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Aligning corporate strategy and strategic action is a key top management responsibility. Such alignment is viewed by some as driven by the strategic intent of the CEO who sets ambitious targets within a 10 to 20 year time horizon, relentlessly develops the firm's capabilities, and transforms the basis of competition in the industry to the firm's advantage.1 This is an inspiring view, to which many CEOs no doubt aspire. But it is a view premised on top managers having extraordinary foresight. Extraordinary foresight can, of course, always be assumed to explain successful strategies after the fact. But there is convincing evidence that it is very improbable in high-technology industries.2
If extraordinary foresight is unavailable, how can top management make strategic decisions in high-technology industries? Our answer to this central question is based on research concerning Intel Corporation's strategic evolution3 as well as our analysis of more than a dozen case studies of major players in the information processing and telecommunications industries.4
Strategic Dissonance
Our key premise is that in extremely dynamic industries(5) alignment between a firm's strategic intent and strategic action is not likely to last. Inevitably, strategic actions will begin to lead or lag strategic intent. Such divergences between intent and action cause "strategic dissonance" in the organization. While new strategic intent is necessary to lead the company out of strategic dissonance, our key proposition is that new strategic intent must be based on top management's capacity to take advantage of the conflicting information generated by strategic dissonance.
Not all dissonance, of course, is strategic. Companies continuously experience some level of dissonance as a result of routine disagreements and conflicts because no division of labor is ever perfect and no project ever unfolds exactly as planned. Companies need managers precisely to mediate and resolve these sorts of frictions. Dissonance, however, is strategic when it signals impending industry or corporate transformation. Here are three examples from Intel.
In 1970, newly-founded Intel Corporation introduced dynamic random access memory (DRAM) products in the market. DRAMs replaced magnetic core memory as the standard technology used by computers to store instructions and data as they executed programs, and Intel became the first successful semiconductor memory company in the world. Throughout the 1970s and early 1980s, DRAMs continued to be...