[Published in VILAKSHAN, Journal of the Xavier Institute of Management, Bhubaneswar, Mar 2009]
Abstract
Corporate Strategy is an important part of the theory and practice of management. For top management, strategy is what a map or a compass to a sailor on a ship; it is a map for navigating the corporate ship towards its desired goal. This article argues that a new approach to strategy based on growth of consciousness is needed for navigating the corporate steamer successfully into the future world. The article begins with a brief review of the emerging trends in strategy and proceeds further to present an outline of the principles of a consciousness-approach to strategy-making.
Emerging Trends
There can be many perspectives on the aims of strategy. Growth, customer satisfaction, coping with change, competitive advantage are some of the objectives of strategy. However, as the corporate environment became intensely competitive, Competitive Advantage has emerged as the primary aim of the traditional approach to strategic thinking. The concept of Competitive Advantage is a very popular idea among strategic thinkers in Management and there is a voluminous mass of literature on the subject. According to Michael Porter, who pioneered the concept, there are two ways in which firms can gain competitive advantage: cost leadership and differentiation. Cost leadership means, “offering lower prices than competitors for equivalent benefits”. Differentiation means, “Providing unique benefits that more that offsets a higher price” and which the competitor cannot imitate. (Potter, M, 1985) Cost leadership can be achieved by raising operational efficiency and productivity through better technology, or management techniques like TQM or bench marking or lowering the quality of the product.
However, the new trends of thought in corporate strategy are moving toward a less competitive and a more creative approach to strategy. According to this new thought on strategy, a too heavy emphasis on capturing more and more of the market share or beating the competitor on a given set of variables leads to fierce red-hot competition, which doesn’t lead to any substantial gain for any of the competing players. So, even Michael Porter, in his later thinking was critical of an exclusive emphasis on competition and market share. Pointing out the disadvantage of such an approach, Porter states,
“The first trap was that companies thought that they had to have the largest market share, because this was the only way to win. The idea is wrong because there are lots of companies with small market share that are more profitable. What is worse, if all companies are trying to get the largest market share, a destructive battle ensues which is hard for any company.”(1998)
Similarly, competing on the basis of better operational efficiency in terms of cost, speed, quality, applying various management techniques like reengineering, TQM, will also be not very effective in the future, because these efficiencies can be quickly and easily replicated. As the eminent strategic thinker, Gary Hamel explains:
“Most of what companies have been doing for the past decade has had an internal focus which will not be effective in the future. The restructuring and the reengineering have been about how do we get better internally. Companies have been working to close performance gaps along known parameters of competitiveness. That’s the foundation of benchmarking: Let me go out and see who is best in class and make sure I’m at least that good. I would argue there is a substantial difference between bench-marking and path-breaking¾between improving the capabilities of the organization and creating fundamentally new markets. And it is only the latter that will in the long-term, produce new wealth. Simply catching up to where others have been is necessary to stay in the game, but the winner will be those companies who will be able to invent fundamentally new games.” (Hamel. G, 1998)
Another distinguished management thinker C.K. Prahalad, echoing the views of Gamel, states that success in the future world depends on “continually changing the rules of competition,—defining new ways of doing business, pioneering new product concepts, building new core competencies, creating new markets, setting new standards and challenging their own assumptions.” (Prahlad, C.K, 1998) Both Prahalad and Gamel argue that success for both newcomers and industry incumbents hinges upon the capacity to avoid competition, which means not to position against the competition but rather to go around it. So the new trends in strategic thinking is not in favour of head-on competition but suggest a ground-breaking surpassing or bypassing of competition in a new creation which satisfies a dormant need which did not exist or not manifest before.
This emerging trend in strategic thinking is not a new theory. Many companies in the past and present have successfully conceived and executed such a leap in strategic thinking. Ford’s first low-cost car Model T, and Apple’s desktop computer are examples of such a breakthrough thinking in strategy. This brings us to the question; can such a ground-breaking strategies be systematically conceived and executed? Two eminent management thinkers, W. Chan Kim and Renee Maubrogne, answer in the affirmative. In their brilliant and well-written book they present a systematic and practical framework which tells managers “How to create uncontested market-space and make the competition irrelevant” Kim and Mauborgne call this approach as “Blue Ocean Strategy” contrasting with the traditional approach of head-on competition which they call as “Red Ocean Strategy”. Red ocean strategies tries to beat the competitor within the existing market or industry, within the existing demand and by retaining the existing customer, using traditional methods of cost, operational efficiency or differentiation. On the other hand blue-ocean strategy makes no attempt to engage the rival companies in a head-on competition within the existing market, industry, demand, or customer-base. It aims at making the competition irrelevant by creating new market, new demand and new customer or in other words moves around or away from the existing market-space to an altogether new market-space. As Kim and Mauborgne explain the essence of blue ocean strategy:
“Red oceans represent all the industries in existence today. This is the known market-space. In red oceans industry boundaries are defined and accepted and the competitive rules of the game are known. Here companies tries to out perform their rivals to grab a greater share of existing demand. As the market space gets crowded prospect for profit and growth are reduced¾products become commodities and cut-throat competition turns red-hot and bloody. Blue oceans are defined by untapped market-space, demand creation and the opportunity for highly profit growth—in blue-oceans competition is irrelevant because the rules of the game are waiting to be written.” (Kim, W.C and Maubrogne. R, 2005)
Charting the Map of the Future:
This concept of blue-ocean strategy has hit upon a key-principle in the evolutionary process of Nature, who pursues her evolutionary work not only through incremental variations in the same genre, type or species but also by quantum leaps, which create new types or species. When this principle is applied to corporate strategy, it means exploring unmanifest possibilities through quantum leaps in delivering better value not only to the customer but also to the community and other stakeholders. This brings us to the question what is the nature of the quantum leap, which Nature is contemplating for humanity and earth? This question cannot be dismissed as one of the fads of the new age philosophy because it has practical implications for corporate strategy.
The trends in technology, demographics, life-styles and values are some of the important indicators for understanding the opportunities and possibilities in the womb of the future. But when the future change is not merely an incremental or even a large extension of the present but a quantum leap into a new and unmanifest dimension of life or consciousness, then understanding the essence of this new change acquires immense importance. Most of the trendsetters in strategic thinking have perceived the fact that the future change will be a discontinuous quantum leap from the present. Here are a few statements from some of the leading corporate strategist:
“You can’t look at the future as a continuation of the past—-because the future is going to be different.”
-Charles Handy
“We have to stop trying to figure out what to do by looking at what we have done”.
-Peter Senge
“If you think you’re good you are dead. Success in the past has no implication for success in the future—The formulas for yesterday’s success are almost guaranteed to be formulas for future failure.
-Michael Hammer
However none of the management thinkers seem to have a clear perception of the nature of the future world. Most of the secular and management thinkers of the west consider the future as something inherently unpredictable. The common idea or belief among management thinkers is that no one can predict the future but can create or shape a future out of emerging opportunities. As Gary Hamel states, “ The big challenge in creating the future is not predicting the future—-Instead, the goal is to try to imagine a future that is possible-the future that you can create”. (1998) But the eastern spiritual thought believed that there is an intuition in the spiritual consciousness of our soul which can discern the future intention and plan of Nature for humanity or the world or the possibilities which Nature is trying to bring forward or manifest in the future. But how to test the validity of this eastern belief or spiritual intuition? It has to be viewed in the context of present trends. If a spiritual intuition helps in a deeper and better understanding of the essence or patterns of the present and emerging tends, then it has at least a tentative validity. So in envisaging the future possibilities we have to take into consideration not only the perceptions of the futurists thinkers of the “secular” schools of thought, but also insights of spiritual thinkers and prophets like Sri Aurobindo and Tiel-hard-de-Chardin.
Imperatives of Consciousness
What are the major trends, which are likely to have a profound influence on the future of human evolution especially the future of the corporate world? In the inner psychological realm there is a widespread seeking for a higher meaning and purpose in life and work. After a reign of soul-stifling and self-seeking materialism, people all over the world are seeking for some form of a moral, psychological and spiritual fulfillment in life and work. As Charles Handy, a leading management thinkers articulates the rationale behind this inner seeking for a higher purpose in life:
“The great and most satisfying thing in life, I think is a purpose beyond oneself. If the purpose is only for yourself it rapidly dissipates—-I think that if one doesn’t have a purpose beyond oneself, bigger than oneself, then one ends up disappointed”. (Handy C, 1998)
This inner search for meaning is perhaps felt more in the corporate world than in the other sections or society because of two reasons. The first factor is that in our modern age, it is the corporate world, which attracts the cream of youthful talent and these talented people, when they are professionally and materially satisfied they seek for higher or inward fulfillment. So, Charles Handy, counsels business leaders “if you want to retain talent you have to provide a cause” and the organization have “to provide a purpose, if they want to retain good people”. (1998) The second factor is that people in the corporate world especially the talented ones are more materially and economically satisfied than other sections of the society and therefore seeking for a more non-material fulfillment. As a manager of Dupont points out: “To a large extent the people that are here have gotten to a point where their basic needs are met as far as a sound financial basis for living and are looking to satisfy other internal needs.” (Sanford C, Marg.P, 1993)
So, the emerging trends in the corporate world like the growing recognition of the importance of ethics, values, corporate social responsibility, and “spirituality-at-work” movement are not entirely the result of external or environmental factors as some management thinkers tend to think. There are psychological factors behind these movements. However both the environmental and psychological factors are perhaps the result of some terrestrial-evolutionary factors. Sri Aurobindo, a spiritual seers and thinker, gives an indication of this evolutionary factor in the following passage.
“In the next stage of human progress, it is not a material but a spiritual, moral and psychical progress which has to be made”. (Sri Aurobindo, 1972)
In other words the future evolution will be predominantly in the inner realm of consciousness and not exclusively in the outer material or economic life. The progress which has to be made in the future or in other words, the type of progress which is in harmony with the next quantum leap in the evolutionary journey of Nature is the moral, aesthetic, psychological and spiritual development of the individual and the progressive self-expression of this inner progress in the outer life, leading to a corresponding progress of the community. The concept of this higher evolution or progress is not something entirely new. Most of the great civilizations of the past like the Greece, China and India had this ideal and conceived human progress, individual and collectives, as a journey towards this ideal. But in the ancient world this ideal was mostly confined to the cultural life of the community, in religion, philosophy, art, literature and pursued by a few elite individuals or communities. But in the future this higher progress has to be made not only in the religious and cultural life of the community but also in every activity of the secular life like economics, business, commerce, science, technology, family, community. Any approach to strategy, which ignores this evolutionary imperative, is not likely to be successful in the future.
Exploring the Blue Oceans of Consciousness
What are the implications of this inner imperative for strategy? We have to explore blue oceans of consciousness, which remains untapped in human beings and in the world, or in other words we need a consciousness-approach to strategy. The blue-ocean strategies of the future has to explore the untapped potentialities in the human consciousness, which when expressed in the outer life will lead to the higher evolution of corporate life as a whole in terms of vision, values and wellbeing. In the market this higher evolution will express itself as products and services, which help in the fulfillments of these higher motives and values of human consciousness. To achieve this growth, first of all we have to take a psychological inventory of the corporate world. We have to identify what are the areas of consciousness or faculties which are already well-developed, other areas which are weak or stunted, partially developed or beginning to manifest; and finally those virgin realms of consciousness which remain untapped or in other words we have to map the blue-oceans of consciousness. To do this we must have some understanding of the inner anatomy of the human being.
In the perception of Integral Psychology a human organism is a four-fold being with a physical, vital, mental and spiritual dimension. The physical is the material envelop made of our body. The vital is the source of our sensations, emotions, desire, vital force, anima that animates our body and mind and the seat of the dynamic faculties of action and execution. The human mind in this integral perspective is the source of our intellectual, ethical and aesthetic being. The human mind may be broadly classified into three categories: first is the rational, conceptual and analytical mind which reasons, judges, discriminates and can generates pure abstract ideas; second is the pragmatic mind with the urge or capacity for practical application of ideas; the third is the ideal, ethical and aesthetic intelligence with a sensitivity to higher values like truth, beauty, goodness, harmony, unity. Beyond the body, vital and mind is the soul or the spiritual element in man, which is the deepest and innermost source of human individuality. The soul is the spiritual source of all higher values and is the seat of extra-mental faculties like intuition, inspiration and revelation.
However this classification of human consciousness is not yet complete because it doesn’t include an important region of consciousness, which remain relatively untapped in the present condition of human consciousness, which is the subliminal. According to Integral Psychology, our physical, vital and mental being has a surface and a subliminal dimension. The surface consciousness is the vital and mental element entangled and tethered to our bodily consciousness. A large part of the human-mass lives predominantly in this surface consciousness, which has very limited capacity for knowledge, feeling or action. Behind the surface consciousness and deeper than it is the subliminal, which is the intermediate layer between the surface and the spiritual. The subliminal is not circumscribed within the skin-encapsulated bodily consciousness, and therefore freer and vaster than the surface being. The subliminal vital and the subliminal mind is in more or less direct contact with universal vital and mental energies of Nature and therefore more intuitive, with a much greater capacity for knowledge, feeling and action.
In the past history of the race, the spiritual consciousness is the source of greatness and achievement in religion and spirituality and the subliminal is the source of excellence, achievement, greatness, success and high-performance in the secular life, in thought or action, science, poetry and literature, in the economic, social and political life. In general, all those who are above average or extraordinary receive their inspiration from these deeper layers of consciousness, mostly from the subliminal and sometimes from the spiritual. However, this distinction between the spiritual and secular is likely to disappear in the future. As the psychological and spiritual evolution of humanity proceeds with an accelerated and diffused rapidity in the future, the subliminal and spiritual consciousness will express itself more and more in every activity of the secular life. Those individuals and communities who are able to do it consciously with a clear understanding of the laws and process of these deeper and higher realms of consciousness will be the leaders of the future.
This is, in brief, the anatomy of human consciousness and its total potentialities. Let us now examine how much of this totality of consciousness is manifest in the corporate world. The most well developed part of corporate consciousness is the pragmatic mind, vital force and its faculties of action and execution, with a great capacity for materializing an idea with the highest efficiency and productivity. The next comes the thinking mind of the business academia and the consultants with a considerable capacity for conceptual and analytical thinking, with an emphasis on the pragmatic implications of the idea for organizational effectiveness. The other major strengths of the corporate mind are its drive for innovation, change, continuous improvement, expansion, growth, and its global reach. All these factors give business an evolutionary advantage over other organs. In our modern age business is the most innovative, dynamic and progressive social organism, with a global mind-set and a capacity to think, act and implement on a global scale. As Peter Senge, the inventor of the concept of ‘learning organization’ points out:
“One thing in its favour is that the business organization has a greater capacity for innovation than does government-centrally more than do educational institutions—plus, of course, business is becoming increasingly global. So its scale is commensurate with the scale of really significant issues—For all these reasons, I think there is no institution in the world which has a better chance of developing and maintaining a global and systemic view than the corporation.” (Senge, Peters, 1998)
There is at present a nascent ethical sensitivity and a spark of spiritual aspiration developing in business, which have to be carefully nurtured with a deeper and a more enlightened ethical and spiritual thinking. The aesthetic faculties were still very much underdeveloped in modern business, except perhaps in product design. The subliminal and intuitive mind manifests in innovative thinking in management theory, practice and decision-making much more frequently in business than in other organs of the society.
These are the manifest potentialities in business. Let us now briefly examine the unmanifest blue-ocean in corporate consciousness, which have to be fully developed for an integral self-actualization of the human potential in business. The conceptual mind in business should develop a practical philosophical intuition, by trying to find answer to questions like for example what is the essential inner nature of business and what are the fundamental principles or values, which should govern a business organization. What is the role and function of business in fulfilling the evolutionary destiny of humanity and earth? What is the significance of higher values like truth, beauty, goodness, harmony and unity for the corporate world and their practical implications for enhancing the quality of corporate life? What are the higher aims and values of human life and how to incorporate them in human resources and organizational development policies? Rowan Gibson, best-selling management writer and strategy consultant, in a thoughtful introduction to a book edited by him, raises the following more or less philosophical question which can be an exercise for further development of the conceptual mind in business.
Now that the old fight between communism and capitalism is basically over, will a new fight emerge between the different forms of capitalism? Does the concept of capitalism have a bright future at all? Or has economic progress turned out to be an empty promise?
- What is that truly binds a network organization together? Is it merely information technology? Or does it require something deeper and far more meaningful?
- Is it the organizations responsibility to give people a purpose? (Gibson, Rowan, 1998)
Similarly the pragmatic mind in business has to acquire the ability to incorporate and implement philosophical, ethical, aesthetic and spiritual ideals in the work-life. For example, DuPont, in its effort to become a “Developmental Organization” has made the attempt to implement some philosophical and psychological ideas in its work-life, like for example ‘Being able to utilize every effort to improve performance as an opportunity to develop myself and vice versa’ and ‘Being able to perceive in every decision-making process a total perspective that holds within it a reflection of all the critical elements which make up the whole of business and the nested system of which it is a part.’
The ethical and spiritual impulses and aspirations emerging in business are still in the infant stage. They have to shed their dependence on environmental pressures and utilitarian consideration and founded on a deeper and a more comprehensive ethical and spiritual vision. The main questions, which have to be explored in this domain, are:
- What is the role of ethics and spirituality in motivation and human development?
- What is the basis of the moral and spiritual values discovered by the spiritual traditions of the world? Are there some fundamental laws of Nature, which govern the moral and spiritual development of individual and the collectivity? If yes, can this higher growth of people be pursued in a scientific and methodical manner?
- What are the inner and outer factors in terms of attitudes, faculties, competencies and organizational interventions which have to be created or developed for actualizing the full moral and spiritual potentialities of people?
The other domain of consciousness, which remains very underdeveloped in business, is the aesthetic sense. There is a certain amount of aesthetic sensitivity in product design, packaging and advertising. But for a more comprehensive aesthetic development of the community, the main question, which the corporate world has to explore, is how to create a beautiful and harmonious organizational environment, which leads to aesthetic experience in work. We tend to associate aesthetics with art or poetry. But in a broader perspective aesthetics means creating beauty and harmony in our consciousness and life. In our inner being or consciousness, aesthetics means beauty and harmony in thought, feelings, actions and sensations; in the outer life it is beauty and harmony in the arrangement equipment and organization of the material, economic and social life of the community.
Conclusion:
Corporate Strategy is like a map or compass for steering the corporate ship to its defined goal. However, most of the managerial conceptions on strategy aim at either gaining competitive advantage or to create new space in the market. This is not enough for gaining competitive advantage in the future because there is at present an evolutionary imperative which is driving humanity towards an inner change in consciousness. This inner impetus demands a more inward approach to strategy. The strategic thinking have to move from the external market-space to the inner space of consciousness. The Corporate Strategist of the future has to explore the blue oceans of consciousness which lie untapped within the individual and the collectivity and think-out how to actualize these unmanifest potentialities of consciousness in the every activity of the corporate life. Those who are able to do it will be the leaders of the future.
Courtesy: VILAKSHAN, Journal of the Xavier Institute of Management, Bhubaneswar
References:
- Hamel, Gary, (1998) ‘Reinventing the Basis of Competition’, ed. Rowan Gibson, Rethinking the Future, London, Nicholas Brealey, pp.76-92
- Hammer, Michael (1998) Beyond the End of Management, ed. Rowan Gibson, Rethinking the Future, pp. 94 to 106.
- Handy, Charles, (1998) ‘Finding Sense in Uncertainty’ ed. Rowan Gibson, Rethinking the Future, pp.76-92
- Kim, Chan and Moborgne, Rence, Blue Ocean Strategy, Boston, Harvard University Press.
- Potter, Michael, (1998) ‘Creating Towarrow’s Advantages’, ed. Rowan Gibson, Rethinking the Future, p.48-62
- Prahalad C.K, (1998) Strategies Growth, ed. ed. Rowan Gibson, Rethinking the Future, pp.62-75
- Sanford, Carol and Marg, Pamela, ‘A Work-in-Progress at Dupont: The Creation of a Developmental Organization’ ed. Michael Rai and Alan Kinzler, The New Paradigm in Business, NewYork, World Business Academy pp.168
- Sri Aurobindo, (1972) BandeMataram, Puducherry, Sri Aurobindo Ashram, pp.465
- Senge, Peter, ‘Through the Eye of the Needle’, ed. Rowan Gibson, Rethinking the Future, pp. 122 to 146
