aspects of the business that would contribute to the firm’s competitive edge. This viewpoint is further developed by Floyd et al (2011), who stress the importance of new ideas in terms of introducing necessary changes into the current business strategy.
“Strategy as Revolution”, on the other hand, confirms the both viewpoints formulated above, at the same time when specifying that changes to the business practices need to be dramatic, and the new ideas have to be derived mainly from employees other than those holding formal leadership positions.
The importance of strategic thinking for managers is stressed by Jarzabkowski and Balogun (2009), whereas the main agenda of “Strategy as Revolution” is to urge managers to include employees from lower rank in the formulation of strategy.
Farjoun (2002) and Sminia (2009) divide perspectives on strategic planning into two groups: top-down and bottom-up. The top-down perspective starts with scanning business environments and results in setting targets and allocating resources, whereas bottom-up perspective is more concerned with analysing trends in sales and customer behaviour as primary stages of strategy formulation.
The main idea formulated in “Strategy as Revolution” corresponds to the second viewpoint, and takes this viewpoint to the next level. In other words, as Jarzabkowski and Spee (2009) confirm, strategic planning should not consist of achieving incremental improvements, but revolutionary approach has to be adopted in terms of achieving sustainable competitive edge through reinventing the industry.
To summarise the position of “Strategy as Revolution” within the debates related to the processes of strategy it can be stated that the article has contributed to the acknowledgement of the advantages of bottom-up approach to strategy formulation to a traditional alternative – top-down approach.
Numerous works have been devoted to the same issue since then that include the works of Schmidt and Treichler (1998), Kaplan and Norton (2001), Grant (2005) and others. However, the practical value of “Strategy as Revolution” is that the article has been among the initial works to shed the light to the issue of the strategy formulation that adopted an alternative approach to the traditional top-down approach.
The Contribution of the Article to Strategic Management
“Strategy as Revolution” has contributed to the area of strategic management in practical level in a number of ways. First of all, the idea Hamel (1996) aims to communicate is divided into ten separate principles that make the article easy to comprehend, and such a division also assist in implementing the recommendations of the author in practice.
Secondly, the author highlights the way how business entities can achieve sustainable competitive edge through improving strategic planning practices in a fundamental manner. It has to be acknowledged that one and half decade has passed since the publication of the article and the principles outlined in the article are not revolutionary by today’s standards, however, there are solid reasons to believe that the article has contributed to the emergence of companies with revolutionary approach to business.
Lastly, the implementation of the recommendations outlined in “Strategy as Revolution” would benefit companies in additional ways apart from having effective corporate strategy. Specifically, including employees from lower ranks in the processes of strategy formulation would increase the level of their motivation and this will positively contribute to the achievement of organisational objectives.
The Main Weaknesses of the Article
“Strategy as Revolution” is also associated with a set of weaknesses that compromise the quality of the article. For instance, the author recommends top executives to gather the viewpoints of lower rank employees in terms of strategy formulation; however, Hamel (1996) fails to highlight the ways these viewpoints can be filtered taking into account the fact that there could be dozens if not hundred ideas and implementing all of them is not practical.
Moreover, Hamel (1996) could have strengthened the validity of each principle outlined in the article by providing relevant examples. Even though each of the ten outlined principles provide important points to be considered, the absence of practical examples associated with these principles make them rather unconvincing at some points.
The choice of the business strategy and the way the chosen strategy is implemented into practice is going to determine short-term and long-term performance of the business. Hamel’s “Strategy as Revolution” challenges the traditional business perspective in terms of formulating corporate strategy and encourages senior level managers to consider the viewpoints of tactical and operational level employees, employees working for distant subsidiaries of the company, as well as newcomers to the industry.
The author convincingly argues that following this strategy is going to offer fresh, revolutionary perspectives to the issues of maintaining long-term growth of the company. Although, the article is associated with several shortcomings discussed above, the validity of the main idea of the article has been proved by real case studies since the time it was written one and half decades ago.
- Azar, O.H & Brock, D.M (2010) “The development of strategy process research and the most influential articles and authors” in Handbook of Research on Strategy Process, editors Mazzola, P & Kellermanns, F.W.
- Farjoun, M. (2002) “Towards an organic perspective to strategy” Strategic Management Journal, (23) Issue 7, pp. 561 – 594
- Floyd, S.W, Cornelissen, J.P, Wright, M & Delios, A. (2011) “Processes and Practices of Strategising and Organising: Review, Development, and the Role of Bridging and Umbrella Constructs, Journal of Management Studies, Volume 48, Issue 5, pp. 933 – 952
- Grant, M. (2005) “Contemporary Strategy Analysis” John Wiley & Sons
- Hamel, G. (1996) “Strategy as Revolution” Harvard Business Review. July – August Edition
- Jarzabkowski, P & Balogun, J. (2009) “The Practice and Process of Delivering Integration through Strategic Planning” Journal of Management Studies, Volume 46, Issue 8, pp. 1255 – 1288
- Jarzabkowski, P & Spee, A.P. (2009) “Strategy-as-practice: A review and future directions for the field” International Journal of Management Reviews, Volume 11, Issue 1, pp. 69 – 95
- Kaplan, R.S & Norton, D.P. (2001) “The strategy-focused organisation: how balanced scorecard companies thrive in the new business environment” Harvard Business Press
- Schmidt, S.L & Treichler, C. (1998) “A process-based view and its influence on strategic management” Knowledge and Process Management, Volume 5, Issue 1, pp. 58 – 63
- Sminia, H. (2009) “Process research in strategy formation: Theory, methodology and relevance” International Journal of Management Reviews, Volume 11, Issue 1, pp. 97 – 125
- The Strategic Planning Process, 2011, NetMBA, Available at: http://www.netmba.com/strategy/process/ Accessed November 3, 2011