Well-crafted strategies are road maps to places that yield competitive advantage and generate value for the firm. But once a firm has used its strategy to take it to a destination, the strategy becomes obsolete. Old strategies don’t necessarily lead to new sources of competitive advantage or value creation.
In contrast, theories provide cause-and-effect models about how value is created. A good corporate theory reveals hypotheses—and leads to strategies—about how a firm can create the most value.
In this interactive, Harvard Business Review webinar, Todd Zenger shares insights from his HBR article, “Start with a Theory, Not a Strategy.” He also explains how theories are different (and even more important) than strategies, and describes the key elements of good corporate theory.