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1.1 The Challenge for Business Leaders

Your organization’s history is fundamental to its future. What you can achieve tomorrow depends on what you have today, and what you have today is the total of everything you have built up, and held on to, in the past. This is true even for new ventures when the entrepreneur brings experience, credibility, and contacts to bear on creating the new business.

It also holds true for nonprofit activities: voluntary groups, government services, and nongovernmental organizations (NGOs). They too can only achieve what is possible with their current resources, and if more resources are needed then existing ones must be used to get them. A charity will not appeal to many new donors, for example, unless it has built a reputation.

When the causes of performance through time are not understood, organizations make poor choices about their future. They embark on plans they cannot achieve and fail to assemble what they need in order to achieve even those plans that might be feasible. The catalog of failed initiatives, in every sector and through all time, would make a thick book indeed. These failures are costly not only in money but also in terms of wasted and damaged human potential. The better news is that organizations are often capable of far more than they imagine, if only they choose objectives well and piece together the necessary elements.

Improving an organization’s performance is not just a matter for top management. Given the right tools, everyone with influence over the way in which any part of their enterprise functions can make a difference. Challenges may be focused on an individual department or span the whole organization; they may range from very small to truly huge; and they may call for urgent measures or a long-term approach. This book focuses on the content of strategyA method for guiding management's choices about where to compete—which customers to serve, with what products and services, and how to deliver those products to customers effectively and profitably.—what the strategy actually is—in contrast to the equally important issues of the process by which strategy happens in organizations (Mintzberg, Lampel, Quinn, & Ghoshal, 1997).