Formulating a playscript to transform an organization

Michael G. Jacobides

Michael G. Jacobides has written an article, “Strategy Tools for a Shifting Landscape,” that appears in the January-February issue of Harvard Business Review. He asserts that, in an age when nothing is constant except change, strategy should be defined by narrative – plots, subplots, and characters – rather than by maps, graphs, and numbers.

He recommends that companies should “develop a strategy by writing a playscript that encapsulates the motives, decisions, and actions of the company (the protagonist) as well as those of all other organizations connected to it, regardless of the businesses in which they operate.”

Jacobides identifies four characteristics of effective playscripts:

Imaginative “Playscripts should explore all the opportunities that exist, whether within or beyond [the company’s] sector.”

Outward-Facing “They should focus on the links the company has with other entities, the way it connects with them, and how others perceive it in the market.”

Robust “They should not depend on too many assumptions about other actors’ behavior, but instead focus on the actions that lead to the creation and capture of value.”

Plausible “Companies should consider why they, rather than some other player, would be able to make a playscript succeed.”

He concludes the article, “Companies will be better served in the future by the dynamic capabilities of playscripts than by the static characteristics of maps.”

There is much to be said about the value of playscripts or scenarios but I think that any process by which to formulate an appropriate strategy also requires design thinking and analytics.

Jacobides is an associate professor of strategic and international management at the London Business School where he holds the Sir Donald Gordon Chair of Entrepreneurship and Innovation.

Thriving in “The Age of Consumer Capitalism”

Roger Martin

Roger Martin has written an article, “The Age of Customer Capitalism,” that appears in the January-February issue of Harvard Business Review. Here I brief is his core concept:

The big idea: It’s time to discard the popular belief that corporations must focus first and foremost on maximizing value for shareholders. That idea is inherently, and tragically, flawed.

The argument: It’s impossible to continually increase shareholder value, because stock prices are driven by shareholder expectations about the future, which cannot be raised indefinitely.

What the data show: The focus on shareholder value hasn’t done shareholders any favors. They have actually earned lower returns since corporations adopted it as their guiding principle.

A better approach: Make customer value the top priority, as Johnson & Johnson and Procter & Gamble have done. These two companies have generated shareholder returns that are at least as high as, if not higher than, those of leading shareholder-focused companies.

Martin is the dean of the Rotman School of Management at the University of Toronto. His most recently published books are The Opposable Mind and The Design of Business, both published by Harvard Business Press.

Blog Update from Randy

I will be taking a few days off (though I might pop up with something once over the weekend). I should resume blogging as I was before my recent move and illness by early next week.

And of course the rest of our blogging team may post — this is just my report re. Randy’s blog entries.

Thanks to all who read.