Biography

Costas MARKIDES

2009 ranking: 47

Costas Markides

Educator (2005 Ranking: 49)

Constantinos C. Markides is Robert P. Bauman Professor of Strategic Leadership at London Business School. Born in Cyprus in 1960, he studied economics at Boston University, earning a master’s degree. He subsequently received an M.B.A. and D.B.A. from Harvard Business School.

Markides has made a number of contributions to strategic management thinking. In “To Diversity Or Not To Diversify?” (a Harvard Business Review article), he discussed some key questions tied to business diversification. Should companies diversify? What does that mean? Should a company move fast or slow in its diversification? To address such questions, he pointed to a number of success stories, including the Canadian company, Bombardier, which started out during World War II as a producer of vehicles for snow-covered terrain. By the 1990s, it was one of the world’s biggest manufacturers of buses and watercraft. Markides illustrates how Bombardier’s successful diversification was a slow and cautious affair. It might also be argued that it wasn’t really diversification at all, just a stretching of their initial emphasis of specialized transport vehicles. For Bombardier the rewards for its diversification were considerable, but such rewards do not come to everyone, especially if they make the wrong investment calls, says Markides.

As a specialist in strategy and someone with Greek roots, Markides is aware that strategy comes from the Greek verb “to lead.” Strategy, therefore, involves dynamism and movement. In All the Right Moves (1999) he proffers the view that successful business strategy should focus on asking (and finding the answers to) three fundamental questions:

• Who should I target as customers?
• What products or services should I offer them?
• How can I do this in an efficient way?

But finding a successful strategy is also about creativity. Business leaders should consider stretching their strategic muscles by asking questions from offbeat or unorthodox angles. Perhaps the poorest way to manage strategic decision making, he argues, is the classic corporate mode of producing mountains of data and analyzing it ad infinitum hoping that salient answers to the key questions will somehow evolve. Markides also cautions that a successful strategy is volatile and often has a short shelf life. Just because a strategy worked for your company yesterday doesn’t mean it will work tomorrow. Thus, leaders must know the right strategy moves but just as importantly know how to deploy a strategy creatively. It is also important to know when to break the rules of the game.

In Fast Second (co-authored with Paul Geroski in 2004), Markides uses the metaphor of a landscape to describe the business world. There are new areas to be explored. This is done by people and organizations he terms “colonists.” These are the firms that routinely take risks, face dangers and uncertainties, and often have to come up with new and innovative approaches to survival. In business terms, these are the people who make breakthroughs in any area —whether technology, pharmaceuticals, or even service providers. But colonists are generally hopeless at bringing the fruits of their efforts to market.

For marketplace success, bigger organizations with a different mindset are needed. These are the “consolidators.” They scale up the breakthroughs of the colonists and make them fit for consumers to consume. The two kinds of businesses are like different species; rare, if not unknown, is the organization that can do both. The colonists are good at being colonists, not at being consolidators. And vice versa.

But this paradigm isn’t appreciated. Many consolidator organizations enviously eye the colonists with their efficiencies and their zest for success. They sometimes attempt to become more entrepreneurial, or they set up incubators, or they announce that they are “going back to the garage.” Such attempts, Markides believes, are futile. Such attempts reveal, minimally, a sense of corporate arrogance — maybe even corporate hubris. Consolidators should realize their advantages and be content to capitalize on them. One of these is a first in the market advantage, allied to but separate from first mover advantage. Colonists are the best first movers, but they’re unable to make much market success. Ultimately, large-scale success belongs to the organization that can bring an idea to the market in a big way. Consolidators should be more than happy to be fast seconds because they are emulating the likes of corporate brethren such as Microsoft and Canon.

Essential Reading

a href="http://forum.london.edu/lbsbiogs.nsf/(httpBiographiesBySurnameSearch)/markides">http://forum.london.edu/lbsbiogs.nsf/(httpBiographiesBySurnameSearch)/markides

(alone)

Diversification, Refocusing, And Economic Performance (1995)

“To Diversify or Not to Diversify?” Harvard Business Review, November-December 1997, pp. 93-99.

All the Right Moves: A Guide to Crafting Breakthrough Strategy (1999)

(with Paul A. Geroski)

“Colonizers And Consolidators: The Two Cultures of Corporate Strategy,” Strategy and Business, Fall 2003, pp. 46-55.

“The Innovator’s Prescription: The Art of Scale,” Strategy and Business, Summer 2004, pp. 51-59.

Fast Second: How Smart Companies Bypass Radical Innovation to Enter and Dominate New Markets (2004)

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