Background

Born in Vladivostock to a Russian mother and an American diplomat father, Ansoff grew up in the new Soviet Union.  His family moved to New York and Ansoff studied mechanical engineering and physics.  After service in World War II he took a doctorate in applied mathematics.
In 1948 Ansoff joined the Rand Foundation, an influential think-tank of the postwar years that had a focus on military problems.  He worked on the strategic problems of NATO, and the methodology he developed for strategic problem-solving was later to prove a powerful influence on his development of theory and practical technology for business.

He joined Lockheed as a long-range planner and was responsible for Lockheed's program of diversification.  He said that this job gave him the opportunity to learn how business works and how to identify the key variables and relationships in complex problems.  Promoted to vice president and general manager of Lockheed Electronics Company where he was involved in downsizing the organisation which gave his first hand experience of management.

He was not fulfilled by his roles at Lockheed.  In 1963, he took a professorship at Carnegie School of Industrial Administration, and, shortly after joining Carnegie, published 'Corporate Strategy'.

He next moved to become founding dean of the Graduate School of Management at Vanderbilt University in Nashville, Tennessee, where he created a pioneering new business school, based on the concept of strategic management, to train 'change agents'.

Thinking

Henry Mintzberg described Ansoff's 1965 book 'Corporate Strategy' as "the most elaborate model of strategic planning in the literature".  Since the publication of 'Corporate Strategy', Ansoff's books have been milestones in the development of strategic management.  These have consisted of:  'Business Strategy' (1969), 'From Strategic Planning to Strategic Management' (1976), 'Strategic Management' (1979) and 'Implanting Strategic Management' (1984,1990).  The last two, representing a shift from a focus on strategy to the 'bottom line' success of strategic behaviour, have shown the contribution Ansoff has made to corporate thinking.

Although 'Corporate Strategy' received worldwide acceptance, the prescription for strategic planning contained in the book had mixed results in practice.  In some organisations it produced significant improvement in performance and became a way of life, but in many others, strategic planning became a phenomenon which Ansoff called "paralysis by analysis".

Ansoff searched for an explanation of this anomaly and this led to 20 years of theoretical and empirical research on successful strategic behaviours.  An early activity involved a four-year research study of success and failure of mergers and acquisitions strategies.  The result of this was 'Acquisition Behaviour of US Manufacturing Firms 1946-1965', published in 1971.  In the next year Ansoff published an article, 'The Concept of Strategic Management', which argued that explanation of the planning failure must be sought by studying the orgnisation's overall process of strategic management and not just the planning component.  Ansoff organised the first international conference on strategic management, sponsored by IBM and General Electric, at Vanderbilt in 1973.  An outcome of this conference was 'From Strategic Planning to Strategic Management', published the following year.

Ansoff spent the next six years at the Brussels-based European Institute of Advanced Studies in Management, where he led a number of pan-European projects on strategic management and societal strategy.  He continued his research on strategic management and focused on the kinds of strategic behaviour that lead to success in organizations in turbulent environments.  This research produced 'Strategic Management' in 1979.  His time in Brussels was described by him as "the most important phase of my intellectual development ... I begged, borrowed and stole concepts and theoretical insights from psychology, sociology and political science. And I attempted to integrate them into a holistic explanation of strategic behaviour". 

After this spell in Europe, Ansoff returned to the US in 1983 to become Distinguished Professor of Strategic Management at US International University, where he created masters' and doctoral level programmes in strategic management.  He also formed his own consultancy in San Diego, California.

Ansoff wrote on the preface to 'Corporate Strategy' that is seeks "to develop a practically useful series of concepts and procedures which managers can use to manage ... a practical method for strategic decision-making within a business firm".  The book achieves this aim with a set of processes and checklists so detailed and complete that the former ICI chairman, Sir John Harvey-Jones, said of it that "superficially at least, the corporate strategy could be drawn up by an unintelligent computer".  Harvey-Jones ranked the book as "one of the best business books of all time".

'Corporate Strategy' commences by analysing the three main types of decision-making; strategic, administrative and operating, and how they interact.  Ansoff explains the specific questions addressed in the strategic category:

  • What are the firm's objectives and goals?
  • Should the firm seek to diversify, in what areas and how vigorously?
  • How should the firm develop and exploit its present product-market position?

Ansoff explained that most strategic decisions have to be made within the practical framework of a limited total resource.  This involves a choice of competing resources.  For this reason, emphasis on current business activity will preclude diversification while over-emphasis on diversification will lead to neglect of present products.  "The object is to produce a resource-allocation pattern which will offer the best potential for meeting the firm's objectives".

Ansoff investigated how those objectives, both economic and social, can be defined by individual firms according to their own circumstances.  He devised a practical method for setting objectives within different time horizons that incorporated sufficient flexibility to deal with unforeseen events.

Ansoff said that "Objectives are a management tool with many potential uses.  In the operating problem they can be used for establishing performance standards and objectives for all organisational levels, for appraisal of performance, and for control decisions.  In the administrative problem they can be used to diagnose deficiencies in the organisational structure. In our main area of interest, the strategic problem, objectives are used as yardsticks for decisions on changes, deletions and additions to the firm's product-market posture".

Ansoff next formulated a 'concept of strategy' from which a firm can:

  • identify the business it should be in,
  • use specific guidelines to search for strategic opportunities and
  • be given decision rules to narrow that selection process down to the most attractive options.

Ansoff anticipated Harvard's Michael Porter by nearly two decades in identifying competitive advantage as a key element in strategic planning.  He noted that the identification of competitive advantage requires "uncommon skills in anticipating trends" to ensure really successful results, and that, because of the need for knowledge of the industry in which the organisation operates, the concentric form of diversification (linked related products and markets) is likely to be more successful than conglomerate diversification.
'Corporate Strategy' ends by analysing the pros and cons of the 'make or buy' new product and markets. 
Professor Taylor says Ansoff s work has "educated and enthused a whole generation of practitioners, consultants and academics in the USA and around the world".  He has "kept his contact with practice, working with top management teams in leading multinational companies - always bringing new and original ideas, expressed with energy and enthusiasm".

Further research

Ansoff, H I (1965) Corporate Strategy, New York: McGraw Hill; (1986) London
Ansoff, H I (1969) Business Strategy, London
Ansoff, H I (1971) Behavior of US Manufacturing Firms 1946-65 (with R J Brandenburg, F E Portner, H R Radosevich), Nashville
Ansoff, H I (1976) From Strategic Planning to Strategic Management (with R Hays, R Declerck), New York and London
Ansoff, H I (1979) Strategic Management, London
Ansoff, H I (1984, 1990) Implanting Strategic Management, New Jersey