Strategic Centering
Confidence 0.70 · 1 source · last confirmed 2026-06-16
Strategic centering (Rita McGrath, HBR 2026) is the deliberate choice of one organizing principle to guide resource allocation, opportunity selection, and organizational identity — a way to keep strategy coherent when the classical anchors (defensible market positions, stable industries, durable physical assets) are dissolving. It answers a single question: “What are we really about?”
Working definition
A center is the dimension along which a firm pursues a coherent set of opportunities as industries themselves dissolve. McGrath distinguishes it sharply from neighbouring ideas: it is not purpose (too aspirational to guide a decision), not vision (a static destination rather than a dynamic direction), and not core competence (which becomes a prison when the underlying technology shifts). It is closest to Levitt’s “what business are you really in?” but goes further — the question is not just broaden your industry definition but choose the organizing dimension that survives industry dissolution.
A center does three things:
- Bounds the opportunity set without closing it — a common logic, not a fixed product list.
- Resolves capital-allocation dilemmas — competing investment logics collapse into one (McGrath’s worked example: the painkiller-factory-vs-radioligand debate at Novartis simply vanishes once the center is “innovative medicines”).
- Enables “permissionless action” — when everyone shares the center, people act without waiting for approval, raising organizational speed and lowering the return on internal politics.
Why now: dematerialization
The argument rests on a structural shift. In 1975 ~83% of Fortune-500 assets were tangible; today ~90% of corporate value is intangible (software, data, brands, relationships, IP, capabilities). McGrath reads this through Carlota Perez’s technological-revolution model: we sit at the turning point between the installation and deployment phases of the information/telecom revolution. The strategy frameworks most executives rely on — Porter’s five forces, the resource-based view, Blue Ocean — were forged in the “stuff economy” and lose force when value dematerializes. This makes centering a foresight-adjacent move: you choose a center because you anticipate the old anchors dissolving.
The five centers
| Center | Core question | Best when | Risk |
|---|---|---|---|
| Mission | What problem keeps us up at night? | The problem is large/enduring; the addressing technologies are in flux | Mission drift |
| Customer | Whose needs do we understand better than anyone? | Needs are complex, evolving, cross-industry | Conflict with other corporate goals |
| Technology | What capabilities transfer across domains? | Capabilities are deep, on a long trajectory, multi-market | Technological narcissism |
| National ecosystem | What system are we essential to? | Scale/patience beyond private capital; geopolitics create value | Dependency; global uncompetitiveness |
| Friction erasure | What’s still absurdly hard? | Legacy complexity, regulatory fragmentation, poor UX | Scope creep |
Exemplars (from the source): Mission — Novartis, Shopify; Customer — Amazon, Airbnb; Technology — Fujifilm vs Kodak, Nvidia, Shell vs BP; National ecosystem — TSMC, Samsung; Friction erasure — Toss, DBS, the platform giants. The centers are not mutually exclusive, but the clearest strategies have a dominant center and the discipline to subordinate the rest.
Relationship to other wiki concepts
Centering is a lens within strategy — it sits upstream of positioning and value questions: it chooses the dimension along which the firm will create value, which the strategy page’s value-stick lens then measures. It is also a dynamic-capabilities output: the sense→seize→transform cycle, run under dematerialization, produces a center that directs which seizing and transforming moves to make. Friction-erasure centering in particular is a dematerialization engine (digital is the ultimate friction remover).
Debates and supersession
- Is centering genuinely new, or a relabel of focus/“what business are you in”? McGrath positions it as a successor to Levitt and to the stable-industry frameworks (Porter / RBV / Blue Ocean). The novel claim is the dematerialization premise: centering matters because industries dissolve, not merely because focus is good. Single-source so far; watch for empirical or second-practitioner corroboration before hardening.
- Single-source caveat. This page rests on one HBR practitioner article (not an empirical study). Confidence is deliberately at the single-source floor.
Related concepts
- strategy — centering is one of its modern lenses, alongside theory-of-winning (Martin) and the value stick (Oberholzer-Gee).
- dynamic-capabilities — centering as the organizing output of sense/seize/transform.
- strategic-foresight — the dematerialization/turning-point read that motivates choosing a center.
Open questions
- Do the five centers hold up empirically, or are they a post-hoc taxonomy of well-known firms?
- How does a firm recognise it has drifted from its center early enough to recenter (Airbnb “founder mode” is the source’s only recentering example)?
- How does centering interact with the AI-era adoption question — is “AI capability” a technology center, or a cross-cutting enabler of any center?