Strategy Past, Strategy Future

A bacon sandwich, toast, marmalade and coffee.  The perfect start to a Sunday morning.  Then the business section of The Sunday Times flipped open to reveal, in two separate articles, a possible picture of strategy past and strategy in the future.

Tom Bowers’ article Browne’s legacy of cost cutting stored up barrels of trouble[1] paints a sorry picture of the potential long-term effects of cost-cutting and outsourcing (in this case, the use of contractors). To many, cost reduction and the associated use of outsourcing have been essential (in some cases arguably the only) elements of corporate strategy. Certainly, the 1990s and the first decade of the 21st century wear these now indelible strategic hallmarks.

In the same section, another article, Andrew Davidson’s interview with Vineet Nayar[2], reveals a different approach to strategy-making. Nayar points to the real “value zone” as being the point where employees and customers meet. Using this observation, Nayar’s approach is to build advantage through the competences of employees. Indeed, Nayar goes as far as to say “Employee First, Customer Second” – breaking that long-held rule that “the customer comes first”.

Two different perspectives on the source of competitive advantage. One marking the past – one marking the future?

[1] Bower, Tom Browne’s legacy of cost cutting stored up barrels of trouble. Sunday Times. May 9, 2010.
[2] Davidson, Andrew The Andrew Davidson Interview: Vineet Nayar. Sunday Times. May 9, 2010.

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