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Using a database that goes back to 1850, two leading business management researchers at INSEAD concluded that there are permanently smart strategic moves. But there's no such thing as a permanently great company or a permanently great industry. All industries rise and fall, as do companies.
Boards of directors and executives of global corporate governance for global firms, large enterprises, private businesses, and medium-sized firms are overlooking a key lesson. It's not the industry a firm is in, per se, that leads to wealth creation. An industry's and a company's downs and ups are substantially attributable to smart strategic moves.
Across industries and continents, the strategic move that matters most to both an industry's and a company's long-run profitable growth is the repeated creation of new market space. Without such value innovation, firms become irrelevant or are overtaken.
Value innovation occurs across industries, across countries, across companies. It is a global power. Enterprises tend to focus their money-making strategies, assessments, and the long view on their own industry. Yet there are other strategic analytical frameworks and models that can reveal central SWOT (Strengths, Weaknesses, Opportunities, and Threats). Strategic assessment needs to occur in a milieu of world commerce in constant flux, where whole industries rise and then often die.
The lesson learned from 150 years of commerce has implications for chairmen of boards, executive boards, chief executives, managing directors, senior management and their business strategy and portfolio advisors . Over a 30-year cycle, the focus of commerce--where the money is made--shifts 100 percent. Some industries die, some persist, and new industries are constantly being born. Those with the responsibility for creating the future for the enterprise need to factor into their plans the fact that the biggest industries today are unlikely to be the biggest industries 30 years from now. The big growth in profit potential in the last 30 years has been in computers, software, gas-fired electricity plants, cell phones, and coffee bars. Not one of those industries really existed in the early 1970s.
The trouble is that the basis of most strategic thinking--and the corporate strategy consulting industry it has spawned--lies in strategies based on what you can see now. Consultants and applied knowledge academics tell us there are winners and losers. But business research shows it's not a zero-sum game: the number of market spaces that can be created is infinite.