The Lords of Strategy: The Secret Intellectual History of the New Corporate World

THE LORDS OF STRATEGY: THE SECRET INTELLECTUAL HISTORY OF THE NEW CORPORATE WORLD offers the untold history of business leaders who thought up the strategy revolution as it applied to business pursuits. Four men obsessed with discovering how businesses gain competitive advantage over others created the strategy paradigm: this history is perfect for any business library.

Not one usually to be impressed by this genre, I've found myself both fascinated and satisfied by Kiechel's witty and entertaining history of what serve - for better or for worse - as the theoretical frameworks of modern business strategy. This rendition of the strategic evolution undergirding modern corporate practice is at one point hilarious, at another strikingly (and disarmingly) insightful. Kiechel's work will most certainly top the charts as a must-read for any professional entrusted with the dealings of a newly globalized corporate community, including management consultants, investment bankers and asset managers.

As Walter Kiechel III explains in the Preface, Bruce Doolin Henderson and his associates at the Boston Consulting Group (that he founded in 1963) launched the corporate strategy revolution. Kiechel then suggests that understanding it requires getting beyond three common beliefs: "The first is that at bottom, ideas don't really matter much in business." In fact, ideas that are sharp with a purpose to answer questions, solve problems, and facing challenges are essential. Another common belief to be overcome is that strategy has no intellectual history. In fact, "smart companies throughout history have had a sense of how they wanted to make money...What companies didn't have before the strategy revolution was a way of systematically putting together all the elements that determined their corporate fate, in particular, the three Cs central to any good strategy: the company's costs, especially costs relative to other companies; the definition of the markets the company served - its customers, in other words - and its position vis a vis competitors." The third common belief to be overcome is that consultants are at best "hangers-on of only occasional, limited usefulness" or at worst "rapacious parasites whose slightest presence in the corporate body indicates gullibility, weakness, and insecurity on the par of its leadership." The "lords" to which the book's title refers include Henderson, of course, as well as Bill Bain, Fred Gluck, and Michael Porter. Kiechel devotes a separate chapter to each and frequently refers to all of them throughout his lively narrative. Moreover, he also discusses the significance of several others who - to varying degree - also participated in the "invention" of corporate strategy. "This is a story not if paradigm shift, but of the bit-by-bit creation of the first comprehensive paradigm that pulled together all of the elements most vital for a company to take into account if it is to compete, win, and survive." Already I have suggested several recurring themes in Kiechel's brilliant account of what was assembled "from the spoils of many an intellectual and business battle" that began in 1963. There is another theme that also needs to be mentioned: several significant "jolts" that sometimes seemed like the Four Horsemen of the Corporate Apocalypse. Specifically, the first, "though not necessarily chronologically, was the deregulation of industries in which competition had traditionally been held in check by government rules, as in airlines, banking, and telecommunications. The second consisted of the ever-widening effect of new technologies, including the increase in computer power, its spread to desktops everywhere, and the coming of the Internet. In the third, capital markets freed themselves up, shedding inhibitions against hostile takeovers, establishing a genuine market for the control of companies. The fourth horseman usually goes by the name [begin italics] globalization [end italics], the fact that companies find

Those who have studied business have probably heard of the Boston Consulting Group Matrix, the McKinsey 7-S Framework, Michael Porter's Value Chain, and various other strategy tools. But where did they all come from, and how did the theory behind them develop? The former managing editor at Fortune Magazine, Walter Kiechel III, explains the history of ideas in the field of strategy over the past 40 years in this book. This is the most interesting book on strategy that I have read, because it tells the story of the individuals and consulting firms who created the strategy concepts and tools which revolutionised corporations around the world towards the end of the 20th century. The idiosyncrasies of brilliant strategists are described, as are their struggles to have their ideas accepted. The author's personal knowledge of the major players makes the narrative more compelling. The author even-handedly discusses both the good points and the bad points of the various strategic ideas, but on the whole he is an admirer of the lords of strategy and tends to exonerate them from blame for the mess the world now finds itself in, whereas others might be inclined to accuse them of encouraging companies to undertake unwise levels of risk in order to maximise short-term shareholder returns. I found some parts of the book a bit dry, but for the most part it was highly engaging.

In the Lords of Strategy, Walter Kiechel deftly unpacks many of the ideas that many of us take for granted -- from competitive advantage to value chain to core competencies -- and explains their history, impact, and relevance with insight and wit. He takes material that could have been as dry as day-old toast and instead creates an engaging and compelling read. Kiechel approaches his subject neither with reverence nor venom: he helps us understand the pioneering thinkers who created the world of "business strategy" by exploring the ways in which they reshaped the corporate landscape, how their personalities influenced their work, and the lasting impact (for better and worse) that they have had. He's equally prescient about how the Lords bolstered the careers of their client CEOs and enriched shareholders (eventually) -- and why, especially for middle managers, a deep consulting engagement can feel more like a rectal exam than an exercise in improving the company. He traces the rising dominance of left-brained analytical thinking in the consulting firm and the executive suite as well as the increasing "fierceness" of capitalism. I've learned more reading this book than in any 10 average business books (and I've read a lot of them). It really is a must-read for anyone in business or entering the corporate world. It will explain much, prepare you well, and expand your understanding of contemporary business thinking. Full disclosure: the author is a former colleague. The principal impact that has had on this review is that I can say unabashedly that in this book he demonstrates the same erudition, wit, and ability to bring together seemingly disparate ideas, people, and events into a thoroughly compelling narrative just as he did when we worked together. I've already purchased multiple copies of this book for associates so my money is co-located with my mouth.