Briefing Reading - Assignment Example

Strategy from the Inside Out: Building Capability-Creating Organisations Strategy from the Inside Out: Building Capability-Creating Organisations In 1991, Citibank went through a difficult time that pressured the CEO John Reed to try everything possibly to overcome the problems that Citibank was going through. Reed had two choices: either to try to strengthen Citibank’s presence in profitable markets like Japan and Germany by copying regional rivals like Deutsche Bank, or to try to offer new services and become more efficient (Miller, Eisenstat and Foote, 2010: p.273). This paper will examine how Citibank (Citigroup) and two dozen other firms have managed to escape this predicament to grow sustainable capabilities.

According to Miller et al (2010: p.273) these firms began by discovering their hidden resources, also called asymmetries, which included building on their own unique potentials, relationships, hard-to-copy assets, knowledge and experiences. Over time, these firms were able to develop several organizational processes and designs in order to find these asymmetries, turn them into capabilities and gear them across the necessary market opportunities. As stated by Miller et al (2010: p.274), they asymmetries are hard-to-copy ways that create a difference between a firm and its rivals.

For this reason, Reed discovered that his bank was different and developed ways to make that difference a valuable asymmetry that his rivals would not copy and later found a profitable market that valued it. Shana Corp, a private Canadian software company, exhibit a similar path to that of Citibank. Over time, the managers of Shana realized that the company had developed unique capabilities, which included valuable kinds of work that its rivals could not do as fast or better. This allowed the company to exploit and extend its competitive advantage over other firms.

In short, the managers of Shana were able to focus on what the company was able at, reflected on it, developed and found clients that would benefit from its new capabilities (Miller et al (2010: p.274).There are three imperatives of inside-out strategy, which include discovering of asymmetries and their potential, creating capability configurations by design, and pursuing market opportunities that build on and leverage capabilities (Miller et al, 2010: p.275). It is difficult for firms to develop their hidden resources unless they have some potential edge.

For this reason, firms need first to discover their asymmetries and potentials, which will serve as starting points for creating advantages as they are hard to copy. Thus, to find potential asymmetries, managers are required to do an outside and inside search. An outside search requires evaluation of the obvious external asymmetries while an inside search requires a thorough search of useful asymmetries that are buried deep within a company.To conclude, Miller et al (2010: p.276) state that organisation design enables the evolvement of sustainable core capabilities.

It also builds and supports capabilities by embedding them in cohesive configurations that are energized by design through enhancing the capabilities. According to Miller et al (2010: p.281) it is essential for managers to learn to pursue and trade off opposites when pursuing a strategy from inside out. They must be able to balance reflection and action, selection and variation, and resources and opportunities, as well as make the organisation design their competitive advantage. Moreover, organisation processes and designs that are well-conceived enable managers to identify and develop valuable asymmetries and potential capabilities, create capability configurations and leverage them across the appropriate market opportunities (Miller et al, 2010: p.283).Bibliography Miller, D.

, Eisenstat, R. and Foote, N. (2010). ‘Strategy from the Inside Out: Building Capability-Creating Organisations’ in De Wit, B. and Meyer, R., Strategy: Process, Content, Context. An International Perspective, Cengage Learning EMEA, Hampshire. .