Bert Flier

Following the Herd or Not? Patterns of Renewal in the Netherlands and the UK

How do large firms conduct their strategic renewal journeys in an increasingly turbulent environment? Are there generic industry patterns, or are these renewal journeys country- or firm-specific? To answer these questions, we examine the relative incidence of external versus internal and explorative versus exploitative renewal actions, and their speed, in leading Dutch and UK financial service companies using longitudinal data. The context, content and process dimensions of strategic renewal are distinguished, and research questions about these attributes are formulated and investigated using new metrics. Findings show that while exploration/exploitation ratios are fairly similar for firms across the entire industry, systematic differences are evident between the external/internal renewal ratios of Dutch and UK firms, and that speed of renewal is largely determined at the firm level. Thus we find that industry-, country- and firm-specific factors all influence journeys of strategic renewal in distinctive and complementary ways.

The Changing Landscape of the European Financial Services Sector

The European financial services sector is confronted with major forces that have changed its competitive dynamics and the strategic context. Firstly, we investigate the pace of the diffusion of two forces for strategic renewal (technological innovations and regulatory changes); secondly, we assess similarities in the pace of diffusion across countries; and thirdly, we assess the impact of these developments on the European financial landscape, focusing on five EU countries from 1990 to 1999. Preliminary findings suggest that country-specific patterns of diffusion have decreased substantially, indicating the emergence of industry-generic patterns of diffusion, while the speed of diffusion is increasing within the sector. This will give rise to a hyper-competitive landscape in the beginning of this century. Understanding the emergence of such landscapes creates important managerial challenges for the strategic renewal journeys of both incumbent firms and new entrants, in the financial services sector and in sectors confronted with similar developments

Strategic renewal in the Dutch financial services sector: Renewal Trajectories from a Competence-based Perspective.

How do large well-established firms renew themselves in an increasing turbulent environment? Is there a generic pattern of change or is each change journey rather idiosyncratic? We posed five questions about the nature of renewal patterns. First, how do firms combine external versus internal initiatives in a trajectory of strategic renewal? Second, how does the balance of competence building and competence leveraging evolve in a trajectory of strategic renewal? Third, what are the sequences of action in a strategic renewal process? Fourth, do firms differ regarding speed of their renewal processes? Finally, do different strategic renewal trajectories give rise to different or similar outcomes? Using a simple framework and new metrics we described and analyzed the strategic renewal journeys of the five largest financial service firms in the Netherlands during the period 1990–1997. We found equifinality in viable trajectories of strategic renewal. In four out of five firms, they result in similar outcomes due to mimetic behavior. Nonetheless, one firm showed deviant strategic behavior.