Strategic IQ - Harvard Business School MBA Program

Strategic IQ

Course Number 1291

Professor of Management Practice John R. Wells
Winter; Q3Q4; 3 credits
13 extended sessions

Course Overview

The focus of SIQ is on a leader's responsibility to drive strategic innovation and change. We examine why firms so often fail to change their strategies in a timely fashion and the heavy penalty they pay for not doing so. We then identify what leaders must do to sustain superior performance. In the process, we study over 30 cases and 60 protagonists battling with the challenges of strategic change.

The course is of prime interest to those aspiring to general management, responsible for formulating and implementing strategy in fast-changing environments. It is also valuable for those who intend to advise such individuals. It is also helpful for those endeavoring to distinguish firms that are more likely to deliver long term value.

Course Structure

The course is integrative, drawing on each of the courses in the First Year Required Curriculum to show how strategy is developed and turned into action. It covers strategic, structural and human behavioural issues. The course addresses specifically why some companies fail to change in a timely manner, diagnoses the causes of this inertia and identifies how this might be overcome.

The ability to adapt to a changing environment is a measure of intelligence. So why do firms display low IQ, and what can be done to improve their score? We look at three main sources of inertia, strategic, structural and human, and how they can be overcome. In the process, we measure key drivers of IQ so that firms can compare their scores against competitors.

Course Design

The organizing principle of the course is to identify pairs of successful companies in the same industry where one suddenly failed but the other proved to be more sustainable. In this way, we hold many variables constant when we look for what really drives long term success. For instance, Kmart and Wal-Mart both started in discount retailing the same year (1962) and Kmart was the early winner, quickly growing to 10 times the size of Wal-Mart and becoming the stock market darling of the sector. But Kmart suddenly collapsed while Wal-Mart continued to grow. What went wrong at Kmart?

After a brief introduction and overview, the course is organized into three core modules. In the first module, Smart Strategy, we examine why firms fail to see the need to change their strategy, or cannot seem to find a solution to their problems, and discuss and what they can do to boost their strategic IQ.

The second module addresses the problem firms often face when they know they need to change their strategy but the organizational structure gets in the way. Smart Structure, examines how capacity for change can be designed into organizations. It addresses both formal and informal structure and identifies levers for creating greater responsiveness in traditional organizations as well as identifying ways of fundamentally reshaping the way business is done with self-organizing, edge based organizations.

The capacity for change in an organization is ultimately limited by the capacity and commitment of its people to change. The third module, Smart Minds, focuses on how to pick the right people and shape the organizational context to make people more open to change.

We finish up with a summary module that applies the principles of strategic intelligence to corporate rather than business unit strategy.

The course includes cases from a wide range of sectors, including fashion, wine production, discount retailing, second hand car sales, outdoor advertising, financial services, social networking, telecommunications, strategy consulting, the military, and sports. The course draws on the disciplines of economics, sociology, psychology, anthropology, neurology and evolutionary biology.

Course Profile

Winter Term, Quarters 3 and 4
13 double sessions taught on Tuesday afternoons from 3.30 pm to 6:15pm with a 15 minute break for refreshments: 3:30-4:45 and 5:00-6:15
Self- administered exam.


3 Credits
50% class participation
50% exam


Given the high dependence on knowledge of the first year Required Curriculum, unfortunately, no cross registrants will be considered.
The course will not accept auditors

Reading List

We will discuss a number of broad topics and many cases in numerous sectors in the course. We will draw on cases you have already discussed in the Required Curriculum and add many more for comparison. There will also be a number of readings from the book, Strategic IQ: Creating Smarter Corporations. A list is provided below.

Please note that there may be changes to the course, but the list is provided to signal the heavy workload and to help you make an assessment of whether the course is for you.


Session One Topic: Why Do Successful Companies Fail?
Sector: Discount retailing
Case: Rise of Kmart
Case: Rise of Wal-Mart
Sector: Imaging
Case: Kodak and the Digital Revolution
Case: Fujifilm:
A Second Revolution
Reading: Introduction


Session Two Topic: Diagnosing Low Strategic IQ
Sector: Multiple
Case: Energis (Telecommunication services)
Ben and Jerry's (Ice cream)
Mondavi (Wine)
Reading: Chapter 1.1: The Need for Smart Strategy
Reading: Chapter 1.2 Low Strategic Intelligence
Reading: Chapter 1.3: What is Strategy?

Session Three Topic: The Spectrum of Strategic Intelligence
Sector: Consumer Electronics Retailing
Case: Rise of Circuit City
Case: Rise of Best Buy
Case: Fall of Circuit City
Case: Best Buy in Crisis
Reading: Chapter 1.4: Moderate Strategic Intelligence
Reading: Chapter 1.5: High Strategic Intelligence

Session Four Topic: Measuring Strategic IQ
Sector: Auto Insurance
Case: Progressive
Case: Allstate

Session Five Topic: Smart Strategy
Sector: Multiple
Case: JC Decaux
Case: CarMax


Session Six Topic: From Smart Strategy to Smart Structure
Sector: Natural foods retailing
Case: Whole Foods
Case: Wild Oats
Winning in Natural Foods
Reading: Chapter 2.1: The Need for Smart Structure
Reading: Chapter 2.3: Formal Architecture

Session Seven Topic: The Spectrum of Structural Intelligence
Sector: Fashion
Case: Li and Fung
Case: Inditex
Case: Gap
Reading: Chapter 2.2: Smart Asset Management

Session Eight Topic: Leveraging Informal Architecture
Sector: Social Networking
Case: Friendster
Case: Myspace
Case: Facebook
Case: LinkedIn
Reading: Chapter 2.4: Informal Architecture
Reading: Chapter 2.5: Towards Smarter Structure


Session Nine Topic: From Smart Structure to Smart Minds
Sector: Banking
Capital One
Reading: Chapter 3.1: The Need for Smart Minds
Reading: Chapter 3.2: What is a Mind?

Session Ten Topic: Hiring the Right Minds
Sector; Professional Services
Reading: Chapter 3.3: Hiring Smart Minds

Session Eleven: Topic: Satisfying Basic Needs
Sector; Professional Football
Case: NFL
Case: Bill Bellichick and the Cleveland Browns
Bill Bellichick and the New England Patriots
Reading: Chapter 3.4: Addressing Basic Human Needs

Session Twelve: Topic: Harnessing Insatiable Needs
Sector: Military
Case: Riding the Black Horse
Case: Riding the Black Horse (B)
Case: Winning in the Mojave Desert
Reading: Chapter 3.5: Harnessing Insatiable Human Needs


Session Thirteen: Topic: Corporate Strategic Intelligence
Sector: Multiple
Case: Danaher
Case: Radiometer
Case: Disney
Case: Cadbury