Richard A. D'Aveni
On Changing the Conversation: Tuck and the Field of Strategy
How do you know whether a school has a great faculty? In my view, there is only one criterion: Does the faculty change the topic of conversation among academics, students, and the business community? I have been looking back at the last century at Tuck's impact on the field of strategy to judge our current performance against our historical performance and the performance of our competitors today.
The faculty of the Tuck School have participated in a series of broad and evolving debates with the faculty of the Harvard Business School on the nature of general management and corporate strategy. In each of these debates, Tuck stepped forward with new insight and changed the intellectual conversation. The rivalry has differentiated Tuck, marked us as a leader, and helped us articulate why we exist. It has earned us the respect of the academic and business communities as well as students. How we proceed in the participation of current and future debates is a matter of importance to us all.
At the beginning of the 20th century, Tuck changed the conversation, defining for the first time what professional management meant. Tuck rose to prominence espousing the "scientific school" of management based on Tuck Professor Frederick Winslow Taylor's concept of the corporation as a productivity-seeking, machine-like organization based on hierarchical controls, time and motion studies, and a division of labor that enhanced the efficiency of that then-new invention, the assembly line. The Harvard Business School, founded several years later, rose to its own prominence by changing the conversation and eclipsing Tuck's view of general management. On the basis of the Hawthorne Studies, Harvard faculty created a softer view of general management that incorporated employee satisfaction and its impact on productivity. Their view became known as the "humanistic school" of management. A century later, neither school remains narrowly aligned with either perspective. But this was only the first of four major general management debates that Tuck and Harvard have engaged in as part of their vigorous competition for the claim to be the best general management school in the world.
With the entry of military leaders into business after World War II, military strategy exerted a profound influence upon management thinking. Absorbing this influence, Harvard changed the debate once again, and in the process practically relegated Tuck to follower status in the world of business schools. With a series of case studies, articles in Harvard Business Review, and prominent HBS Press books, Harvard faculty (with some help from others) translated military strategy into modern-day SWOT analysis and planning tools that broke strategy into stages of objective setting, strategic decision making based on analyzing alternatives, and then implementation. Advocates of this "planning school" of management—Harvard among them—said that the structure of an organization must fit its strategy.
But at Tuck, Professor James Brian Quinn seized the initiative, arguing that the planning school doesn't represent the process by which strategy actually gets made. Instead, his "logical incrementalism" holds that companies explore their way toward the future through a collection of serendipitous accidents and interactions between strategy formulation and learning by doing. With Professor Henry Mintzberg of McGill University, Quinn developed the "emergent school" of strategy, in which the management of innovation and chaos, not orderly planning, was most important. In this view, organizational structure actually influences strategy as much as structure follows strategy. By taking on Harvard and the planning model, Tuck began its rise back to national prominence in the 1960s and '70s.
Not to be outdone, Harvard's Professor Michael Porter opened a third debate, changing the conversation by postulating the "positioning school" of strategy. He argued that chaos and innovation were not the source of advantage. Instead, companies create competitive advantage through planned, stable, and disciplined product-positioning strategies such as his three generic strategies: low cost, focus, and differentiation. Not surprisingly, Quinn challenged this hypothesis with a radically different concept that relied on innovation and learning as its core tenets. Quinn asserted that what companies really sell is knowledge, not positioning. As information-processing and knowledge-creating organizations, firms must invest in intellectual and intangible resources and then manage their integration and deployment. Since Quinn developed his view of an "intelligent enterprise," a new generation of scholars—including Tuck's Professor Margaret Peteraf—has been investigating what resources are required and how they should be managed for success. Again, Tuck seized the initiative by changing the conversation.
In a fourth major debate, Harvard's Porter refined the "structural school" of strategy with his famous "five forces" model, which proposes that companies make profit because of industry structure. Barriers to entry, power over buyers and suppliers, and other factors create monopoly power and reduce rivalry so that margins can be increased.
At Tuck, however, my colleagues and I are exploiting a glaring weakness in Porter's view—its static nature. Today's world is full of falling entry barriers, customers have the power, and supplier networks working as allies provide new sources of advantage. So why be nasty to customers and suppliers using monopoly power? And why pretend to be reducing rivalry with competitors when things are getting more hypercompetitive? So Tuck Professors Vijay Govindarajan, Constance Helfat, and I are currently working on concepts that will once again change the conversation, concepts such as hypercompetition, industry revolution, and coevolution. In our view, players create temporary advantages, destroy the profitability of competitors, and then move on to new advantages. The source of advantage in today's world doesn't lie in industry structure but in how you change and disrupt it. These concepts have gathered wide support since I first published Hypercompetition, to the critique of structuralists who argued that you can't make money by escalating rivalry. But many found in the 1990s that lowering prices, raising quality, improving productivity, and decreasing entry barriers (through technological convergence and lower national barriers) all created growth and wealth of an order of magnitude unseen in history.
Now the conversation must change once again. Global recession, political instability in many countries, financial and ethical crises, and the threats of war and terrorism have all increased the chances of failure. Corporate revolution and hypercompetition are now more risky and must be controlled by more judicious strategic action. Tuck Professor Sydney Finkelstein is studying corporate disasters so that we can learn how to avoid the common mistakes and risks present in a more dangerous world. In my recent book Strategic Supremacy, I wrote about strategies that increase stability and control competitive risks, including strategies such as creating corporate spheres of influence, counterrevolutionary strategies, and competitive pressure management through multimarket contacts. And Tuck Professor William Joyce is publishing What Really Works: The 4+2 Formula for Sustained Business Success, his study of the key practices that reduce the risk of failure in today's turbulent environment.
Many important issues of strategy are now being discussed at Tuck. But many of our academic competitors have advantages based on size and influence over distribution channels (such as HBR and HBS Press). And our newest competitors, the consulting firms, have substantial financial resources that they are willing to invest in intellectual capital creation and research. In fact, the consulting firms are routinely spending $1 to $5 million per book published by their partners. Many important issues of strategy are now being discussed, researched, and written about at Tuck. If we want to continue to lead in these great strategy debates and hold onto our rise to the top of the business school pack, Tuck must maintain and expand its channels to the community of scholars and business leaders and continue to invest significant talent and time in intellectual capital development. We must not be shut out by our academic and consulting competitors. This will require perseverance, intellectual acuity, and, without doubt, a lot more financial investment.
Richard A. D'Aveni is professor of strategic management at the Tuck School. This article appeared in the Winter 2003 issue of Tuck Today.