Here is a brief excerpt from an article written by Fred Gluck, Michael G. Jacobides, and Dan Simpson for the McKinsey Quarterly, published by McKinsey & Company. The founder of McKinsey’s Strategy Practice, a London Business School professor, and a chief strategist turned professor describe pain points and possibilities for strategists on the leading edge. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.

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Following a recent meeting of the minds among academic, corporate, and McKinsey strategy leaders, three participants offered to pick up the pen and offer further reflections. Fred Gluck, founder of McKinsey’s Strategy Practice and a former managing director of the firm, expounded on the theme of strategic synthesis. Michael G. Jacobides, a professor at London Business School, explored in greater detail areas where he sees opportunities for academics to contribute to the work of practitioners. And Dan Simpson, longtime head of strategy for Clorox and now an executive-in-residence with the Haas School of Business, at the University of California, Berkeley, shared his experience on the thorny issue of matching strategic thrusts with corporate capabilities.

Fred Gluck on “The essence of strategic management”

Strategies, in my experience, always come from one of three sources: strategic planning, strategic thinking, and opportunistic decision making—with the latter two being the most important.

I think of strategic planning as the job of collecting and analyzing the enormous amounts of data that characterize the modern world and monitoring changes in markets and the competitive environment. This process, which requires frameworks and concepts, is where academics can contribute most in the way of ideas, and strategic-planning groups can add the most value. Strategic planning, defined in this way, provides the raw material and factual basis for strategic thinking and opportunistic decision making.

The next challenge is to synthesize this raw material into what I once called (in a 1978 McKinsey staff paper that was subsequently summarized in the Quarterly) an “integrated set of actions designed to create a sustainable advantage over competitors.” In my view, this is the province of CEOs and their top-management teams, and the quality of the synthesis and the effectiveness of the implementation are determined by the quality of the interaction between those teams and the strategic planners. This is the essence of strategic thinking and strategic management: it’s where creativity is paramount and insights take place, and it’s not something that should be limited to an annual strategic-planning process.

Checklists of strategic leverage points—though I prefer the richer notion of “dimensions,” or “strategic degrees of freedom,” as Ken Ohmae called them in his book, The Mind of the Strategist—are a powerful means of structuring these discussions and stimulating strategic thinking.

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Michael G. Jacobides on “From black swans to grey rhinos: Four ways academics can help managers”

In his famous book, Nassim Taleb admonished us to beware of “black swans,” disasters so rare that managers disregard them and academic models exclude them—and for which we’re therefore not prepared.

Personally, I think this concern is overdone. The real danger is “gray rhinos”: while hard to miss in the zoo, they are surprisingly difficult to spot in the South African bush, obscured as they are by the vegetation. By the time they’re visible, they are already storming toward you, leaving little chance to react. As academics, our job is to help managers tune into the rustling leaves or cracking twigs of an approaching challenge—or opportunity—before it’s upon them. To do that, we must focus on the parts of the environment that matter most and make sure the tools we carry are fit for the purpose.

A recent roundtable discussion involving leading-edge thinkers and practitioners from business schools, corporate-strategy departments, and McKinsey vividly illustrated both the promise and the challenge of turning academic research into actionable insights. Academics are often criticized—fairly, on the whole—for working in ivory towers far removed from the needs of real-world executives on the ground. In my view, we can do a great deal more to realize “gains from trade” between our two worlds, and in this article I set out four areas where that can happen.

Dan Simpson on “Making capabilities strategic”

In a recent exchange with a thoughtful group of corporate strategists, academics, and McKinsey strategy leaders, several of us debated the importance of capabilities. Some participants felt that management writing about them had devolved into theoretical gibberish.

I agree there is some gibberish written, but my experience is that capabilities are practical and actionable, and a critical part of strategy. Strong ones create new growth options. Capabilities are also the conduit between strategy and execution, and a failure to assess capabilities objectively is often at the root of execution problems. What, in retrospect, is ascribed to poor execution instead has its roots in an unexpectedly large gap between a company’s capabilities and the ones needed to deliver the strategy successfully.

This gap exists, in part, because of another mismatch: between the rigor of tools and methods for assessing market attractiveness (which are fairly robust, thanks to the contributions of Michael Porter and others) and those for assessing internal skills and capabilities. Frustrated, many organizations make only a cursory attempt to clarify and actively manage their capabilities. In this article, I offer a few suggestions for doing better.

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Here is a direct link to the complete article.

Fred Gluck is a managing director emeritus of McKinsey and the founder of the firm’s Strategy Practice. Michael G. Jacobides holds the Sir Donald Gordon Chair of Entrepreneurship and Innovation at London Business School. Dan Simpson was the chief strategist at Clorox from 1989 to 2003 and is now an executive-in-residence at the Haas School of Business, at the University of California, Berkeley.