From Battlefields to Boardrooms: Rethinking Strategy for the AI Era

Strategy as a concept has come from the military. This was highlighted for the first time by two INSEAD professors Renee Mauborgne and W Chan Kim in their much celebrated book "Blue Ocean Strategy".
The general of armed forces devised sound strategy to defeat opposition army and capture a landmass.
There were generals like Alexander the great and Julius Caesar who mastered the art of winning. They often won against numerically superior armies and credit was given to their superior strategy.
But today, we don't have any landmass to capture. Nowadays, "strategy" word is more often used in corporate boardrooms than in the battle fields.
Michael porter was termed as strategy guru when he came out with his seminal book "competitive strategy". He argued that there are three pillars of competitive strategy viz. cost leadership, differentiation and focus. Organisations either focus on cost leadership i.e. Delta airlines or on product differentiation like apple.
This was around four decades ago.
Meanwhile "Blue Ocean Strategy" was coined by two INSEAD professors in the first decade of 21st century. It emphasises on increasing the horizon, changing the rules of the game and making the competition irrelevant.
Since then many changes have taken place.
In AI era, cost is being increasingly reduced by off-loading many tasks to AI. Companies are reducing their workforce to the tune of 30 to 40 percent almost every year.
Changes are taking place at a much faster pace than ever imagined.
As per the nomenclature, strategy is supposed to be the long term while tactics is short term.
But we now observe that shelf life of strategy is getting reduced.
However, there are some core parameters which are not impacted by faster pace of innovation or generative AI for that matter..
These parameters are - company values, employee engagement, customer focus, relentless pursuit of innovation and sustainable growth..
Organisations should include these parameters as the central theme of their strategy.
They don't change easily for example 3M is the most innovative company since decades thanks to their relentless focus on innovation.
A long term strategy ought to include the parameters which are long term in real sense and sustainable.
Despite the changes taking place, customer focus is a must. Companies who survive are the ones who take into account the needs of their customers. Eventually, customers are the ones who fill the pockets of the companies. So, customer focus should form an important element of strategy.
While formulating strategy, companies must be aware of their blind spots. A classic case is that of Nokia. A company which once had sixty percent of mobile phone market share had to eventually sell its mobile handset business to Microsoft.
What went wrong in their strategy? They were just oblivious of the innovations taking place around the globe to bring in a new operating system called Android and new phone called smartphone.
Samsungs of the world gained market share at the cost of Nokia.
Similarly, pager companies lost their sheen once mobile companies came into the picture.
So, an important element of strategy is to keep scanning the environment.
HMT (Hindustan Machine Tools) watches were once a prized jewels. But today they are nowhere to be seen. They were too arrogant to innovate. They had all the luxuries of operating in a monopolistic market. But they faltered in their strategy.
Once the market was thrown open thanks to liberalisation policies of the government , HMT started losing its market share and Titan with its foolproof strategy captured the market share significantly.
With the above examples, it is now amply clear that an organisation's strategy must take into account innovation, environment scanning and customer focus.