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Article Excerpt
Introduction
A familiar axiom in business is that change is the only constant. The business environment is not only fast changing, but also changing at an increasing rate, putting more pressure on firms to become "change friendly" and encourage individual and organizational development at all organizational levels (Lawler and Worley, 2006). Managers in organizations seeking to become more change-friendly may want to focus more on coaching employees' long-term career development and less on supervising their daily work (Hammer and Champy, 1993). One coaching method to improve managerial effectiveness is guiding individuals through development of a personal strategy (Covey, 1989). Covey and others discuss the benefits of goal-setting and focusing on the future. However, these approaches do not help with assessing the current situation and building individual strategic value for the future. This paper addresses this shortcoming by adapting the resource-based view, a business strategy analytical method, to the individual level of analysis and by using the resource-based view to coach individual performance and improve organizational effectiveness.
Personal Strategy as a Process
Strategic thinking can be viewed as a three-stage process: understanding the current situation, developing a vision of a desired future, and shifting the deployment of organizational resources and capabilities to realize the desired future situation. Most personal strategy discussions use goal-setting to envision a desired future (Goldratt and Cox, 2004; Covey, 1989). However, strategically analyzing the current situation and making the necessary changes in resource allocation also are important steps to developing a personal strategy. The most valuable output of this process is the increased self-awareness produced by self-analysis and discussion between the individual and the manager-coach, and not the development of a precise, step-by-step strategic plan. Self-awareness is an essential element in emotional intelligence (Goleman, 1995) and critical to improving individual performance and organizational effectiveness. An applicable and appropriate cliche may be that a personal strategy is as much about the journey as about the destination.
The process builds on the concept that strategy is about deploying resources and using capabilities to generate above-average returns (Rumelt, Schendel, and Teece, 1991). The resource-based view suggests that the value, rarity, difficulty of imitation, and degree to which a firm's resources are well used determine whether above-average returns are generated. Applying the resource-based view at the individual level is intuitive, and this paper guides the reader through the process. However, the fundamental goal of this process is to encourage a discussion about personal strategy, not to determine the precise value of any resource or strategy.
We begin with a brief review of the resource-based view of business strategy, followed by discussion on applying this view to individual assessment illustrated by three cases. The paper will then suggest implications for managers and offer conclusions.
The Resource-Based View
The resource-based view is a modern extension of David Ricardo's 1817 discussion that some resources may provide more economic advantage to their owners simply because the availability of those resources is fixed and limited (Ricardo, 1817). The modern strategic approach to the resource-based view holds that a firm's resources--its tangible and intangible assets--and how they are deployed determine whether a firm is capable of generating a sustained competitive advantage (Barney and Arikan, 2001). The underlying concept is that firms with similar resources produce similar--usually breakeven--results, and firms with superior resources that are valuable and rare produce superior results if other firms cannot buy or duplicate them. Superior resources that can be bought or duplicated quickly become commonplace and lose their superior. Superior resources that cannot be imitated can retain their value and give a firm the ability to generate superior results over time (Peteraf, 1993).
Some resources are difficult to imitate because they depend on an historical event, e.g., patents or mineral rights. Other resources are difficult to imitate because they can only benefit the firm that developed the resource, e.g., the Coca-Cola brand name is valuable only to Coca-Cola and not to Pepsi Cola. Still other resources may be difficult to imitate because they consist of specific locations, and comparative locations are not available, e.g., the limited amount of large tracts of land in Manhattan (Peteraf,...
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